Victorian government legislation which will regulate e-cigarettes in the same way as tobacco products is expected to pass parliament by mid-August.
Health advocates have welcomed court action against two e-cigarette manufacturers, arguing it strengthens the case for proposed Victorian laws which would regulate electronic cigarettes in the same way as traditional tobacco products.
The consumer watchdog is taking two companies to the Federal Court after both claimed their e-cigarettes didn't contain cancer-causing chemicals when in fact they did.
"It beggars belief that you can have a rechargeable battery device heating up a liquid of unknown composition, which you use at your mouth for hours at end, with no safety standards at all," Quit Victoria director Dr Sarah White told AAP on Monday.
The ACCC has commenced proceedings against Social-Lites and Elusion for allegedly making false or misleading statements about their e-cigarettes.
Independent testing revealed they included carcinogens found in conventional cigarettes - such as formaldehyde, acetaldehyde and acrolein.
"It's terrific news the companies are being held to account," Dr White said.
"One of the big challenges is that there are absolutely no safety or manufacturing standards around e-cigarettes (in Australia)."
Legislation to be debated in Victoria's parliament on Tuesday would amend the Tobacco Act so relevant provisions apply to e-cigarettes too.
The change would prohibit the sale of e-cigarettes to anyone under 18, prohibit their use wherever smoking is banned, and restrict advertising.
Dr White said the Victorian legislation would ensure e-cigarettes couldn't become cool.
"The ACCC action shows we don't know what's in them," she said.
"(The Tobacco Amendment Bill) is a great first step. It will make sure we don't have kids getting their hands on the products."
In the UK some health groups promote e-cigarettes as being less harmful than regular ones.
But that's only because in Britain there's much stricter regulation regarding what goes into them, Dr White said.
The Tobacco Amendment Bill is due to be debated in parliament on Tuesday.
The government expects the legislation will pass the lower house later this week and the upper house in mid-August.
E-cigarettes are predominantly used in Australia by men in their 20s, research suggests.