AI video ads and the Australian Consumer Law: what small businesses need to know

Published 15 October 2026

Plain English guide to using AI video ads in Australia without misleading customers, based on ACCC guidance.

AI makes it cheap to produce a video of a smiling person holding your product. That is useful, but it also makes it easy to slip into misleading advertising. Here is what the regulator actually says.

The law applies to social media ads like any other ad

The ACCC says Australian Consumer Law obligations apply to advertising on social media, and that businesses must make sure statements are true, accurate and can be proven. It also says the ACCC can require businesses to back up claims they make on social media (ACCC, social media promotions).

Fake testimonials are the big trap

The ACCC states that it is against the law for a business to create fake or misleading reviews or to arrange for others to do so (ACCC, online reviews). Its guide for business says you should not write reviews when you have not experienced the product, and that reviews which do not reflect a genuinely held opinion are misleading (ACCC guide for business and review platforms).

An AI generated person saying "I have used this for six weeks and my skin has never been better" is, in our view, exactly that kind of fake testimonial, because no person had that experience. Get legal advice if you are unsure about a specific ad.

A safe way to use AI people

  • Use AI presenters to demonstrate or explain, not to give personal reviews.
  • Keep claims to things you can prove, and keep the proof on file.
  • Use real customer quotes only with permission, word for word.
  • Label AI content where the platform asks for it.

The enforcement is real

In the ACCC's own example, removalist Citymove paid a $6,600 penalty after publishing testimonials copied from an unrelated site and presented as genuine (ACCC). A 2023 ACCC sweep found 37 per cent of 137 businesses reviewed had engaged in concerning conduct around reviews (ACCC media release).

This article is general information, not legal advice.

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