ACCC v Reckitt Benckiser (Australia) Pty Ltd [2016] FCAFC 181: Nurofen Fined $6m for Misleading Consumers
Tuesday 20 December 2016 @ 10.07 a.m. | Trade & Commerce
In the judgment of ACCC v Reckitt Benckiser (Australia) Pty Ltd [2016] FCAFC 181 (16 December 2016), the Full Federal Court has upheld an appeal by the Australian Competition and Consumer Commission (ACCC) against the penalty imposed on Reckitt Benckiser (Australia) Pty Ltd (Reckitt Benckiser) for contravening the Australian Consumer Law (ACL) [contained in Sch 2 to the Competition and Consumer Act 2010 (Cth)].
The Full Court ordered Reckitt Benckiser to pay a revised penalty of $6 million (up from $1.7 million) for making misleading representations about its Nurofen Specific Pain products.
Background to the Case
In December 2015, following admissions by Reckitt Benckiser, the Court found that Reckitt Benckiser engaged in misleading or deceptive conduct between 2011 and 2015 by making representations on its website and product packaging, that Nurofen Specific Pain products were each formulated to specifically treat a particular type of pain, when this was not the case.
In fact, each Nurofen Specific Pain product contains the same active ingredient, ibuprofen lysine 342mg, which treats a wide variety of pain conditions and is no more effective at treating the type of pain described on its packaging than any of the other Nurofen Specific Pain products.
In early 2016, the ACCC won its case against pharmaceutical giant Reckitt Benckiser over the company's "specific pain" range. The Federal Court found the products were misleading because they all contained the same active ingredient and did the same thing. However, the ACCC then decided to appeal the penalty range given by the Federal Court to the Full Federal Court.
The Full Federal Court Judgment
In their joint decision, Jagot, Yates and Bromwich JJ stated [at para 150]:
“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 in consumers being able to making decisions about buying non-prescription medicines free from representations that are liable to mislead and thereby distort their decision-making processes.”
Their Honours also said at [para 177]:
“… There are also the circumstances of limited assistance by Reckitt Benckiser and a very late admission of liability in the face of an overwhelming case with a virtual certainty of the contraventions of at least s 33 being established. Independently of the state of mind issue, Reckitt Benckiser had multiple warnings but decided to persist with its conduct.”
Reaction from the ACCC
ACCC chairman Rod Sims said they were very pleased with the appeal result:
"We're trying to make sure that particularly larger companies take notice of making sure they comply with Australian consumer law. That does enormous detriment to the consumers involved, to the economy generally and [to] those who are competing against those companies so we felt a stronger message needed to be sent … This is the highest corporate penalty awarded for misleading conduct under the Australian Consumer Law."
Statement from Reckitt Benckiser
In a statement, Reckitt Benckiser said it was "disappointed" with court's decision to impose a higher penalty:
"Nurofen is disappointed by this decision as it considers the original penalty of the Federal Court in April [2016] was appropriate in all the circumstances. Nurofen did not intend to mislead consumers, however we recognise that we could have done more to assist our consumers in navigating the Nurofen Pain Specific Range."
The company has also been ordered to pay the ACCC's costs.
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Sources:
Nurofen fined $6m for misleading consumers following ACCC case over 'specific pain' range -abc.net.au
Full Federal Court orders $6 million penalty for Nurofen Specific Pain products - ACCC Media Release
Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd [2016] FCAFC 181 (16 December 2016)
