Does Red Bull Really Give You Wings?
Thursday 9 October 2014 @ 9.04 a.m. | Trade & Commerce
Energy drink company Red Bull has reached an expensive settlement in the United States after it was sued for false advertising.
Facts
The plaintiffs in the class action claimed Red Bull’s famous slogan “Red Bull gives you wings” was misleading. Their gripe was not the failure to sprout wings but rather the plaintiffs claimed that the drink did not improve performance as promised.
The plaintiff representing the class, Benjamin Careathers, said he had been drinking Red Bull since 2002 as part of the lawsuit he filed on 16 January 2013, in U.S. District Court of the Southern District of New York.
The U.S. Class Action
The class action claims Red Bull’s marketing and labelling misrepresent both the functionality and safety of Red Bull beverages.
The suit argues Red Bull misleads consumers about the superiority of its products with its slogan “Red Bull gives you wings” and its claims of increased performance, concentration and reaction speed, to name a few.
The class action claims Red Bull’s deception is proliferated through its advertising on television, the internet, social media and events, athlete endorsers, glossy print brochures, marketing campaigns and its slogan-promoting Red Bull Flugtag event series.
Plaintiffs made claims against Red Bull for breach of express warranty, unjust enrichment, and violations of various states’ consumer protection statutes.
The Proposed Settlement
Red Bull has agreed to pay US$13 million ($14.8 million) to settle the proposed class action lawsuit. The settlement could include millions of individuals who purchased at least one Red Bull can over the past 10 years, offering class members the option of a US$10 cash reimbursement or two free Red Bull products with an approximate retail value of US$15.
If the proposed settlement is passed by the court, Red Bull would be required to pay US$6.5 million into a settlement fund within seven days. Red Bull has issued the following statement:
“Red Bull denies any and all wrongdoing or liability and maintains that its marketing and labeling have always been entirely truthful and accurate.”
Protection Under Australian Law
Justine Munsie, partner at law firm Addisons, says in agreeing to settle for $14.8 million Red Bull has paid the price of confidentiality and clearly regards the class action as “something more than a mere try-on”:
“In Australia I would like to think in our body of law something is not misleading and deceptive if one person draws from it a strange meaning … The law is clear that very foolish people are not the people protected by our legislation. It has to be the average person.”
Schedule 2 s 18(1) of the Competition and Consumer Act 2010 (Cth) (the Act), states that:
“… A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.”
Section 4(2)(a) of the Act defines conduct as:
"... doing or refusing to do any act, including the making of, or the giving effect to a provision of, a contract or arrangement, the arriving at, or the giving effect to a provision of, and understanding or the requiring of the giving of, or the giving of, a covenant;"
The Australian Competition and Consumer Commission (ACCC) can seek penalties for beaches of the Australian Consumer Law.
Comment on the Class Action
Munsie also sayd that the class action is “more likely a case of ‘only in America’”. But she also says that the litigation does highlight how advertisers need to be careful about how seemingly amusing and very over the top unbelievable messages might be interpreted. She says a law firm in America managed to find enough plaintiffs in a class that were prepared to say:
“When I saw these ads saying Red Bull gives you wings, I drew from that and the surrounding circumstances not a claim that I was going to grow wings but I thought it was giving me some sort of increased performance and reaction speed”.
Munsie says the plaintiffs claim is based on their belief there was something in the drink doing something over and above the average energy drink. She also said:
“Red Bull agreed to settle not for an outrageous sum but for a significant sum of money, no doubt to avoid having their advertising and formula picked apart.”
TimeBase is an independent, privately owned Australian legal publisher specialising in the online delivery of accurate, comprehensive and innovative legislation research tools including LawOne and unique Point-in-Time Products.
Sources:
Red Bull to cough up $14.8 million over false super power claims – Article from smartcompany.com.au
Competition and Consumer Act 2010 (Cth) – Reproduced in TimeBase Point-in-Time Service
