NZ Commerce Commission Fair Trading Compliance
The Commerce Commission enforces the Fair Trading Act against misleading marketing in New Zealand. Learn how to review content for compliance.
The Commerce Commission is New Zealand's competition and consumer protection regulator. Under the Fair Trading Act 1986 (FTA), the Commission enforces prohibitions against misleading and deceptive conduct, false representations, and unfair trading practices. The FTA applies to every business operating in New Zealand, regardless of size, industry, or whether the conduct occurs online or offline.
For marketing and content teams, the FTA is the primary consumer protection law governing what can and cannot be said in advertising, websites, social media, product descriptions, packaging, and any other commercial communication. The Commerce Commission actively monitors advertising across all channels and takes enforcement action against businesses that breach the Act.
Core Fair Trading Act Provisions
Section 9 -- Misleading and Deceptive Conduct
The broadest provision. No person shall, in trade, engage in conduct that is misleading or deceptive or is likely to mislead or deceive. Key principles:
- Assessed by the overall impression created on a reasonable consumer
- Applies to statements, omissions, images, and conduct
- Silence can be misleading if there is an obligation or expectation to disclose
- The intention to mislead is not required -- liability arises from the effect of the conduct
- Disclaimers do not cure a misleading headline or primary message
Section 10 -- Misleading Conduct in Relation to Goods
Specific prohibition against conduct in relation to goods that is liable to mislead the public regarding the nature, manufacturing process, characteristics, suitability for a purpose, or quantity of goods.
Section 13 -- False or Misleading Representations
Specific prohibitions against false representations about:
| Section 13 Provision | What It Covers |
|---|---|
| (a) | Quality, nature, or characteristics of goods or services |
| (b) | Standard, composition, or model of goods |
| (c) | Whether goods are new |
| (d) | Particular person has agreed to acquire goods or services |
| (e) | Testimonials or endorsements |
| (f) | Price of goods or services |
| (g) | Need for goods, services, repairs, or replacements |
| (h) | Place of origin of goods |
| (i) | Availability of facilities for repair or spare parts |
| (j) | Sponsorship, approval, or affiliation |
Section 14 -- False Representations and Other Misleading Conduct About Price
Specific prohibition against misleading representations about price, including false "was/now" pricing, drip pricing, and component pricing that understates the total cost.
Common Compliance Failures
Pricing Misrepresentation
The Commerce Commission has consistently targeted pricing practices as an enforcement priority. Common failures:
- Was/now pricing: Advertising a discount from a price at which the goods were never genuinely sold for a reasonable period
- Drip pricing: Displaying a low headline price and adding mandatory fees during the purchase process
- Comparison pricing: Comparing against inflated or artificial "recommended retail prices"
- Free offers: Advertising goods or services as "free" when there are conditions, costs, or obligations
- GST-exclusive pricing: In consumer-facing content, prices must include GST
Country of Origin Claims
Claims about where products are made, grown, or sourced are closely scrutinised:
- "Made in New Zealand" requires a substantial transformation to occur in New Zealand
- "Product of New Zealand" implies a higher degree of New Zealand origin than "Made in"
- Using New Zealand imagery (ferns, landscapes, flags) on imported products can be misleading
- Ingredient origin must be accurately represented
Environmental and Sustainability Claims
The Commerce Commission has signalled increased attention to greenwashing. Environmental claims must be:
- Specific and measurable, not vague ("eco-friendly" without explanation is risky)
- Substantiated by evidence
- Clear about what the claim applies to (the product, the packaging, the business)
- Current and verifiable
- Not creating a misleading impression about the overall environmental impact
Online and Social Media Advertising
The FTA applies to all advertising channels. The Commerce Commission has addressed:
- Influencer marketing where the commercial relationship is not disclosed
- Online reviews that are fabricated or selectively curated
- Social media advertising that makes claims without required context
- Website content that is outdated but still accessible to consumers
- Targeted advertising that exploits consumer data to make misleading offers
Endorsements and Testimonials
Under the FTA, businesses using endorsements and testimonials must ensure:
- The endorsement is genuine and from a real person
- The endorser has actually used the product or service
- The experience described is representative or disclosed as atypical
- Any material connection between the endorser and the business is disclosed (paid relationships, free products, affiliate links)
- The endorsement has not been altered to change its meaning
Building a Fair Trading Compliance Review Process
Content Review Checklist
Before publishing marketing content:
- All factual claims are accurate and substantiated
- Pricing is genuine and includes GST in consumer-facing content
- Discounts are calculated from genuine prior selling prices
- Origin claims are accurate and supported by evidence
- Environmental claims are specific, substantiated, and not misleading
- Testimonials are genuine, representative, and disclosures are included
- The overall impression of the content is not misleading
- Social media posts include necessary context and disclosures
- Terms and conditions do not contradict the main marketing message
- Comparative claims are fair, accurate, and based on verifiable data
Ongoing Monitoring
- Review existing website content quarterly for accuracy and currency
- Monitor social media accounts for non-compliant user-generated content
- Track Commerce Commission enforcement actions and guidance for relevant precedents
- Audit pricing practices against FTA requirements when promotional campaigns change
- Review influencer and affiliate content for compliance with endorsement requirements
Commerce Commission Enforcement Powers
| Action | Description |
|---|---|
| Warning | Formal warning letter drawing attention to compliance concerns |
| Compliance advice | Guidance on how to achieve compliance |
| Enforceable undertaking | Legally binding commitment to take specific remedial action |
| Court proceedings | Civil or criminal proceedings for FTA breaches |
| Civil pecuniary penalty | Up to $200,000 per contravention for individuals; up to $600,000 for body corporates |
| Criminal prosecution | For knowing or reckless FTA breaches, fines up to $200,000 (individuals) or $600,000 (body corporates) |
How Content Review Tools Support Fair Trading Compliance
Businesses produce marketing content across multiple channels at increasing volume. Each piece of content must comply with the Fair Trading Act, and the Commerce Commission monitors advertising actively. Manual legal review of every social media post, product description, and marketing email is not practical for most businesses.
Content review platforms provide systematic first-pass compliance checking. By configuring reviewers with FTA requirements and Commerce Commission guidance, teams can flag potentially misleading claims, check pricing representations, identify unsubstantiated environmental claims, and verify that endorsements include required disclosures. This catches common compliance issues before publication, reducing the risk of Commerce Commission action.
This supplements rather than replaces legal review. High-risk content such as comparative advertising, pricing promotions, and environmental claims should receive dedicated legal oversight. For the volume of routine marketing content, AI-assisted review provides a practical compliance baseline.
This article provides general information about Fair Trading Act compliance and is not legal advice. Always consult the Commerce Commission for current guidance and seek qualified legal advice for your specific situation.