Reebok and Miranda Kerr – False and misleading representations in advertising

Reebok, and the rest of the commercial work, has been reminded that if you are advertising your business or products, it is important to ensure that any claims made in relation to those products are truthful and can be proven.

In a recent case brought by the Australian Competition and Consumer Commission in the Federal Court of Australia, Reebok Australia Pty Ltd (‘Reebok’) was ordered to refund $35.00 to any customer who had purchased EasyTone shoes. This was in addition to a $350,000 fine.

These orders were made on the basis that the shoe boxes and swing tags, information cards/booklets and in-store promotional material related to the shoes claimed 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. These claims were false and misleading and consequently contravened the Australian Consumer Law (ACL). The claims had also been the subject of actions against Reebok International Ltd by the US Federal Trade Commission.

The case is an example of the importance to individuals and businesses of ensuring that any material advertising products or services is not misleading or deceptive or likely to mislead or deceive and that all claims made in relation to those products can be backed up. The ACL imposes penalties of fines up to $1.1 million for companies and $220,000 for individuals. Contraventions of the ACL can also expose individuals or businesses to orders to pay damages or compensation and undertake corrective advertising.

The ACL, at section 18(1) and formerly the Trade Practices Act section 52(1), 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.’ While the concept of deceptive conduct requires an intention to deceive, the concept of misleading requires no intention. The concept of misleading in the law imposes a strict liability onto individuals and businesses not to lead any person into error in commercial or consumer dealings. In addition to imposing liability for making misleading claims, the law may also find a person has contravened the ACL for not saying something – for example, by failing to correct a statement that is made in a misleading context.

What’s Miranda Kerr got to do with this case?  She modelled the EasyTone shoes in the marketing campaign which was the subject of this case.

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