A recent decision of the Federal Court of Australia reiterates the need for businesses to ensure any comparative advertising claims are capable of substantiation through current and relevant scientific evidence or otherwise risk breaching the Australian Consumer Law.
The case of GlaxoSmithKline Australia Pty Ltd v Reckitt Benckiser (Australia) Pty Limited (No 2)  FCA 1 considered the issue of comparative advertising and a party’s attempted reliance on scientific evidence to justify claims that their product was superior to that of a competitor’s products. This Case Alert provides a snapshot of the key issues and findings relating to the case.
GlaxoSmithKline (GSK) is the manufacturer of Panadol, containing the active ingredient paracetamol. Reckitt Benckiser (RB) is the manufacturer of Nurofen, containing the active ingredient ibuprofen.
During late 2015, RB engaged in a comparative advertising campaign that (among other things) claimed Nurofen:
• was better (or superior) than paracetamol;
• provided faster pain relief than paracetamol; and
• was more effective than paracetamol,
in relation to headaches (the Representations).
RB’s Nurofen advertising campaign featured across many prominent marketing mediums including TV, magazines, journals, retail catalogues, point of sale and billboards.
The scientific studies
RB based the Representations on one clinical trial undertaken in 1996 known as the Schachtel Study. The claimed conclusion of the Schachtel Study was that it demonstrated a single dose of ibuprofen 400mg is significantly more effective than acetaminophen 1000mg (otherwise known as paracetamol) in the treatment of muscle contraction headache.
Two further studies carried out were designed to compare the speed and efficacy of treatment between ibuprofen and paracetamol. Results from these two further studies did not replicate the results of the Schachtel Study. Additionally, three subsequent analyses by reputable scientists concluded there was no scientific basis for supporting the alleged superiority of ibuprofen over paracetamol.
In October 2015, GSK commenced proceedings against RB alleging RB had (among other things) engaged in misleading or deceptive conduct (or conduct that was likely to mislead or deceive) and made false presentations in contravention of sections 18, 29(1)(a) & 29(1)(g) of the Australian Consumer Law (ACL). GSK argued that RB did not have reasonable grounds to make the Representations given the other studies and analyses referred to above.
RB admitted that it made the Representations but denied it did not have reasonable grounds (or an adequate foundation in scientific knowledge) to support the Representations. RB’s defence relied on the conclusions of the Schachtel Study, the fact that no other clinical trial proved the opposite of those results or put those results in doubt. RB also referred to its success against GSK before a medication complaints panel in 2014 regarding similar issues.
The Court found RB did not have reasonable grounds for making the Representations given:
• the only study supporting the Representations the Schachtel Study;
• subsequent studies and analyses did not support the Schachtel Study (but did not disprove the Schachtel Study either); and therefore
• the Schachtel Study did not represent the current body of scientific knowledge at the time the comparative advertising campaign was carried out.
It followed that RB had, by making the Representations, contravened the ACL.
Comparative advertising is inherently risky given its purpose of showing competitors in an unfavourable light. When making comparative advertising claims, businesses should take extra care to ensure their claims are based on current scientific evidence. This will likely involve looking further afield than merely one or two scientific studies but to also consider, more fully, the relevant scientific landscape. Further, and as has been demonstrated by many other cases, businesses cannot always rely on disclaimers to avoid engaging in misleading or deceptive conduct. Given potential maximum penalties of $1.1million for each contravention of the ACL relating to misleading and deceptive conduct, there is extra motivation for getting comparative advertising right. RB has applied for leave to appeal the decision.
This article is provided by way of general information only and is not legal advice. Always obtain your own independent legal advice tailored to your business’ particular circumstances before making decisions relating to the legal issues referred to above. In this regard, we’re here to help. You can contact us on (03) 9596 8495 or at email@example.com.