The Ad Standards Industry Jury (Industry Jury) has determined its first case in relation to the promotion of a game of chance, finding the advertisements complained about were misleading and deceptive in breach of the Australian Consumer Law and the advertising industry’s self-regulatory code.
On 8 August 2022, the Industry Jury upheld a complaint filed with it by Kimberly-Clark Australia Pty Ltd against Unicharm Australasia Pty Ltd. It held that Unicharm had made a number of misleading or deceptive representations in its “BabyLove Chance to Win $1 Million Dollars” promotion (Promotion) in breach of the Australian Association of National Advertisers’ (AANA) Code of Ethics and the Australian Consumer Law.
This decision highlights that significant limitations to the “chance to win” mechanic in trade promotions must be clearly and prominently disclosed in all advertising for these promotions to avoid being misleading and deceptive.
AANA Code of Ethics and role of the Industry Jury
As mentioned in our previous paper ‘Brand owners and advertisers beware! New influencer marketing guidelines in the spotlight’, the Code of Ethics (Code) adopted by the AANA, the advertising industry’s self-regulatory body, provides a mechanism for competitor vs competitor complaints to be heard in relation to advertising and marketing which breaches laws, including the Australian Consumer Law.
The Industry Jury’s decision
On 19 April 2022, Kimberly-Clark lodged its complaint against Unicharm. The complaint centered around the headline claim (Representation):
“Buy BabyLove for your chance to Win $1 Million*
The Representation was made on Unicharm’s BabyLove Nappies’ website, in retail stores and on social media (Promotional Materials).
Towards the bottom, or at the bottom, of each item of Promotional Material there was a reference in smaller font as follows:
*Ts and Cs apply”
In all cases, the copy surrounding the headline claim provided a link to the full terms and conditions of the Promotion.
The complainant alleged Unicharm had made two representations in the Promotional Material which were misleading or deceptive:
- the “Eligibility Representation” which conveyed that all a prospective entrant was required to do was to register their purchase of an eligible BabyLove product and provide proof of purchase to be in with a “chance” of being selected from all the other eligible entrants to win the $1 million prize, when in fact once the entrant had been selected by chance from all other eligible entrants, they had to randomly select from 100 envelopes, the one envelope that contained the $1 million prize; and
- the “Prize Winning Representation” which created the impression that one of the eligible entrants who entered the draw would in fact win the $1 million prize, when in fact there was a 99% chance that no eligible entrant would win the $1 million prize.
The Industry Jury agreed with the complainant by determining that both the Eligibility Representation and Prize Winning Representation were misleading or deceptive, or likely to mislead or deceive, in breach of section 18 of the Australian Consumer Law and sections 1.1 and 1.2 of the Code.
Providing full T&Cs aren’t enough: the importance of prominent and clear qualifying statements
The Industry Jury rejected as an insufficient Unicharm’s submission that the full details of the entry instructions, prizes and the additional step of having to select the winning envelope out of a possible 100 envelopes were clearly set out in the full terms and conditions for the Promotion and that these full terms were referred to in the Promotional Material and readily available to entrants. The Industry Jury stated that the Promotional Materials did not, and should have, made clear that the chance to win the $1 million prize was effectively a chance to win a further chance to win the $1 million prize.
Unicharm submitted that the ordinary or reasonable prospective entrant would have read the full terms and conditions of the Promotion. The Industry Jury rejected this submission too as despite the requirement that the entrant check the “I agree to the Terms and Conditions” box on the entry form for the Promotion, the Industry Jury held that the “ordinary” prospective entrant would not necessarily be “savvy” to various promotional activities and the importance of reading the full terms and conditions of trade promotions. Although some members of the target audience would know the importance of reading the full terms and conditions, some would not.
Conduct of other competitors is not an excuse
Unicharm also attempted to justify that the Promotional Materials were not misleading on the basis that “a chance to win a million” promotion is a common type of promotion and provided examples of other similar promotions. The Industry Jury rejected this, noting that problematic claims run by other advertisers would not absolve the Promotional Materials from being misleading or deceiving.
The Industry Jury’s decision is a reminder to businesses and advertisers that, just because everyone is doing it, doesn’t mean it’s right.
Advertisers and businesses should keep the following in mind when putting together their next trade promotion that:
- When advertising a trade promotion, be clear and upfront about the rules of the promotion, including all entry requirements and how winners are selected.
- Don’t think you can rely on consumers to read the full terms and conditions.
- If there are any material qualifications to chances to win the promotion, call them out in all promotional materials.
- Don’t rely on what your competitors may be doing to guide how you run your marketing.
If you have questions relating to this decision and Consumer Law, please contact Addisons’ Competition, Consumer & Antitrust team.