The maker of Nurofen has been fined $1.7 million for misleading conduct regarding its ‘Specific Pain Relief’ products. The range of Nurofen painkillers was marketed specifically as relief that addressed back pain, period pain, migraine pain or tension headaches.
The ACCC, Australia’s Consumer watchdog, took Nurofen maker Reckitt Benckiser to court claiming that the particular pain products gave consumers the impression that the relief targeted the specific symptom when in fact, there was no difference in the formula. Consumers were paying a higher price for a product that offered no additional benefit.
Justice James Edelman of the Federal Court stated that “none of the four products is any more or less effective than the others in treating any of the particular symptoms”. His Honour ordered Reckitt Benckiser to pay the penalty of $1.7 million for the misleading packaging and misleading representations on the Nurofen website.
Misleading Representations Under the Australian Consumer Law
Section 29 of the Australian Consumer Law (ACL) makes it unlawful for a business to make statements that create a false impression of the product. The ACL prohibits making misleading claims as to the product’s quality, composition or model.
This restriction applies to representations which are more than just ‘puffery’ which are typically exaggerated claims to promote products that the average person would not take seriously. Misleading statements that are unlawful under the ACL induce consumers into relying on this information to make their decision.
What Were the Misleading Representations?
The ACCC argued and the Federal Court found that Reckitt Benckiser has made two key misleading representations.
- The formula used in the specific pain products were for a particular type of pain; and
- The product treated that particular type of pain.
It was discovered that each of the specific pain products contained the same formula and its active ingredient ibuprofen lysine 342mg.
The ACCC proposed a penalty of $6 million for Reckitt Benckiser, but the Federal Court imposed $1.7 million. Some factors that led to Justice Edelman ordering the lesser penalty including the cooperative way that Reckitt Benckiser responded to the suit. The painkiller manufacturer admitted fault and accommodated the ACCC’s investigation which contributed to the court rescinding some other allegations.
The ACCC argued that Reckitt Benckiser was charging customers for the specific pain products almost double the price of their other painkiller products. Consequently, customers were choosing the specific pain products and paying the higher price because of the misrepresentations.
The Court considered whether Reckitt Benckiser did, in fact, benefit from advertising the products in such a way and whether they made a significant profit from the sales. Although it is difficult to calculate the effect on profit accurately, it is estimated that the specific pain range contributed to $45 million of the £8-10 billion global revenue in the past five years.
In determining the penalty amount, Justice Edelman also contemplated the fact that although the products didn’t specifically target the pain alone for which they were advertised, they were effective in treating the pain. The only harm borne by consumers and competitors was financial. If in fact, the specific pain range was not effective in treating the particular pain at all, then it wouldn’t be only the ‘specific’ label that was misleading and the penalty may have been greater.
In addition to the monetary penalty, Reckitt Benckiser was also ordered to take the specific pain range off the shelves within three months, to publish corrective notices and to implement a consumer protection compliance program. Reckitt Benckiser must disclose to their consumers that the specific pain products can treat other forms of pain as effectively as the one it is advertised to treat.
Chairman Rod Sims says they are considering whether to appeal the decision and to seek an increased penalty. Businesses should make sure that their advertising and marketing accurately reflects the nature and makeup of the goods or services. If consumers are going to rely on the information provided by the business, statements should not be misleading and inaccurate. The ACCC takes the Australian Consumer Law and their role as watchdog quite seriously and if you try misleading marketing to increase your sales, you will find the ACCC knocking at your door. Now that would be a pain.
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