These photos of Harry and Meghan could land Aussies in hot water

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Exclusive: Small businesses jumping on a seemingly harmless celebrity AI trend could land in hot water with the likes of Prince Harry and Meghan.

Dozens of Australian brands posted AI-generated images of the royals 'visiting' their stores or sampling their products as a bit of fun during their Australia tour last week.

But a consumer law expert said the posts could be in breach of the Australian Consumer Law.

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Luke, owner of Nina's Cucina in Melbourne, shared an AI image of the royals eating at the café as a joke after seeing other hospitality venues do it.

The Instagram post got more than 800,000 views.

Most people knew it was AI right away but a few were fooled, at least upon first glance.

"We had phone calls from Canada, from family over there, angry that we hadn't told them that the royals were visiting our shop," Luke told nine.com.au.

Have you got a story? Contact reporter Maddison Leach at mleach@nine.com.au

One angry commenter accused the business of trying to trick people.

Luke said that couldn't be further from the truth.

"We just wanted to bring some love and light to what is a very dark world at the moment," he explained.

"There's no malice or intent to have people actually believe that we had them here."

Luke said he never intended to mislead anyone with this AI photo, he's just trying to keep up in tough times.

The AI photo didn't translate to more sales for Nina's Cucina, though the business did gain about 100 Instagram followers after posting it.

Luke said the social media boost was a happy accident, not a planned outcome.

"It's bloody hard for small businesses at the moment, there are so many things that are setting us back – our costs are going up, and sales can be tough sometimes," he said.

"Having an avenue for small businesses to be able to get some exposure [like social media] is really important."

Husband and wife duo Steve and Emily also posted an AI photo of Harry and Meghan at their Beachside Bakehouse in San Remo, Victoria.

It was meant to be a laugh for the locals but got more than 350,000 views.

Most people knew the image was AI right away.

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Emily and Steve thought this AI photo of Harry and Meghan 'visiting' their café was all a bit of fun.

"People just scrolling past might think they're at the bakery," Emily told nine.com.au.

"But if people know where Phillip Island is and you knew Harry and Megan's schedule, you clearly knew that they weren't coming to Phillip Island.

"And given how high-profile Harry and Megan are, they clearly wouldn't just be sitting at a table with no one surrounding them."

The post didn't affect the bakery's sales and though it did receive some media attention, that was never the intended outcome.

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Most businesses hop on the celebrity AI trend as a bit of harmless fun but Jeannie Paterson, Professor of Law at The University of Melbourne and co-director at the Centre for AI and Digital Ethics, said it can spell trouble if done wrong.

Professor Jeannie Paterson is co-director at the Centre for AI and Digital Ethics.

Creating an AI image to depict something that didn't happen can be misleading and contrary to the Australian Consumer Law.

The image may amount to fake celebrity endorsements and the Australian Competition and Consumer Commission (ACCC) could prosecute for misleading conduct.

The exception is when the AI image is an obvious parody or is clearly marked as AI.

"Parody has to be clear, it has be something that nobody would glance at and be confused," Patterson told nine.com.au.

AI disclaimers also have to be obvious, not a small line hidden at the bottom of a photo or in the hashtags.

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Businesses could also land in hot water if the famous people who appear in their AI image decide to sue for misleading conduct.

"Celebrities may well litigate to protect their own reputations and their own brands," Paterson said.

She advises businesses to steer clear of the celebrity AI trend, just to be safe.

"Don't risk it."

Since speaking with nine.com.au, Luke has added a disclaimer to the Nina's Cucina post.

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