In December 2016, the Federal Court fined the manufacturers of Nurofen, Reckitt Benckiser (Australia) Pty Ltd (Reckitt Benckiser), $6 million for misleading their customers about their painkiller range after the ACCC appealed the Court’s original $1.7 million penalty. Below, we explain the decision as well as provide some practical guidance for businesses about complying with the Australian Consumer Law (ACL).

Facts of the Case

The ACCC successfully brought an action against Reckitt Benckiser in 2015 for engaging in misleading conduct and contravening the ACL. Reckitt Benckiser advertised their painkiller range as formulated to treat specific pain (i.e. back pain, period pain, tension headaches and migraines). But in reality, they were identical and contained the same active ingredient.

The Federal Court fined the pharmaceutical giant $1.7 million. However, the ACCC filed a notice of appeal stating that the penalty was manifestly inadequate and emphasised the need to deter other companies. Relevantly, Nurofen had made substantial profits from selling the products through misleading advertising ($45 million). The Full Federal Court upheld the appeal and ordered Reckitt Benckiser pay a revised penalty.

What is Misleading Conduct?

The ACCC was concerned with Reckitt Benckiser’s misleading advertising practices. A business can engage in misleading advertising when they make statements that are incorrect or likely to create a false impression. In this case, Reckitt Benckiser stated that their product was capable of targeting and alleviating specific types of pain (which it could not do).

Importantly, a business does need to intend to mislead a customer. Rather, it is the overall impression the conduct leaves on a consumer’s mind. Misleading claims can apply to the following:

  • quality of a product;
  • history of a product;
  • whether the product is new;
  • consumer’s need for a product or service;
  • availability of a service;
  • exclusions on goods and services;
  • performance characteristics of a product; and
  • benefits of using a product or service.

What Can I Do If a Business Has Misled Me?

If a business has engaged in misleading conduct, you can lodge a complaint with the ACCC. The regulator has a wide variety of powers which it can enforce against a business including fines, injunctions and enforceable undertakings. The process for submitting a complaint typically follows these three steps:

  1. contact the business to explain the problem and the outcome that you want to try and achieve;
  2. contact the ACCC and make a complaint; and
  3. take legal action independently to small claims court or tribunal.

How Can Your Business Comply With the Consumer Law?

It’s important to remember that the prohibition against misleading and deceptive conduct extends beyond advertising, and applies to:

  • product packaging;
  • testimonials on your social media pages;
  • representations on your website;
  • online shopping services; and
  • information provided by your staff.

This means that you need to keep consumer law front of mind when advertising and marketing your product as well as designing your product packaging. It’s also prudent to include warranties and limitations of liability in your business terms and conditions when selling goods and services.

Key Takeaways

The ACCC does not take kindly to brand’s who engage in misleading advertising, as illustrated by the Court’s recent decision to order a revised penalty against Reckitt Benckiser. If you have any questions about your advertisements or need assistance reviewing your ads to ensure they comply with the ACL, get in touch with our consumer lawyers on 1300 544 755.

COVID-19 Business Survey
LegalVision is conducting a survey on the impact of COVID-19 for businesses across Australia. The survey takes 2 minutes to complete and all responses are anonymous. We would appreciate your input. Take the survey now.

About LegalVision: LegalVision is a tech-driven, full-service commercial law firm that uses technology to deliver a faster, better quality and more cost-effective client experience.

The majority of our clients are LVConnect members. By becoming a member, you can stay ahead of legal issues while staying on top of costs. For just $199 per month, membership unlocks unlimited lawyer consultations, faster turnaround times, free legal templates and members-only discounts.

Learn more about LVConnect

Sam Auty
Need Legal Help? Get a Free Fixed-Fee Quote

If you would like to receive a free fixed-fee quote or get in touch with our team, fill out the form below.

  • By submitting this form, you agree to receive emails from LegalVision and can unsubscribe at any time. See our full Privacy Policy.
  • This field is for validation purposes and should be left unchanged.
Our Awards
  • 2019 Top 25 Startups - LinkedIn 2019 Top 25 Startups - LinkedIn
  • 2019 NewLaw Firm of the Year - Australian Law Awards 2019 NewLaw Firm of the Year - Australian Law Awards
  • 2020 Fastest Growing Law Firm - Financial Times APAC 500 2020 Fastest Growing Law Firm - Financial Times APAC 500
  • 2020 AFR Fast 100 List - Australian Financial Review 2020 AFR Fast 100 List - Australian Financial Review
  • 2020 Law Firm of the Year Finalist - Australasian Law Awards 2020 Law Firm of the Year Finalist - Australasian Law Awards
  • Most Innovative Law Firm - 2019 Australasian Lawyer 2019 Most Innovative Firm - Australasian Lawyer
Privacy Policy Snapshot

We collect and store information about you. Let us explain why we do this.

What information do you collect?

We collect a range of data about you, including your contact details, legal issues and data on how you use our website.

How do you collect information?

We collect information over the phone, by email and through our website.

What do you do with this information?

We store and use your information to deliver you better legal services. This mostly involves communicating with you, marketing to you and occasionally sharing your information with our partners.

How do I contact you?

You can always see what data you’ve stored with us.

Questions, comments or complaints? Reach out on 1300 544 755 or email us at info@legalvision.com.au

View Privacy Policy