Marketing Law
University marketing and the Trade Practices Act
Universities spend considerable sums advertising their courses and themselves in order to attract international and domestic students. In some cases these advertisements seek to provide information about such matters as the courses on offer, the existence of scholarships and the conditions of entry. In other cases, they make laudatory claims about the institution, the course, or other matters that (presumably) are calculated to attract students.
Placing the advertisement is likely to be characterised as occurring in trade or commerce, at least when directed at fee-paying students. A similar assumption should also be made in relation to course advice to such students. This is especially the case where the advice has direct financial consequences for the university (for example, advice about advanced standing on the basis of previous study which affects course completion) and so can itself be regarded as commercial in nature. As a result if the advertisement or advice is misleading or deceptive or if it contains false representations it will be a breach of the Trade Practice Act.
Section 52 of the Trade Practices Act
Section 52 of the Trade Practices Act is very broad. It is not restricted to statements that are actually false in the sense of containing factual error, or to those that actually mislead the persons to whom they are directed. Rather, it extends to all forms of conduct that leads a person into error, whether literally false or not, or that has the potential to do so. Further, an action for contravention can be brought by any person, regardless of whether they themselves were misled. The reach of the section 52 is shown by the following examples.
Section 52 of the Trade Practices Act is very broad. It is not restricted to statements that are actually false in the sense of containing factual error, or to those that actually mislead the persons to whom they are directed. Rather, it extends to all forms of conduct that leads a person into error, whether literally false or not, or that has the potential to do so. Further, an action for contravention can be brought by any person, regardless of whether they themselves were misled. The reach of the section 52 is shown by the following examples.
Factual error
The clearest cases of contravention will occur when advertisements, or advice, contain factual errors. For example, statements, that a course was accredited by a government agency, when it is not.
The clearest cases of contravention will occur when advertisements, or advice, contain factual errors. For example, statements, that a course was accredited by a government agency, when it is not.
Literal but misleading truth
Statements that are literally true will, nevertheless, contravene section 52 of the Trade Practices Act if they would mislead a reasonable member of the audience they address. For example, it could be misleading for a university to announce the appointment of a new staff member who shared the same name as a Nobel laureate, without making clear that the appointee was not that person.
Statements that are literally true will, nevertheless, contravene section 52 of the Trade Practices Act if they would mislead a reasonable member of the audience they address. For example, it could be misleading for a university to announce the appointment of a new staff member who shared the same name as a Nobel laureate, without making clear that the appointee was not that person.
Ambiguous advertising
The Federal Court in Fennell v Australian National University dealt with an advertisement for an MBA program that read in part:
The Federal Court in Fennell v Australian National University dealt with an advertisement for an MBA program that read in part:
"This intensive, 11 month course provides comprehensive management training in the changing Asian business context. A further three months are spent in an overseas placement with a leading company honing management skills and building the international networks essential for doing business in the region."
ANU’s intention was that students would arrange their own work placements and this was made clear its Handbook. However, Mr Fennel, who enrolled in the course after reading the advertisement, argued that it amounted to a representation that ANU would arrange a work placement for him, which it had not done. Although dismissing the application on other grounds, the court found that this was a 'clearly plausible' interpretation of the advertisement.
Inaccurate predictions
Inaccurate predictions will be misleading unless it can be shown that when made, there were reasonable grounds for making them. This is dealt with in section 51A of the Trade Practices Act. Examples might include a statement that a course will be accredited by a professional body by the time it commences in circumstances in which no application for accreditation had been made, or a statement that resources would be available to students commencing a new course when no processes are place to secure those resources.
Inaccurate predictions will be misleading unless it can be shown that when made, there were reasonable grounds for making them. This is dealt with in section 51A of the Trade Practices Act. Examples might include a statement that a course will be accredited by a professional body by the time it commences in circumstances in which no application for accreditation had been made, or a statement that resources would be available to students commencing a new course when no processes are place to secure those resources.
Non-disclosure of important information
Failure to disclose important information may contravene section 53 of the Trade Practices Act where, combined with other conduct, it misleads a student or prospective student whom the respondent was dealing. For example, it may be misleading for a university whose LLB is not recognised for admission purposes in (say) Malaysia, to advertise the degree in that country without making clear that it was not recognised there. Similarly, it may be misleading not to disclose to current students that the course in which they were enrolled had lost its accreditation with a relevant professional body or governmental authority.
Failure to disclose important information may contravene section 53 of the Trade Practices Act where, combined with other conduct, it misleads a student or prospective student whom the respondent was dealing. For example, it may be misleading for a university whose LLB is not recognised for admission purposes in (say) Malaysia, to advertise the degree in that country without making clear that it was not recognised there. Similarly, it may be misleading not to disclose to current students that the course in which they were enrolled had lost its accreditation with a relevant professional body or governmental authority.
Groundless opinions
Expressing an opinion that is honestly held is not misleading conduct. However, if is expressed in circumstances that imply that, for example, there were reasonable grounds for holding the opinion, or that it was based upon considered research, or familiarity with relevant information, then it will be misleading if this was not the case. For example, a claim that staff or facilities are 'world class', even if regarded as an expression of opinion, may be taken to imply that it was based upon some form of rigorous comparison of institutions so that if this is not the case, liability could arise.
Expressing an opinion that is honestly held is not misleading conduct. However, if is expressed in circumstances that imply that, for example, there were reasonable grounds for holding the opinion, or that it was based upon considered research, or familiarity with relevant information, then it will be misleading if this was not the case. For example, a claim that staff or facilities are 'world class', even if regarded as an expression of opinion, may be taken to imply that it was based upon some form of rigorous comparison of institutions so that if this is not the case, liability could arise.
Trade practices law can be highly complex. This is a short background summary of the law in relation to University marketing and the Trade Practices Act but should not be relied upon as legal advice.
For legal advice in relation to marketing law and the Trade Practices Act please contact the UNSW Legal Office on Ph: 9385 2701 or Email: legaloffice@unsw.edu.au.
For legal advice in relation to marketing law and the Trade Practices Act please contact the UNSW Legal Office on Ph: 9385 2701 or Email: legaloffice@unsw.edu.au.