No Joy for Online e-Cigarette Retailer
Monday 19 September 2016 @ 2.56 p.m. | Legal Research | Trade & Commerce
The Australian Competition and Consumer Commission (ACCC) has commenced proceedings in the Federal Court against an online e-cigarette retailer, The Joystick Company Pty Ltd (Joystick), for alleged false or misleading representations that its products did not contain any toxins or formaldehyde, were “independent from” chemicals found in conventional cigarettes, and had been approved by the ACCC.
Background to the Action
The proceedings against The Joystick Company follow the ACCC’s decision to commence proceedings against Social-Lites Pty Ltd and Elusion New Zealand Limited in June 2016, also for alleged breaches of the Australian Consumer Law (the ACL) [Sch 2 to the Competition and Consumer Act 2010 (Cth)].
The ACCC’s enforcement actions against these three suppliers followed a survey it conducted of Australian e-cigarette businesses websites. The ACCC will contact other industry participants putting them on notice about their consumer law obligations not to mislead consumers about the composition and safety of the products they are offering for sale.
Previous ACCC action
The ACCC had previously issued Joystick with three infringement notices as it had reasonable grounds to believe that the company had made a number of false or misleading representations. Joystick did not pay the penalties specified in the infringement notices within the specified payment period.
The proceedings were commenced after independent testing commissioned by the ACCC indicated that the Joystick’s e-cigarette product tested contained toxic chemicals including formaldehyde, acetaldehyde and acrolein:
- Formaldehyde is classified by the World Health Organisation (WHO) International Agency for Cancer Research (IARC) as a Group 1A carcinogen, meaning there is sufficient evidence to show it is carcinogenic to humans;
- Acetaldehyde is classified as a Group 2B carcinogen by the IARC. That classification is applied to a chemical agent that has been evaluated as being possibly carcinogenic to humans; and
- Acrolein is classified by the WHO as a toxic chemical. It is also listed as a dangerous poison in Sch 7 of the Poisons Standard of the Therapeutic Goods Act 1989 (Cth).
Comment from the ACCC
In an ACCC Media Release, the ACCC Commissioner Sarah Court was quoted as saying:
“It is crucial that suppliers have scientific evidence to support claims that their products do not contain carcinogens and toxic chemicals such as formaldehyde and acetaldehyde. This is particularly important when, as here, products are designed to be inhaled and are being differentiated from conventional tobacco cigarettes because they are claimed not to contain toxic chemicals. This action against Joystick also reflects the ACCC’s policy that enforcement proceedings will be considered against businesses which do not pay the penalties specified in infringement notices within the payment period.”
The ACCC has also alleged that the sole director of Joystick was knowingly concerned in the conduct. The consumer watchdog is seeking pecuniary penalties, declarations, injunctions, orders for an ACL compliance program, publication orders and costs.
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Sources:
ACCC takes action against the Joystick company for alleged misleading e-cigarette “no toxic chemicals” claims – ACCC Release MR 165/16
