The Federal Court has by consent ordered Reebok Australia Pty Ltd (Reebok) to pay a pecuniary penalty of $350,000 for making false and misleading representations about the benefits of Reebok EasyTone shoes, in proceedings brought by the Australian Competition and Consumer Commission.
The Court found that Reebok’s representations on the shoe boxes and swing tags on shoes, and information cards/booklets and in-store promotional material that if a person walked in a pair of EasyTone shoes, they would increase the strength and muscle tone of their calves, thighs and buttocks more than if they were wearing traditional walking shoes were false and misleading and consequently contravened the Australian Consumer Law (ACL). Further, the Court held that Reebok had no reasonable grounds for making the representations.
“Where businesses claim their products have certain performance characteristics and benefits, they have a responsibility to ensure that those claims are accurate and supported by credible evidence. This is particularly important in cases such as this where it is difficult for consumers to independently verify the claims,” ACCC Deputy Chair Delia Rickard said.
Reebok has imported and sold Reebok EasyTone shoes in Australia since December 2009. The ACCC’s proceedings related to the representations made by Reebok in connection with the sale and promotion of the EasyTone shoes from September 2011 to February 2013, when Reebok was aware that similar claims about the shoes were the subject of a settlement following enforcement action taken by the US Federal Trade Commission against Reebok International Ltd.
“The fact that these claims made about the alleged benefits of EasyTone shoes had come to the attention of regulators in other jurisdictions but still continued to be made in Australia by Reebok was of particular concern to the ACCC,” Ms Rickard said.
The Federal Court made orders requiring Reebok to provide a refund of $35 per pair to consumers who purchased a pair of the Easy Tone shoes from September 2011 to February 2013 and who believe they suffered loss or damage as a result of Reebok’s representations. Reebok is required to establish a 1800 number by which consumers can contact Reebok, and to publish corrective notices with details of how consumers can seek redress.
The Court also made orders for implementation of a compliance program and costs.