Earlier this year, the Australian Competition and Consumer Commission (ACCC) commenced proceedings in the Federal Court of Australia against Reckitt Benckiser, the maker of Nurofen pain relief products. The proceedings were based on the ACCC’s concerns that Nurofen’s line of “Specific Pain” products were misleading for consumers. This month, the Federal Court handed down its decision.
What Was the Problem?
Reckitt Benckiser made four Nurofen Specific Pain products – one for each of back pain, period pain, migraine and tension headache. Each of these products was packaged and promoted to suggest that it was formulated to target the relevant pain type. In reality, the four products had the same formula and active ingredient. None of the products were any more or less effective in treating a specific type of pain.
The ACCC conducted price sampling before instituting proceedings against Reckitt Benckiser, and found that the Specific Pain products were almost twice as expensive as Nurofen’s general pain products and comparable products of competitors.
The ACCC alleged that the Specific Pain products contravened sections 18 and 33 of the Australian Consumer Law (ACL). Section 18 prohibits businesses from engaging in misleading or deceptive conduct. For more details, see our other article explaining what you need to know about misleading conduct. Section 33 of the ACL prohibits a business from engaging in conduct that might mislead the public about the nature, characteristics or suitability for purpose of goods.
What Was the Outcome?
At trial, Reckitt Benckiser admitted some contraventions of sections 18 and 33. The ACCC did not press other contraventions that it initially alleged against Reckitt Benckiser. The parties agreed to resolve the matter through proposed orders. The Federal Court made orders broadly in the terms proposed by the parties.
What Were the Court’s Orders?
The orders made by the Federal Court included the following elements:
- A declaration that Reckitt Benckiser had breached the Australian Consumer Law;
- An injunction restraining Reckitt Benckiser from further breaches for a period of three years;
- Corrective notice and corrective advertising in a national newspaper alerting consumers about Reckitt Benckiser’s breach. The Federal Court noted that these measures had a protective purpose as well as an educative effect; and
- Amendments to Reckitt Benckiser’s existing compliance program including:
- Appointing a compliance officer,
- Establishing a complaints handling system,
- Training staff,
- Providing compliance documents to the ACCC, and
- Implementing ACCC recommendations.
Although Reckitt Benckiser did not have a bad compliance record and had admitted its contraventions, the Federal Court still considered that the orders relating to the compliance program were necessary.
The Federal Court also ordered Reckitt Benckiser to cease further distribution of the Specific Pain products within four weeks and to remove the products from all retail outlets within three months.
The Federal Court’s orders did not cover the amount of pecuniary penalties that would apply to the contraventions. There will be a further hearing on penalties at a later time.
In a press release from the ACCC, chairman Rod Sims emphasised that the ACCC would closely scrutinise any representations that are difficult for consumers to test.
Questions? Get in touch with LegalVision’s consumer lawyers on 1300 544 755.