Legal warning to small businesses after spate of AI Anthony Albanese memes

Businesses that have used AI-generated images of Prime Minister Anthony Albanese to slam changes to capital gains tax (CGT) have been warned they could face legal action.

The government announced sweeping reforms in the budget that removed a discount on the CGT, meaning those running small businesses could pay up to 47 per cent in taxes to the government if they sell their business.

It has been met with condemnation, with owners around the country criticising the changes, jokingly calling the prime minister a 'shareholder' of the business and using AI images of him "working" for the company.

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While the stunt went viral on social media, legal experts warn that business owners could risk legal action.

"Using an AI-generated image of a politician or celebrity is not automatically illegal in Australia, because there is no broad standalone 'image right' that gives a person complete control over every commercial use of their likeness," lawyer Charlotte Hale from LegalVision said.

"The legal risk starts when a post creates the impression that the person endorsed, approved, sponsored or attended the business."

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Hale warns businesses could still be at risk, even if their intent wasn't to mislead customers.

"Images, social media posts and testimonials can all be misleading if they create a false overall impression, regardless of whether the business intended to mislead," Hale said.

"The safer side is obvious parody, political commentary or clearly labelled AI-generated content that does not imply endorsement or promote a commercial product."

She said businesses can distance themselves from legal problems if they leave a clear disclaimer that the post is parody or that the images of Albanese have been generated by AI.

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However, it may not be enough, referencing how some small businesses may have breached Australian consumer law by creating fake images of Prince Harry and Meghan Markle 'visiting' their stores during their visit to Australia last month.

"A disclaimer helps, but it is not a cure if the overall impression is still misleading," she said.

"Even if intended as a joke, some viewers may believe the visit happened."

"The line is crossed more quickly when the image is commercial, realistic, undisclosed, or tied to a false claim."