Reckitt Benckiser, the manufacturer of pain relief medication Nurofen, has been successfully sued by the Australian Competition and Consumer Commission (ACCC) and will be ordered to pay millions of dollars after the court found that it has engaged in misleading and deceptive conduct.
The Nurofen range includes products that claim to be formulated to treat a specific type of pain – Nurofen Back Pain, Nurofen Period Pain, Nurofen Migraine Pain and Nurofen Tension Headache. In fact, each is identical.
The Nurofen Specific Pain range sells for retail prices of around double that of Nurofen’s – and its competitors’ – standard ibuprofen products.
The ACCC alleged that Nurofen had engaged in misleading and deceptive conduct because it claimed that each specific pain product:
- was designed and formulated to treat a particular type of pain
- had specific efficacy in treating a particular type of pain
- solely treated a particular type of pain.
In reality, each of the four products is registered with the Australian Register of Therapeutic Goods with the same approved indication.
In response to the finding, a Reckitt Benckiser spokeswoman said that the range was launched with the intention of helping consumers to navigate their pain options, particularly in a grocery environment where there is no healthcare professional to assist.
ACCC Chairman Rod Sims took a different stance. He said that reports showed that consumers suffering from different types of pain were buying several products from the range, not realising they were identical. Mr Sims said that it was also conceivable that, under the belief that they were taking different products, consumers could overdose.
The ACCC has emphasised throughout this case that it takes any false or misleading claims about a product very seriously, with truth in advertising having been flagged as one of its key priorities for 2015. This same point was made last year when the ACCC sought $4 to 5 million in damages from Coles supermarket for falsely advertising its bread as ‘freshly baked in-store’.
In making its finding, the court has ordered that Reckitt Benckiser be fined up to $1.1 million per breach, and is currently assessing how many breaches there have been. It said that Reckitt Benckiser had made misleading claims on the products’ packets and on its website, and ordered that the packets and products can only be used for a further twelve months with a disclosure. After this period, the products and packets can no longer be used.
In addition to the significant fines, the court has also ordered that the company publish corrections on its website and in newspapers, pay the ACCC’s court costs, and that it implements a consumer protection compliance program.
Other organisations can be proactive in response to this decision by the court. This case is a very clear warning that if an organisation is being misleading to consumers in the way that it advertises its products, then the ACCC will actively pursue a claim. If the claim is successful, in addition to legal costs and reputational damage, fines are likely to be in the millions of dollars.
Organisations should also take note of the importance that the court places on whether they have a consumer protection compliance program in place. It’s critical that all levels of an organisation, and especially those in executive and managerial positions, are trained in Australian competition and consumer laws.