News & Insights

A popular activewear brand has recently made headlines for allegedly engaging in unlawful advertising practices in relation to COVID-19.

Lorna Jane was issued with infringement notices by the Therapeutic Goods Administration (TGA) for just under $40,000, following claims on its website that certain lines of merchandise protected wearers “against viruses and bacteria”.

This comes a few months after celebrity chef Pete Evans’ company was fined by the TGA, over claims that a light-emitting ‘BioCharger’ device could be used in relation to “Wuhan Coronavirus”.

Claims relating to COVID-19 are not only restricted under the therapeutic goods legislation, but also regarded as serious and of significant concern to regulatory bodies.

These cases are a timely reminder that businesses must be careful not to make false or misleading claims – in relation to COVID-19, or otherwise.

UPDATE: Since the time of this article, the ACCC has initiated proceedings in the Federal Court against Lorna Jane in breach of the Australian Consumer Law. The ACCC is seeking declarations, penalties, injunctions, corrective notices and an order to implement a compliance program.

what claims can businesses make?

Whilst advertising is an important element of building trust, awareness and revenue for businesses, it is critical that any marketing campaign is undertaken in compliance with the relevant laws applicable to the products.

Broadly, the Australian Consumer Law imposes general obligations on businesses prohibiting them from making statements that are incorrect or likely to create a false impression. This prohibition extends to statements made in advertising, on product packaging, on websites and social media pages, and verbally by staff.

Certain other products may also have requirements imposed by more specific legislative frameworks, such as the Therapeutic Goods Advertising Code. This Code provides that the advertising of such goods is only conducted in a manner that promotes the quality and use of the products, is socially responsible and doesn’t mislead or deceive consumers.

First and foremost, if a business intends to make a particular claim (e.g. about the quality or benefits of a product), it must be able to substantiate this claim.

is your business marketing or advertising without knowing what its obligations are?

Importantly, it is irrelevant whether the business intended to mislead consumers or not. Publishing a marketing campaign can take a lot of time, resources and management which can be quickly undone and cause reputational harm to a business.

If your business has made (or intends to make) a specific claim about a product, is uncertain about what laws it is required to comply with or how these laws may apply to your marketing campaign, don’t hesitate to contact a member of our Trade Team.

The information contained in this article is general in nature and cannot be relied on as legal advice nor does it create an engagement. Please contact one of our lawyers listed above for advice about your specific situation.