The makers of pain relief product Voltaren have been ordered to pay penalties of $4.5 million after the Federal Court found that they had marketed and sold the same formulation of Voltaren as two separate products with different applications.
The ACCC commenced action against Novartis Consumer Health Australasia Pty Ltd (Norvatis) and GlaxoSmithKline Consumer Healthcare Australia Pty Ltd (GSK) after investigations revealed that Voltaren Emulgel (Emulgel) and Voltaren Osteo Gel (Osteo Gel) were identical products that were being marketed as though they were different, with Osteo Gel represented as the favourable choice for pain associated with osteoarthritis.
Background
Norvatis and GSK sold both Emulgel and Osteo Gel from 2012 to 2017. Despite both products possessing the same active ingredient, they were often displayed side-by-side with different packaging and separate claims as to their pain-relief power. Osteo Gel was also sold at a higher price in some cases, with the ACCC’s investigation revealing that some stores were selling it at a cost that was 33 per cent higher than Emulgel.
Federal Court Proceedings
As a result of their investigation, the ACCC sought orders and pecuniary penalties against Norvatis and GSK in the Federal Court for an alleged breach of sections 18, 29(1)(g) and 33 of the Australian Consumer Law (ACL). Their case was that Norvatis and GSK had not made it sufficiently clear on their website and packaging that there was no difference at all between Emulgel and Osteo Gel.
The ACL provides the following:
- A person must not engage in conduct that is misleading or deceptive or is likely to mislead or deceive (section 18);
- A person must not (in connection with the supply of goods or services) make a false or misleading representation that those goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits (section 29(1)(g)); and
- A person must not engage in conduct that is liable to mislead the public as to the nature, the manufacturing process, the characteristics, the suitability for their purpose or the quantity of any goods (section 33).
While Norvatis and GSK conceded that they had contravened these provisions from 2012 to March 2017, they disputed that this had continued from March 2017 up until May 2018, when Osteo Gel was pulled from the shelves. This was because during this fourteen-month period, Osteo Gel packaging had been updated to include the phrase ‘same effective formula as Voltaren Emulgel’.1 In determining this issue, the Federal Court stated that GSK had ‘perhaps by a whisker’ gone far enough with their updated packaging to avoid contravening the ACL.
As for the remaining time period (2012 to March 2017), Norvatis and GSK had admitted their contraventions of the ACL and so the only issue for the Federal Court to consider was the pecuniary penalty. Last week, the court delivered their decision, ordering GSK to pay penalties of $1.5 million and Novartis to pay penalties of $3 million.
Takeaways
- Businesses must think carefully about the claims that they put on their packaging or website, particularly if the claims could mislead consumers as to the nature or characteristics of the goods; and
- It is important for business to examine their packaging, website content and other promotional materials to ensure that they do not fall foul of the consumer protection laws contained in the Australian Consumer Law.
This article was written by Teresa Torcasio, Partner, Chantelle Radwan, Solicitor and Zoe Vise, Graduate.
1. Australian Competition and Consumer Commission v GlaxoSmithKline Consumer Healthcare Australia Pty Ltd & Anor (2019) 371 ALR 396 at [397].
