An Australian business making unsubstantiated health and other claims for its products on the Internet has been found by the Federal Court to have engaged in misleading and deceptive conduct, contrary to the Trade Practices Act 1974.
The decision is important as it acts as a warning against making unsubstantiated health claims and also underlines that businesses using '.com' domain names cannot hide behind overseas registration to evade the jurisdiction of Australian courts, or the reach of the Act, Australian Competition and Consumer Commission Chairman, Professor Allan Fels, said today.
In addition the court found that the business, Purple Harmony Plates Pty Ltd, had the authority to instruct others to place material on its website and consequently the business has been ordered to amend the website and place corrective statements.
The ACCC had alleged, and the court ruled, that Purple Harmony Plates Pty Ltd, based in Melbourne, had made unsubstantiated claims about the future benefits for its products, which were made of anodised aluminium in various shapes, sizes and colours.
The claims included that the plates:
-
protected against electromagnetic radiation from computers, televisions, mobile telephones etc
-
energised water and freed it from odour and chlorine
-
lowered body stress and fatigue levels
-
grouped together heavy metals and other impurities [in water] into larger molecules so that they could not be absorbed by the body
-
helped strengthen the immune system
-
increased general health
-
accelerated healing
-
reduced less severe aches and pains or niggly coughs and colds
-
improve plant growth
-
ionised car fuel to allow a more complete fuel burn.
The judge found that Purple Harmony Plates Ltd could not reasonably demonstrate a basis for any of the above claims.
The Federal Court orders included:
-
declarations that the business engaged in misleading and deceptive conduct prohibited by the Trade Practices Act 1974
-
injunctions preventing the business from engaging in similar conduct in the future
-
corrective statements in writing to customers
-
refunds to consumers who believe they were misled.
Purple Harmony Plates Ltd also has been ordered by the court to publish a corrective statement on its website within 14 days. It will be required to offer refunds and the corrective statement will be displayed immediately upon accessing the website’s homepage and the order form. Consumers must disable the pop-up corrective statement before using the homepage or order form.
"It is believed this is the first time such an order has been made by an Australian court in relation to misleading conduct on the Internet".
"Progressive changes in State and Territory health professions regulations have relaxed many of the previous restrictions on advertising giving health professionals greater opportunity to communicate directly with consumers. "Advertisements can be extremely useful for the community to clearly inform it about the services of particular groups – but they must not mislead, for example, about the efficacy of such services".
Professor Fels reminded the health sector that a guide had been produced to assist it to better understand its rights and responsibilities in this area.
"The guide was produced by the ACCC and the Health Care Complaints Commission, acting in consultation with each of the State/Territory health complaints agencies and relevant stakeholders around Australia. It was launched last year and aims to help the sector to develop strategies to ensure compliance with the various Acts".
Fair treatment: Guide to the Trade Practices Act for the advertising or promotion of medical and health services is available from the ACCC on 1300 502 302.