Focus: ACCC investigation into alleged false and misleading representations
Services: Intellectual Property & Technology, Commercial
Industry Focus: Energy, Resources & Infrastructure

Two suppliers of solar panels in Australia are the latest to feel the wrath of the Australian Competition and Consumer Commission (ACCC) for alleged misrepresentations made whilst promoting their products.

The ACCC has commenced proceedings against the operators of Euro Solar and Australian Solar Panel, alleging that that they have made false or misleading representations about the country of origin of the solar panels they supply, as well as the use of false testimonials on their websites.

It is alleged that these businesses represented that the solar panels they supplied were made in Australia when, in fact, they were actually manufactured in China. In addition, it is alleged that testimonials used by these businesses to promote the quality of their solar panel products were not made by genuine customers.

Under the Australian Consumer Law (ACL), it is an offence to make a false or misleading representation concerning:

  • the place of origin of goods or
  • a testimonial by any person relating to goods.

The ACCC has also commenced proceedings against one of the directors for being knowingly concerned in, or a party to, the alleged conduct.

The maximum penalties for a breach of these provisions of the ACL are $1.1 million per offence for a body corporate and $220,000 per offence for an individual.

Highlighting the attention that the ACCC is giving to these types of offences, the Chairman of the ACCC, Rod Sims, said:1

The ACCC is currently prioritising work in the areas of credence claims and fake testimonials ...

Consumers should be able to rely on the accuracy of labels, especially when they are prepared to pay a premium for products made in Australia ...

... Fake testimonials can mislead consumers as a great deal of trust is often placed on these reviews. They also harm competitors who do the right thing.

Takeaway

These proceedings serve as a reminder to business owners not to advertise goods or services in a manner that may be false or misleading.

Business owners should regularly check the representations they make about their goods or services. Some representations that may not be false or misleading when first made have the potential to become false or misleading over time.

Where a business chooses to use reviews and testimonials as a method of promoting its goods or services, those testimonials must be genuine, correct and able to be evidenced if later challenged.

The penalties for false and misleading representations can be high, so it is important for all businesses, not just solar panel suppliers, to give these types of issues due attention.

Footnotes

1ACCC media release dated 8 May 2013, 'ACCC takes action against Euro Solar and Australian Solar Panel for misleading claims' < http://www.accc.gov.au/media-release/accc-takes-action-against-euro-solar-and-australian-solar-panel-for-misleading-claims >.

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