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Imagine if consumer law governed election propaganda

  • September 23rd, 2014

The Commerce Commission recently applauded a Court of Appeal decision on bold headline claims undermined by the fine print.

The case was brought by a carpet manufacturer against a competitor. The Commission joined in to help ensure that “businesses and consumers  have a clear sense of what the ground rules are“.

As you look at the principles set out by the Court, consider how political pitches for your vote would fare if politicians held themselves to the same standards they sanctimoniously impose on business. The penalties for breach can be very severe, and personal.  Competitors can ‘prosecute’ so that honesty in commerce is enforced whether or not the regulatory establishment favours the wrongdoers.

Contrast that with the situation under electoral law, where the Police have simply declined to enforce the law on many occasions of clear breach, but there is no effective right to the people to step in.

As summarised by the Commission’s lawyer, Mary Ann Borrowdale, the Court of Appeal held that:
“All consumers are entitled to the protection of the Fair Trading Act, not just the knowledgeable, well-off or sophisticated.
Claims are made to all members of the target audience, except for outliers which includes those who are ill-equipped or whose reactions are extreme or fanciful.
When assessing whether a claim breaches the Fair Trading Act, it is the dominant message of the headline that is important.
Where there is a glaring disparity between the dominant message of the headline and the information qualifying it, the maker of the statement must draw the disparity to the consumer’a attention in the clearest possible way.
The Fair Trading Act will be breached where a claim has lured a consumer intothe marketing web by misleading means. It does not matter that the consumer may come to appreciate the true position before the transaction is completed.

I do not think that our electoral speech should be inhibited by such liabilities. But there could be more consequences for casual or calculated lying – for example on the costs of promises, and the realism of income expectations from law changes.


  • ben
  • September 26th, 2014
  • 4:46 pm

Such inconsistency is galling, but competition is intense at election time and a good, and in my view vastly superior, alternative to regulation of speech to drive honesty.

  • John Dickson
  • October 2nd, 2014
  • 6:58 am

the other interesting counter factual would be if the insider trading laws applied to the disclosure of information by Ministers and Minister Office staffers, in particular not giving one player an information advantage over another?

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