ACCC warns companies on penalties for breaching Australian Consumer Law after Voltaren advertising fail
We have all been there when it comes to misleading marketing – you’re at the supermarket in front of 10 shelves filled to the brim with 100 varieties of the same brand toothpaste or ibuprofen or paracetamol. So what does it all mean? Are they the same product (with a different packaging) or are they truly unique?
Interestingly, this was the topic of discussion in the Federal Court of Australia on 4 May 2020. The Court held that the conduct of GlaxoSmithKline Consumer Healthcare Australian (GSK) contravened Australian Consumer Law (ACL) when litigation was brought by the Australian Competition and Consumer Commission (ACCC).
The culprit? The makers of Voltaren.
The Background of Misleading Marketing
In May 2019 the Federal Court found that Novartis Consumer Health Australasia Pty Ltd (Novartis) and GSK had contravened ss 18, 29(1) and 33 of the ACL in the marketing of their pain relief Voltaren products; Voltaren Osteo Gel and Voltaren Emugel.
GSK falsely represented and mislead consumers by advertising that Voltaren Osteo Gel was more effective than Emulgel, without disclosing that it was essentially the same product. This, was the part that constituted misleading marketing.
The Court noted that both products contained the same active ingredient and in the same quantity. The only difference between the Osteo Gel and the Emulgel was the packaging (and directions on how to use it).
Consumers were mislead for about five years, namely, from January 2012 to March 2017. GSK did amend the Osteo Gel packaging eventually in 2017 to say ‘Same effective formula as Voltaren Emulgel’, but it was too late.
The Misleading Marketing Decision
Bromwich J held that during the period of 2012 – 2017, before the magic words ‘Same effective formula as Voltaren Emulgel’ were added, the conduct amounted to misleading and deceptive conduct. Accordingly, GSK had contravened the ACL and were liable to pay penalty costs brought by the ACCC to a grand total of $4.5million.
The Takeaway?
- Companies should ensure their marketing and packaging representations accurately reflect the product and are not misleading or deceiving;
- Have in place appropriate checks and reviews for all marketing materials;
- Lack of care can support a finding that contravention was intentional;
- Case by case analysis is taken by the Court; and
- The length of contravention is considered when deciding on a penalty amount.
Case citation: Australian Competition and Consumer Commission v GlaxoSmithKline Consumer Healthcare Australia Pty Ltd (No 2) [2020] FCA 724
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