Reckitt Benckiser ordered to pay $1.7 million in penalties for misleading conduct

The Federal Court has ordered Reckitt Benckiser (Australia) Pty Ltd to pay a penalty of $1.7 million for engaging in misleading conduct in relation to its Nurofen Specific Pain products, in proceedings brought by the Australian Competition and Consumer Commission.

The Court ordered Reckitt Benckiser to pay $1.7 million in penalties for contravening the Australian Consumer Law (ACL) by making representations on its website and 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 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 taking this enforcement action, the ACCC was particularly concerned that consumers had been misled into purchasing Nurofen Specific Pain  Products, and paying more for those products, in the belief that each product was specifically designed for and effective in treating a particular type of pain, when this was not the case,” ACCC Chairman Rod Sims said.

“The ACCC had submitted that a penalty of at least $6 million was appropriate in order to send a strong deterrence message and due to the longstanding and widespread nature of the conduct and the substantial sales and profit that was made by selling the product. We will carefully consider the judgment.”

In ordering a penalty of $1.7 million, Justice Edelman found that, while consumers potentially suffered financial loss due to the price premium attached to the products, they were still effective in treating the pain that they represented. In addition, although Reckitt Benckiser’s conduct was designed for profit, the profit made from the contravening conduct was unquantifiable and the products did not cause any physical harm to consumers.

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“The ACCC is advocating for an increase to the maximum penalty for breaches of consumer laws as part of the Australian Consumer Law Review. The current maximum penalty of $1.1 million per contravention is arguably inadequate for very large companies,” Mr Sims said.

The Nurofen Specific Pain product range consists of Nurofen Back Pain, Nurofen Period Pain, Nurofen Migraine Pain and Nurofen Tension Headache. During the period from 2011 to 2015, the Nurofen Specific Pain products were sold across thousands of retail and pharmacy stores nationwide.

The misleading representations were made on the packaging of the Nurofen Specific Pain products and on Reckitt Benckiser’s website www.nurofen.com.au.

Price sampling conducted by the ACCC before the proceedings commenced indicated that the Nurofen Specific Pain products were being sold at retail prices almost double that of Nurofen’s standard ibuprofen products and the general pain relief products of its competitors.

In December 2015, the Court declared that Reckitt Benckiser’s conduct was misleading, in contravention of the ACL. It also ordered Reckitt Benckiser to remove the Nurofen Specific Pain products from retail shelves, publish website and newspaper corrective notices, implement a consumer protection compliance program, and pay the ACCC’s costs.

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