HealthEngine Fined $2.9 Million For Engaging in Misleading Conduct

Thursday 27 August 2020 @ 9.11 a.m. | Legal Research | Trade & Commerce

In ACCC v HealthEngine Pty Ltd [2020] FCA 1203 (20 August 2020), the Federal Court of Australia (“the court”) has, according to an Australian Competition and Consumer (“ACCC”) Media Release “ordered that HealthEngine Pty Ltd (‘HealthEngine’) pay $2.9 million in penalties for engaging in misleading conduct in relation to the sharing of patient personal information to private health insurance brokers and publishing misleading patient reviews and ratings.”

As noted in HealthEngine's Media Release, the court determined that the platform breached the Australian Consumer Law in its delivery of two historical services – the Practice Recognition System and private health insurance comparison services.

The Sydney Morning Herald reported that after the fine was handed down, HealthEngine co-founder and Chief Executive Marcus Tan issued an apology on the company's website, with Mr Tan saying:

“… the goal for the company now was to rebuild trust with both patients and practitioners. Our mission to enable better healthcare experiences and outcomes remains at the heart of everything we do.”

Background

In the ACCC Media Release, HealthEngine describes itself as “Australia’s largest online health marketplace, which is used by over a million consumers every month”.

The platform provides a booking system for patients and an online health care directory that lists over 70,000 health practices and practitioners in Australia. The directory allows patients to search for and book appointments with health practitioners. Up until June 2018, consumers could also access reviews from patients about the quality and services of health practitioners.

The ACCC began investigating HealthEngine in July 2018 and subsequently launched legal against the against online health booking platform, claiming that “between 31 March 2015 to 1 March 2018, HealthEngine manipulated the patient reviews it published, and misrepresented to consumers why HealthEngine did not publish a rating for some health practices”.

Findings of the Court

The court found that over five years, HealthEngine gave non-clinical personal information of more than 135,000 patients to third party private health insurance brokers without adequate disclosure - earning the company more than $1.8 million from its arrangements with private health insurers in that time period.

Yates J said at [para 22]:

“In the period 30 April 2014 to 30 June 2018, HealthEngine had arrangements with nine different private health Insurance Brokers for which it received fees for referring Patients to them. HealthEngine provided the Insurance Brokers with Patients’ non-clinical personal information. HealthEngine collected this non-clinical personal information each time a Patient booked an appointment with a Health Practice using the Platforms or a HealthEngine widget … HealthEngine accepts that this conduct was liable or likely to cause Patients to believe that HealthEngine provided the relevant services, when it did not and that it then provided non-clinical personal information from the relevant Patients to a third party”.

Comment and Reaction from the ACCC

Commenting on the penalties handed down, ACCC Chair Rod Sims said in a Media Release:

“These penalties and other orders should serve as an important reminder to all businesses that if they are not upfront with how they will use consumers’ data, they risk breaching the Australian Consumer Law. The ACCC is very concerned about the potential for consumer harm from the use or misuse of consumer data. The ACCC was particularly concerned about HealthEngine’s misleading conduct in connection with reviews it published, because patients may have visited medical practices based on manipulated reviews that did not accurately reflect other patients’ experiences.”

Comment from HealthEngine

HealthEngine also admitted that between 31 March 2015 and 1 March 2018, it did not publish around 17,000 reviews and edited around 3,000 reviews to remove negative aspects, or to embellish them. HealthEngine also admitted that it misrepresented to consumers the reasons why it did not publish a rating for some health or medical practices.

HealthEngine responded in a Media Release:

“Personal, not clinical, information was provided to private health insurance comparison services when consumers specifically requested a call regarding a health insurance comparison. We did not make it sufficiently clear on the booking form that a third party, not HealthEngine, would be contacting them regarding the comparison and that we would be passing on consumer details for that to occur. This was an error and HealthEngine apologises for it. HealthEngine is confident that no adverse health outcomes were created by these issues and no clinical data was shared with any private health insurance comparison service”.

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