Early last year, the ACCC took action against Reckitt Benckiser (Australia) Pty Ltd regarding the Nurofen ‘targeted pain’ range (click here to read our blog about it).
In December 2015, the Federal Court found that Reckitt Benckiser had indeed engaged in misleading representations in relation to this range of products. Specifically, the Court found that each of the ‘targeted pain’ ibuprofen products contained the exact same dosage of the exact same active ingredient, and that the ‘targeted pain’ range was no more or less effective at treating various forms of pain than the general Nurofen ibuprofen product.
The Court ordered Reckitt Benckiser to remove the Nurofen ‘targeted pain’ products from the shelves within 3 months, publish corrective notices on both its website and in national newspapers, implement a consumer protection compliance program and pay the ACCC’s costs.
Reckitt Benckiser accepted that it had engaged in misleading conduct and consented to the orders made by the Court.
The case is illustrative of the ACCC’s continued focus on truth in advertising. ACCC Chairman, Mr Rod Simms, said that ‘Truth in advertising and consumer issues in the health and medical sectors are priority areas for the ACCC, to ensure that consumers are given accurate information when making their purchasing decisions. Any representations which are difficult for a consumer to test will face greater scrutiny from the ACCC’.
Penalties will be decided at a hearing to be held at a later date.
THE ABSOLUTE LAST WORD ON THE MATTER! 04/04/17: Reckitt Benckiser appealed to the High Court, claiming that the fine was excessive having regard to the damage caused to consumers. The High Court rejected the appeal, and Reckitt Benckiser must now pay the $6m levied by the Full Federal Court.
FINAL UPDATE! 16/12/2016: The Full Federal Court increased the penalty to be paid by Reckitt Benckiser to $6m. The court found that the original penalty levied ($1.7m) was ‘manifestly inadequate’ given the substantial consumer loss suffered, and the need for deterrence. Justices Jagot, Yates and Bromwich said “The objective of any penalty in this case must be to ensure that Reckitt Benckiser and other ‘would-be wrongdoers’ think twice and decide not to act against the strong public interest”. Message received.
ANOTHER UPDATE! 23/5/2016: The ACCC has appealed the $1.7 million penalty handed down by the Federal Court, arguing that it’s ‘not an adequate deterrent’ and may be considered ‘a cost of doing business’ by a company the size of Reckitt Benckiser. We’ll keep you posted on developments.
UPDATE 29/4/2016: Reckitt Benckiser has been ordered by the Federal Court to pay $1.7 million in penalties for misleading conduct in relation to its targeted pain products. The ACCC sought penalties in the region of $6 million, however the Court took into consideration that although consumers likely suffered financial loss (due to targeted pain products being significantly more expensive than Nurofen’s standard ibuprofen products), the targeted pain products were effective in treating the pain referred to on the packet.