Reckitt Benckiser (Australia) Pty Ltd v ACCC [2017] HCASL 86: High Court Upholds Record Fine against Nurofen
Friday 28 April 2017 @ 10.17 a.m. | Legal Research | Trade & Commerce
In the case of Reckitt Benckiser (Australia) Pty Ltd v ACCC [2017] HCASL 86 (5 April 2017), the High Court has ordered the manufacturer of Nurofen to pay a $6 million fine for misleading consumers with its specific pain relief range, after the High Court rejected its latest appeal.
Background to the Case
Between 2011 and 2015, the company sold 5.9 million packets of the specific pain relief medication range, yielding revenue of $45 million. The specific pain range claimed to "target" back pain, migraine, tension headache or period pain, when they in fact all contained the same active ingredient, ibuprofen lysine 342mg. These pain specific Nurofen packages were set at a significant price premium to regular Nurofen.
In December 2015, the Federal Court ordered that all Nurofen specific pain products be removed from retail sale within three months, and the company post corrective notices in newspapers and on its website. There were various representations made on Nurofen's website that were also found to be misleading.
In 2016, the Australian Competition and Consumer Commission (ACCC) won its case against Reckitt Benckiser, with the Federal Court finding that the products were misleading because they all contained the same active ingredient and did the same thing, despite claims they targeted different parts of the body.
The April 2016 Ruling
In April 2016, Trial judge Justice Edelman ruled that Reckitt Benckiser pay $1.7 million for contravening Australian Consumer Law [Sch 2 to the Competition and Consumer Act 2010 (Cth)] for making misleading representations about its products, in a decision that the ACCC appealed in May 2016.
The ACCC claimed that a penalty of $1.7 million would not prevent other companies from engaging in similar behaviour, and that $6 million was more appropriate to send a strong message.
Comment and Reaction from Reckitt Benckiser
Reckitt Benckiser said it was "disappointed by the decision" and, in a company statement, said:
"Nurofen did not intend to mislead consumers and we apologise to those of our consumers who were misled. We recognise that we could have done more to assist our consumers in navigating the Nurofen specific pain range. That is, to show that each of the products in the range is equally effective for the other pains indicated on the Nurofen specific pain range packaging."
Reaction from the ACCC
The ACCC chairman Rod Sims, welcomed the upholding of the fine, saying companies needed to be sent a strong message:
“This is the highest corporate penalty awarded for misleading conduct under the Australian Consumer Law. The ACCC welcomes this decision, having originally submitted that a penalty of $6 million or higher was appropriate given the longstanding and widespread nature of the conduct, and the substantial sales and profit that was made.”
The company said it had already paid the penalty in accordance with court orders made in December 2016.
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Sources:
Reckitt Benckiser cops biggest fine ever after losing misleading Nurofen specialist painkillers appeal – mumbrella.com.au
Nurofen manufacturer Reckitt Benckiser fined $6 million for misleading customers after failed High Court appeal – abc.net.au
Reckitt Benckiser (Australia) Pty Ltd v ACCC [2017] HCASL 86 (5 April 2017)
