Australia: Misleading product promotion results in significant fines ordered by Federal Court of Australia

Alert - 31 July 2015
Last Updated: 5 August 2015
Article by Brett Bolton and Matthew Jeffrey

In ACCC v Reebok Australia Pty Ltd [2015] FCA 83, the Federal Court of Australia fined Reebok Australia the sum of $350,000 for false advertising in connection with the sale of footwear to Australian consumers. The company also consented to restraining orders, corrective advertising orders, and an order requiring it to pay $45,000 in legal costs to the ACCC. An unusual feature of the case was that it followed similar conduct in the USA by Reebok Australia's parent (Reebok International) which had been investigated and dealt with by the Federal Trade Commission (the US equivalent of the ACCC). Reebok Australia was aware of the US investigation and its outcome, but, in the Federal Court's view, was complacent in its implementation of the steps necessary to bring the false advertising to an end in Australia.

Here, Special Counsel Brett Bolton and Solicitor Matthew Jeffrey discuss the lessons to be drawn from this case by businesses when they advertise their goods and services for sale.

The Facts

  • Reebok Australia imported "EasyTone" footwear from Reebok International.
  • In September 2011, Reebok International settled with the Federal Trade Commission of the United States of America (FTC) for making unsubstantiated claims regarding the "EasyTone" footwear, including claims that the footwear improved muscle tone and strength. As part of the settlement, a judgment in favour of the FTC for US$25million for customer redress was entered against Reebok International.
  • Reebok International subsequently advised Reebok Australia to remove all promotional material for the "EasyTone" footwear in Australia. The promotional material included stickers, swing tags, information and information booklets that contained:
    • pictures of the lower body with illustration that stated "28% glutes, 11% thighs, 11% calves"; and
    • statements that "EasyTone" footwear would increase the strength and tone of legs, calves and buttocks.
  • However, Reebok Australia continued to supply "EasyTone" footwear containing that promotional material to retailers between September 2011 and February 2013.
  • On 29 August 2012 the ACCC contacted Reebok Australia and expressed concerns about its continued importation and supply to Australian retailers of the footwear containing the promotional material.
  • On 17 December 2013, the ACCC commenced proceedings in the Federal Court of Australia seeking, amongst other things, a declaration that Reebok Australia contravened the Australian Consumer Law.

The Decision

The court determined that Reebok Australia had made statements without reasonable grounds about the footwear that were likely to mislead or deceive customers. The basis for the court's determination included the following points:

  • Tests with comparative footwear showed that "EasyTone" footwear did not provide muscular increases by, or up to, the increases that the promotional material indicated.
  • Upon becoming aware of the settlement with the FTC, Reebok Australia made no attempts to conduct its own testing.
  • Reebok Australia made limited attempts to remove the misleading promotional material.
  • Reebok Australia did not have a competition and consumer law compliance program.
  • The senior management of Reebok Australia were all aware of the outcome of the FTC case and knew about the contraventions.
  • The court found that the damage suffered by consumers would be difficult to quantify, but accepted that consumers suffered a loss as a result of the misleading conduct.

Factors that worked in Reebok's favour included:

  • It cooperated with the ACCC and provided information and documents that were requested.
  • Reebok Australia's previous clean record.

Having regard to all the circumstances the court determined that Reebok Australia had been too complacent and that its attempts to remove the promotional material were not enough to avoid breaching the Australian Consumer Law. As a result, Reebok Australia:

  • was fined $350,000 and has to pay $45,000 towards the ACCC's costs;
  • is restrained for 3 years from supplying footwear which convey that use of the footwear will improve toning/or strengthening;
  • must establish a competition and consumer law compliance program;
  • must publish a corrective notice in The Australian newspaper and on its website; and
  • must establish a consumer redress process, including setting up an email address and 1800 telephone number, to enable consumers to obtain a refund on the EasyTone shoes.

The Reebok Australia case serves as a timely reminder that businesses must accurately promote their products to Australian consumers, and ensure that any statements or claims made in relation to the products are reasonable and justifiable. Businesses should also make every attempt to remove material that may mislead customers as soon as they become aware of it. Having in place an Australian Consumer Law compliance program can also minimise the risk of a breach of these laws.

© HopgoodGanim Lawyers

Award-winning law firm HopgoodGanim offers commercially-focused advice, coupled with reliable and responsive service, to clients throughout Australia and across international borders.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Brett Bolton
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.