Consumer watchdog says fine is inadequate deterrent.
The Australian Competition and Consumer Commission (ACCC) is appealing the federal court’s decision to fine Reckitt Benckiser $1.7 million for its Nurofen Specific Pain products range.
The commission is calling for its original penalty suggestion of $6 million, “in order to send a strong deterrence message” against misrepresentation of pharmaceutical products.
In December 2015, the court found Reckitt Benckiser had made misleading or deceptive representations on its website and product packaging, by claiming each of the products was formulated to specifically treat a particular type of pain.
A low-range penalty imposed on a company the size of Reckitt Benckiser “does not act as an adequate deterrent and might be viewed as simply a cost of doing business,” says ACCC chairman Rod Sims.
“This is particularly the case when the judge found that Reckitt Benckiser had made many millions in profits from sales of 5.9 million units of these products at around 8,500 outlets during the relevant period,” he says.
However, in his 29 April 2016 ruling, Justice James Edelman’s shut down the ACCC’s attempt to quantify the amount of profit Reckitt Benckiser had made from the products, which he described as “an impossible task or so speculative as to be useless”.
Imposing a lower penalty of $1.7 million, Justice Edelman reasoned the only potential effect of Reckitt Benckiser’s conduct was monetary and “did not cause any physical harm to the consumer”.
He also cited the company’s co-operation with the ACCC’s investigation and no evidence of prior contraventions of the Australian Consumer Law in his decision.
Nurofen has acknowledged the move by the ACCC.
“Nurofen is carefully considering the appeal with its legal advisers,” brand representatives have stated.
The ACCC announced it had filed a notice of appeal against the penalty amount on Monday 23 May. A directions hearing will follow.