Date Posted – 1 June 2021
by Katarina Klaric, Principal, Stephens Lawyers & Consultants
Knowing the advertising laws that apply to the marketing and advertising of a particular product or services is critical to avoid breaches resulting in fines and court proceedings. The recent case of Lorna Jane “Anti-virus Activewear” advertising and marketing campaign provides an example of how an advertising campaign may result in an alleged breach of not only the Australian Consumer Law but also the Therapeutic Goods Act.
TGA issues infringement notices to Lorna Jane for breaches of the Therapeutic Goods Act and Advertising Code
The Therapeutic Goods Administration (‘TGA’) issued Lorna Jane Pty Ltd, the manufacturer and supplier of woman’s active wear, three infringement notices for fines totalling $39,960 in respect of advertising of its active wear. The TGA alleged that Lorna Jane, by advertising its active wear as “Anti-Virus Activewear” protecting you against infectious diseases, like COVID -19 had represented its active wear as a therapeutic good and therefore was subject to the Therapeutic Goods Act, the regulations and Therapeutic Goods Advertising Code. Lorna Jane’s “Anti-Virus Activewear” was not on the Australian Register of Therapeutic Goods (‘ARTG’) and Lorna Jane had failed to seek approval from the TGA before making the alleged claims[i].
ACCC takes Court action against Lorna Jane for Anti-Virus Activewear claims
The Australian Competition and Consumer Commission (‘ACCC’) on the 21 December 2020 also commenced separate proceedings in the Federal Court of Australia against Lorna Jane and its director, Ms Clarkson, in respect of the advertising and marketing of the “Anti-Virus Activewear” on its website, Facebook and Instagram accounts, in media releases and instore advertising.
In summary, the ACCC has alleged that Lorna Jane had made false or misleading representations in contravention of sections 18, 29 and 33 of the Australian Consumer Law, in connection with the promotion and supply of its product promoted as “Anti-Virus Activewear”, which had been treated with a substance referred to as LJ Shield by making representations that:
- the LJ Shield Anti-Virus Activewear eliminated viruses including COVID-19
- consumers who wore the LJ Shield Anti-Virus Activewear would be protected from and could not spread viruses including COVID-19
- there was reliable scientific or technological basis for these representations,
when this was not the case. The ACCC alleged that at the time the representations were made they were not supported by scientific or other testing. The ACCC also alleged that Ms Clarkson was a party to or knowingly concerned in Lorna Jane’s contravention of the Australian Consumer Law.
The relief that the ACCC is seeking from the Court includes injunctions, corrective notices and orders for the implementation of a compliance program[ii].
Therapeutic Goods Advertising Compliance -TGA Annual Report
In addition to complying with the Australian Consumer Law, advertising of therapeutic goods (such as medicine, medical devices and complementary medicines) must also comply with the Therapeutic Goods Act, regulations and Therapeutic Goods Advertising Code. The Therapeutic Goods Act regulates the manufacturing, import, export, supply and advertising of therapeutic goods. The TGA is responsible for the administration of and compliance with the Act including advertising compliance.
The Therapeutic Goods Advertising Compliance – 2019-20 Annual Report details the TGA compliance and enforcement activities in relation to advertising breaches and includes case studies concerning illegal advertising.
With the COVID-19 pandemic the TGA has been pro-active in providing information for manufacturers, suppliers and advertisers to assist in understanding their obligations under the therapeutic goods laws. The TGA established the TGA COVID-19 Enforcement Taskforce to co-ordinate a consistent compliance in respect of testing kits, face masks, hand sanitisers and disinfectants[iii].
The TGA has also published information on its website [ https://www.tga.gov.au ] to assist advertisers with compliance including:
- Warnings and Information releases in respect of COVID-19 advertising (March 2020)
- Advertising compliance checklist-consumer advertising (October 2020).
- Advertising COVID-19 vaccines to the Australian public (22 February 2021)
- COVID-19 advertising and import compliance (22 February 2021)
The TGA issued 155 infringement notices during 2019-2020 for alleged breaches of the therapeutic goods laws or conditions of registration relating to advertising, of which 51 related to COVID-19 matters. The TGA also issued court proceedings against a number of companies and their directors seeking injunctive relief and imposition of penalties for advertising breaches[iv].
Advertising Compliance by Suppliers of Therapeutic Goods
Advertising compliance of therapeutic goods is complex covering a multitude of different products and markets. Therapeutic goods are often promoted and marketed by a broad range of suppliers including pharmacies, supermarkets, grocery stores, eBay and other e-commerce sellers, health professionals and health food shops. Advertising compliance applies to all suppliers and is not limited to manufacturers or sponsors of a therapeutic good. The complexities involving advertising compliance requires:
- A good understanding of the Therapeutic Goods Act and Therapeutic Goods Advertising Code and the prohibitions and restrictions on advertising of therapeutic goods and exemptions that apply.
- The ability to determine whether the product is a “therapeutic good” and subject to compliance with the Therapeutic Goods Act and Therapeutic Goods Advertising Code.
- Knowledge of the ARTG listing or registration requirements for products which are “therapeutic goods”.
- Continuous monitoring of guidelines, warnings and releases relating to advertising of therapeutic goods issued by the TGA.
- Continuous training and education with a comprehensive compliance program.
- Review and audit of advertising material by an external expert to ensure advertising compliance.
The TGA provides information and resources to assist manufacturers, importers and other suppliers with advertising compliance.
Authored by Katarina Klaric, Principal, Stephens Lawyers & Consultants
© Stephens Lawyers & Consultants. 23 February 2021.
This update is not intended to be a substitute for obtaining legal advice.
For further information contact:
Katarina Klaric
Principal
Stephens Lawyers & Consultants
Suite 205, 546 Collins Street
Melbourne VIC 3000
Phone: (03) 8636 9100
Fax: (03) 8636 9199
Email:stephens@stephens.com.au
Website: www.stephens.com.au
All Correspondence to:
PO Box 16010
Collins Street West
Melbourne VIC 8007
[i] https://www.tga.gov.au/media-release/lorna-jane-fined-almost-40000-alleged-advertising-breaches-relation-covid-19-and-anti-virus-activewear
[ii] Australian Competition and Consumer Commission v Lorna Jane Pty Ltd & Anor QUD 394/2020 Concise Statement and Originating Motion.
[iii] Therapeutic goods advertising compliance 2109-20 Annual Report, p24, Australian Government, Therapeutic Goods Administration, Department of Health.
[iv] Ibid, p25.
