ADM serves Car Dealers, Automotive Marketing Pros and Internet Sales Managers
News travels fast and you may have heard that Toyota Motor Corporation Australia Limited (Toyota) yesterday gave a court enforceable undertaking to the ACCC in relation to allegations that it misled consumers as to the composition of its "leather" upholstery.
Between 2005 to 2009 Toyota made representations that the interior upholstery of certain models were made from "leather" or "all leather", when the upholstery components were only partially leather. From 2009, Toyota changed its advertising approach to claim the upholstery was "leather accented" or had "leather accents", but again they were only partially made from leather and some individual dealerships had continued to represent to consumers that the upholstery components were entirely made from leather.
The ACCC considered that by stating the upholstery was "leather", consumers would interpret this to mean that the upholstery was entirely made of leather, and this was not the case. Accordingly, the ACCC was concerned that consumers were being misled and paying a premium for quality leather finishes that they were not getting.
Toyota undertaking to ACCC
Toyota have undertaken to the ACCC that it will not do the following in its advertising and promotional materials:
1) use the description "leather" (without the word "accents" or "accented") unless it can demonstrate that the component is entirely upholstered in leather and has no synthetic upholstery content; and
2) use the description "leather accents" or "leather accented" unless details of the leather, partial leather, and non-leather interior components of the vehicle has been provided on a website dedicated to providing consumers with detail on the meaning of the phrases "leather accents" and "leather accented".
In providing the undertaking, Toyota has admitted that it may have engaged in misleading conduct in breach of Schedule 2 of the Competition and Consumer Act.
Toyota has also undertaken to provide corrective advertising notices in print media, on its website and in store in addition to implementing a supplementary compliance program designed to ensure Toyota dealerships and consumers understand the meaning of the terms "leather accents" and "leather accented" and to minimise any risk of misunderstanding by consumers, or misstatements by dealerships.
What this means for advertisers
The position of the ACCC is in line with our lawyer’s position as communicated over many years. Anismoff Legal advises advertisers to continue exercising caution in relation to claims you might make in relation to leather. It seems the ACCC have taken the approach that it will be necessary to be very clear about the composition of products claimed to be made from leather. If they are not entirely leather, than a broad and general claim that they are "leather" should not be made and is likely to be misleading. Further, if you are qualifying a leather claim by saying "leather accents", "leather-like", "leatherette" (for example) it may be necessary to make it clear to consumers what this means and what it applies to.
Anismoff Legal also recommends that you continue to seek specific advice if you are making leather claims and especially where you may be concerned about the implications of Toyota's ACCC undertaking.
The Australian Competition & Consumer Commission (ACCC) promotes competition and fair trade in the market place to benefit consumers, businesses and the community. It also regulates national infrastructure services. Its primary responsibility is to ensure that individuals and businesses comply with the Commonwealth competition, fair trading and consumer protection laws.