Reebok Australia To Pay $350,000 For False And Misleading Representations
Thursday 13 November 2014 @ 10.09 a.m. | Trade & Commerce
In a yet to be released judgment, the Federal Court has by consent ordered Reebok Australia Pty Ltd (Reebok) to pay a pecuniary penalty of $350,000 for making false and misleading representations about the benefits of Reebok EasyTone shoes, in proceedings brought by the Australian Competition and Consumer Commission (ACCC).
The Court’s Findings
The Court found that Reebok’s representations on the shoe boxes and swing tags on shoes, and information cards/booklets and in-store promotional material 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 …”
were false and misleading and consequently contravened the Australian Consumer Law (ACL). Further, the Court held that Reebok had no reasonable grounds for making the representations.
The advertisements promised that the shoes would strengthen hamstrings and calves by up to 11 per cent and tone the buttocks up to 28 per cent more than regular sneakers, just by walking.
Reebok claims the “balance ball inspired” shoes use pockets of air to “absorb energy”, create “microinstability” and “tone and strengthen key leg muscles while you walk”.
The ACCC Deputy Chair, Delia Rickard said:
“Where businesses claim their products have certain performance characteristics and benefits, they have a responsibility to ensure that those claims are accurate and supported by credible evidence. This is particularly important in cases such as this where it is difficult for consumers to independently verify the claims.”
The ACCC’s Proceedings
Reebok has imported and sold Reebok EasyTone shoes in Australia since December 2009. The ACCC’s proceedings related to the representations made by Reebok in connection with the sale and promotion of the EasyTone shoes from September 2011 to February 2013, when Reebok was aware that similar claims about the shoes were the subject of a settlement following enforcement action taken by the US Federal Trade Commission against Reebok International Ltd.
Ms Rickard said:
“The fact that these claims made about the alleged benefits of EasyTone shoes had come to the attention of regulators in other jurisdictions but still continued to be made in Australia by Reebok was of particular concern to the ACCC.”
The Federal Court Orders
The Federal Court made orders requiring Reebok to provide a refund of $35 per pair to consumers who purchased a pair of the Easy Tone shoes from September 2011 to February 2013 and who believe they suffered loss or damage as a result of Reebok’s representations. Reebok is required to establish a 1800 number by which consumers can contact Reebok, and to publish corrective notices with details of how consumers can seek redress.
The Court also made orders for implementation of a compliance program and costs.
Response from Reebok
A Reebok spokesman said it was:
“… happy to have resolved the ACCC’s inquiry over our historical EasyTone advertising so that we can return our focus to inspiring people everywhere to be their absolute best - physically, mentally and socially … At Reebok, our customers are our number one priority, and we will continue to deliver products that fitness athletes trust and love.”
TimeBase is an independent, privately owned Australian legal publisher specialising in the online delivery of accurate, comprehensive and innovative legislation research tools including LawOne and unique Point-in-Time Products.
Sources:
Reebok EasyTone claims false: ACCC
Reebok Australia to pay $350,000 for false and misleading representations – ACCC Release Number MR 259/14
