ACCC to appeal $1.7 million Fine Over Misleading Nurofen Products
Tuesday 24 May 2016 @ 9.34 a.m. | Legal Research | Trade & Commerce
It has been reported that the consumer watchdog will appeal a $1.7 million fine issued to the maker of Nurofen over its misleading "specific pain" range, saying it should be increased to at least $6 million.
The Australian Competition and Consumer Commission (ACCC) has filed a Notice of Appeal from the Federal Court’s decision ordering Reckitt Benckiser to pay penalties of $1.7 million for contravening the Australian Consumer Law (ACL) [contained in Sch 2 to the Competition and Consumer Act 2010 (Cth)].
Background
The ACCC says the fine handed down in the Federal Court on 29 April 2016 is not severe enough to deter a company as large as Reckitt Benckiser from deceiving customers.
In an article also featured in TimeBase, in December 2015 the Federal Court found that Reckitt Benckiser engaged in misleading or deceptive conduct by falsely claiming that Nurofen specific pain products were formulated to treat particular types of pain.
The ACCC’s response
The ACCC said that a penalty of at least $6 million was required to send a strong message, given the longstanding and widespread nature of Reckitt Benckiser's conduct and the large profit it made from the products.
ACCC chairman Rod Sims said:
"It's really all about making sure there's adequate deterrence coming from these judgements and these penalties. We're just not sure it would be taken that seriously with a penalty of $1.7 million."
Mr Sims said the fine should take into account Reckitt Benckiser's size and the fact it made millions in profit from selling 5.9 million units of the misleading products. The British company reported £8.87 billion ($17.7 billion) in net revenue in 2015.
Reaction from the Company
Reckitt Benckiser argued in court that a $1.1 million fine was appropriate.
Justice Edelman said the penalty would have been "far greater" if it were not for a few factors, including that the ACCC had not argued that the company's conduct was intentional or reckless.
He also gave the group a discount for co-operating with the ACCC's investigation and admitting to its wrongdoing, which led to other allegations falling away. Reckitt Benckiser said in a statement it was "considering the appeal with its legal advisers".
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:
ACCC appeals $1.7m penalty against Reckitt Benckiser for misleading Nurofen representations – ACCC Release MR 86/16
ACCC to appeal $1.7 million fine over misleading Nurofen products – smh.com.au
