Firm fined for testimonials by Facebook "fans" and tweeters

11 February 2011

The Federal Court has fined Allergy Pathway Pty Ltd (formerly known as Advanced Allergy Elimination) and its director, Mr Paul Keir, $7,500 each for contempt of undertakings made to the court.

In August 2009 Allergy Pathway and Mr Keir gave undertakings to the court following successful Australian Competition and Consumer Commission action for false, misleading and deceptive conduct.

Justice Finkelstein has found that Allergy Pathway and Mr Keir made prohibited representations about Allergy Pathway's purported allergy treatment on its website and on Twitter, Facebook and YouTube in breach of those undertakings.

The representations included testimonials written and posted by clients on Allergy Pathway's Facebook "wall" and testimonials written by clients and posted by Allergy Pathway on its website and Facebook and Twitter pages.

In his judgment Justice Finkelstein held that: "while it cannot be said that Allergy Pathway was responsible for the initial publication of testimonials (the original publisher was the third party who posted the testimonials on Allergy Pathway's Twitter and Facebook pages) it is appropriate to conclude that Allergy Pathway accepted responsibility for the publications when it knew of them and decided not to remove them. Hence it became the publisher of the testimonials."

In responding to the judgment, ACCC chairman Graeme Samuel said: "Many corporations now use Facebook "Fan" pages and Twitter accounts to promote their businesses.  This outcome confirms that any business that decides to leave public testimonials or other comments on their Facebook and Twitter pages will be held responsible if they are false, misleading or deceptive."  
 
In August 2009, Allergy Pathway undertook not to represent that:

  • it can accurately test for and identify an allergen for a person and/or a substance which causes a person's allergic reaction
  • it can cure or eliminate, or successfully treat, any allergies or any allergic reactions
  • its treatment for a person's allergies or allergic reactions is safe and/or low risk, or
  • after its treatment of a person's allergies or allergic reactions it is safe for that person to have contact with the allergen to which the person had an allergic reaction. 

Mr Keir undertook not to be directly or indirectly involved in the publication of any of these representations.

In addition to the fines, the court ordered that Allergy Pathway and Mr Keir be restrained from engaging in similar conduct for a further period of three years and to publish corrective advertising. Allergy Pathway and Mr Keir were also ordered to pay the ACCC's legal costs on an indemnity basis.

Release number: 
NR 028/11
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Media enquiries: 
Mr Graeme Samuel - (03) 9290 1812
Ms Lin Enright - (02) 6243 1108