Australian Consumer Law (misleading conduct via AI output)
The prohibition on misleading or deceptive conduct applies to what your business publishes or tells customers, whether a person or an AI system produced it. Every business, every size, no AI carve-out.
- Status
- In force · Australia (Commonwealth) · ACCC
- Applies to
- Every business in trade or commerce in Australia, regardless of size or turnover
- Primary source
- Official document →
- Last reviewed
- 28 September 2026
What it is
The Australian Consumer Law is Schedule 2 of the Competition and Consumer Act 2010. Section 18 prohibits conduct in trade or commerce that is misleading or deceptive or likely to mislead or deceive. Section 29 prohibits false or misleading representations about goods and services: their standard, price, benefits, guarantees, testimonials and more. Neither section mentions AI and neither needs to. The law attaches to the conduct and the representation, not to who or what produced them, so a chatbot’s answer, an AI-drafted product description or an AI-generated testimonial is your representation the moment it reaches a customer. Since 28 March 2026 the maximum penalty for a body corporate under the penalty provisions is the greatest of $100 million, three times the benefit obtained, or 30 per cent of adjusted turnover.
What it requires
Two things, and intent is irrelevant to both. The overall impression a customer takes from what you say must not be misleading, including by what is left out, and any claim you make you must be able to substantiate, including claims about the future, which need reasonable grounds. Section 18 carries no pecuniary penalty of its own; its consequences are injunctions, damages, corrective advertising and the loss of the sale. Section 29 does carry the penalties above, and it is the section a wrong AI answer about price, features, availability, refunds or “our AI is certified” will usually engage. Silence counts: a chatbot that fails to mention a material condition can mislead as surely as one that states a falsehood.
Does this reach your business?
Yes, whoever you are, and this is the instrument on the Map with the widest reach. The common ways AI engages it: a customer-facing chatbot that answers questions about your products, terms or prices; AI-drafted marketing copy that overstates a benefit; AI-generated reviews or testimonials; a comparison or recommendation feature; and any claim about your own AI (“accurate”, “unbiased”, “secure”) that you cannot prove. The vendor’s model being wrong is no defence. It was your conduct.
What we recommend
Our advice is to treat every customer-facing AI output as a published statement and govern it like one. Decide which topics the AI may answer and which it must hand to a person (price, eligibility, refunds, anything contractual). Have a person review AI-drafted marketing before it goes out, with the same substantiation file you would keep for a human copywriter. Sample your chatbot’s conversations on a rhythm and look specifically for wrong, overstated or incomplete answers. Do not let AI write reviews or testimonials. And keep a record of what the system was allowed to say and when you checked it, because “we took reasonable steps” is only an argument if you can show them.
Questions people ask
Yes. A chatbot's answer is your business's representation to the customer. If it misleads, you have engaged in misleading conduct, whatever the vendor's model did.
No. Sections 18 and 29 attach to the conduct, and intention is irrelevant. The vendor's error is your representation.
For breaches of the penalty provisions such as section 29, since 28 March 2026, up to the greatest of $100 million, three times the benefit, or 30 per cent of adjusted turnover for a body corporate, and $2.5 million for an individual. Section 18 itself leads to injunctions, damages and corrective orders rather than fines.
Yes. The Consumer Law has no turnover threshold; it applies to any business in trade or commerce.