Reckitt Benckiser was just ordered to pay the highest corporate penalty ever awarded for misleading conduct under the Australian Consumer Law – to the tune of $6 million – for falsely claiming Nurofen Specific Pain products were each formulated to specifically treat a particular type of pain.
In December 2015, following admissions by Reckitt Benckiser, the Court found that Reckitt Benckiser “engaged in misleading or deceptive conduct” between 2011 and 2015 with the claims.
It turns out, each Nurofen Specific Pain 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.
On 29 April 2016, the trial judge Justice Edelman ordered Reckitt Benckiser to pay a penalty of $1.7 million for making misleading representations about its Nurofen Specific Pain products, and the ACCC appealed the Federal Court’s decision on 23 May 2016.
Noe the Full Court has found that the initial penalty of $1.7 million was manifestly inadequate given the need for deterrence and the substantial consumer loss suffered.
“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,” ACCC Chairman Rod Sims said
In their joint decision, Justices Jagot, Yates and Bromwich stated “The objective of any penalty in this case must be to ensure that Reckitt Benckiser and other ‘would-be wrongdoers’ think twice and decide not to act against the strong public interest”.