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A business began an advertising campaign saying that its products have certain qualities that they actually do not possess. Can a rival business take action under the ACL s 18(1) to stop this advertising? Select one: a. No, because the rival business has not been misled as it has known the truth about the products all along. b. No, this is a job for the ACCC, and private interests should not interfere for their own commercial gain. c. Yes it can, even if it is motivated only out of concern to protect its competitive position. d. No, because the rival business is not a consumer.

Question

A business began an advertising campaign saying that its products have certain qualities that they actually do not possess. Can a rival business take action under the ACL s 18(1) to stop this advertising?

Select one:

a. No, because the rival business has not been misled as it has known the truth about the products all along.

b. No, this is a job for the ACCC, and private interests should not interfere for their own commercial gain.

c. Yes it can, even if it is motivated only out of concern to protect its competitive position.

d. No, because the rival business is not a consumer.

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Solution

The correct answer is:

c. Yes it can, even if it is motivated only out of concern to protect its competitive position.

Here's why:

Under the Australian Consumer Law (ACL), businesses are prohibited from engaging in conduct that is misleading or deceptive, or is likely to mislead or deceive (s 18(1)). This provision is not limited to protecting consumers; it also applies to conduct that affects other businesses.

In this case, the rival business could potentially take action under the ACL to stop the misleading advertising, even if its primary motivation is to protect its competitive position. The misleading advertising could distort the market and give the business making the false claims an unfair advantage, which could harm the rival business.

The other options are incorrect. The fact that the rival business has not been misled because it knows the truth about the products is irrelevant (option a). While the Australian Competition and Consumer Commission (ACCC) can take action to enforce the ACL, this does not preclude private parties from also taking action (option b). And as mentioned above, the ACL's prohibition on misleading or deceptive conduct is not limited to protecting consumers (option d).

This problem has been solved

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Competitor audience & Product & services

Question 2Imagine that a company invests in its marketing strategy but does not have a strong brand identity. What is the likely result?1 pointCustomers will prefer the company to its competitors.Customers will remain loyal to the company.Customers will not remember who the company is.Customers will not seek out a company’s competitors.

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