Reckitt Benckiser has been ordered to pay the highest corporate penalty awarded for misleading conduct in Australia over claims about its Nurofen Specific Pain range.
The Full Federal Court upheld an appeal by the Australian Competition and Consumer Commission to have an initial penalty of $1.7 million more than tripled to $6 million to deter other companies from misleading the public.
At the heart of the complaint are Reckitt Benckiser’s claims that Nurofen special range relief tablets target specific types of pain when each product contained the same active ingredient, ibuprofen lysine 342mg.
Nurofen’s Special Pain range had been sold at a much higher price than standard Nurofen on the basis they were formulated to target specific pain.
In December 2015, Reckitt Benckiser admitted misleading marketing and in April 2016, judge Justice Edelman ordered Reckitt Benckiser to pay a penalty of $1.7 million, which was immediately appealed as being inadequate.
“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”.
The ACCC is advocating to increase penalties under a review of the Australian Consumer Law.
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