Misleading And Deceptive Advertising: Avoiding The Headache

By Alicia Hill, Principal, MST Lawyers and Benjamin Caddaye, Law Clerk, MST Lawyers

The recent Federal Court decision in GlaxoSmithKline Australia Pty Ltd v Reckitt Benckiser (Australia) Pty Limited (No 2) [2018] serves as a salient reminder of advertiser’s obligations when making claims about their products. The decision handed down in January by Foster J provides an important lesson of what a proper scientific basis is to support a representation made in an advertisement. A proper basis is vital in order to avoid the operation of the misleading and deceptive conduct provision under the Australian Consumer Law (ACL).

Misleading and Deceptive Conduct under the Australian Consumer Law

Section 18 of the ACL contained in Schedule 2 of the Competition and Consumer Act 2010 (Cth) provides that a person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive. It is one of the most litigated sections of the ACL and carries with it a wide discretionary array of potential sanctions as outlined in section 243.

The obligation imposed by this section includes acts, omissions, statements, or silence and applies to representations of future matters. The latter was the type representation claimed to be misleading or deceptive in the GlaxoSmithKline v Reckitt Benckiser proceedings.

The Factual Background

In 2015, Reckitt Benckiser (Reckitt), the manufacture of the Nurofen line of ibuprofen products ran an advertising campaign in both print media and on commercial television which purported that;

• ‘In a clinical study, Nurofen was found to be superior to paracetamol for treating tension-type headaches’;
• Nurofen ‘[provided] more effective pain relief’; and
• ‘…for faster pain relief than standard Nurofen, try Nurofen Zavance.’

Unsurprisingly, Nurofen’s major competitor, the paracetamol based Panadol brand owned by GlaxoSmithKline (GSK) took issue with the representations made about its product being inferior to Nurofen. In early 2016, GSK commenced a section 18 action against Reckitt, claiming that the advertising was misleading and deceptive.

The representation was categorised as one concerning future matters. This was because the advertisement, in essence, said to a potential consumer ‘if you take this product you will get the benefits claimed, namely superior pain relief, faster and more effectively than if you took paracetamol.’ Because it was a representation as to a future matter, the law required Reckitt to prove that at there was an adequate basis for the representation at the time it was made. If this is discharged, then the onus would be on GSK to prove that it was in fact, unreasonable.

The Scientific Basis

In fine print below the impugned Nurofen advertisements was a reference to ‘Schacthel et al., 1996’. This was the study relied upon by Reckitt to show that there was an adequate basis for the claims and therefore reversing the onus of proof onto GSK. Foster J decided that this Study was enough to deprive GSK of the evidential advantage of having Reckitt prove that the representations were in fact reasonable. Therefore, GSK was required to show that in light of all the scientific evidence available at the time the representation was made, it was in fact, unreasonable.

GSK led evidence at trial of the body of scientific research that existed in 2015 surrounding the efficacy of paracetamol compared to ibuprofen as an analgesic. A summary of the relevant studies is as follows;

• The Schachtel Study; found that a single 400mg dose of Ibuprofen is significantly more effective than a 100mg dose of acetaminophen (paracetamol) in the treatment of muscle contraction headaches.
• Study NL9701; found that there was no statistically significant superiority between ibuprofen and paracetamol.
• NCT Study; did not support the findings of the Schachtel Study, but, like the NL9701 Study, did not sport the opposite proposition either.
• The Moore Study; this study was a meta-analysis of other studies, including the Schachtel and NL9701 It found that there was little difference amongst the drugs.
• Cochrane 2015 Study; found that 400mg of Ibuprofen was probably not much different from any other treatment based on what is known.

As it can be seen, study (a) clearly supported Nurofen’s representations, and it was the study heavily relied upon by Reckitt at trial. However, Foster J ultimately decided that on the balance of the studies, they did not support the representation made. 

Reckitt tried to argue that the later studies (b)-(e) were neutral on study (a) in that they did not support the opposite proposition. His honour dismissed this argument, concluding that it would be too simplistic a view of the body of scientific evidence to conclude that just because the later studies did not disagree with Study (a) that it was reasonable to conclude that Ibuprofen was more effective than paracetamol.

Practical Implications

In reviewing the decision, it is clear that Reckitt had a scientific basis for their claim. However, GlaskoSmithKline v Reckitt Benckiser shows that the Court is willing to look at the whole body of scientific evidence available to that business at the time to determine whether, in all the circumstances, the claim was, in fact, reasonable to make. Therefore, when conceiving an advertising campaign, a business must be particularly careful not to conclude that just because there is some basis for a claim, it will be enough to justify it when one looks at all of the evidence available.

For more information about this case or matters raised in this study, please contact Alicia Hill by email or call +61 3 8540 0200.