Federal Court declares Advanced Medical Institute's advertising 'misleading'

17 August 2006

Advertisements themed on "TV's Star amazing CONFESSION!" to erectile dysfunction and premature ejaculation (impotence) featuring Mr Ian Turpie have been declared to be misleading and deceptive by the Federal Court. 

The court declared that Advanced Medical Institute Pty Ltd engaged in conduct that was misleading or deceptive in breach of section 52 of the Trade Practices Act 1974 by causing the advertisements to be published in major newspapers* in Australia from 27 March to 18 April 2004 featuring Mr Turpie, and containing representations including:

  • that Mr Turpie had undertaken an interview during which he disclosed, in the presence of his wife, that he was losing his sexual potency, and
  • AMI nasal delivery system had cured or alleviated Mr Turpie of the effects of impotence or erectile dysfunction. 

The court also declared that Mr Philip Somerset, of ColbyCo Media, the advertising agent for AMI, by preparing and causing the advertisements to be published, was knowingly concerned in, or party to, the breach of section 52 of the Act. 

Justice Lindgren found that Mr Philip Somerset had been knowingly concerned in AMI's contraventions as he knew that the advertisements representations were not true. The court also ordered both AMI and Mr Somerset to pay the ACCC's costs. 

Justice Lindgren declined to make any orders as to injunctions and corrective advertising. He thought that the conduct of the parties had ceased and there was no longer any threat of repetition. He also thought that the offending representations in the advertisements had also ceased to have any influence that might be overcome by corrective advertising.

The ACCC instituted the proceedings on 19 July 2004, against AMI, Mr Somerset and Mr Ian Turpie alleging that the representations in the advertisement featuring Mr Turpie were not true.

Following Mr Turpie's admission of his involvement in the alleged conduct, the ACCC granted him partial immunity in return for his cooperation. On 1 September 2004, the ACCC discontinued legal proceedings against Mr Turpie when the court, by consent, made an injunction restraining Mr Turpie from engaging in the offending conduct or similar conduct in the future and to attend a trade practices compliance seminar.

"This decision is an important warning to all celebrities in that they must ensure that they have used the product or services of a corporation before recommending or approving a corporation's products or services to the public", ACCC Chairman, Mr Graeme Samuel, said today.

"The decision is a warning to advertising agents who play an important role in the preparation and causing the publication of advertisements on behalf of their clients".

A cross-claim made by AMI against Mr Turpie was dismissed.

Release number: 
MR 183/06
Media enquiries: 
Mr Graeme Samuel - (02) 6243 1131
Ms Lin Enright - (02) 6243 1108