The ACCC has given us a timely reminder that the Australian Consumer Law reaches beyond Australian shores. If Australian companies engage in misleading or deceptive conduct or make false testimonials on the internet and those representations are therefore available overseas, those companies can still be injuncted in Australia and restrained from making further misleading or false representations.
The ACCC had previously taken action against Sensaslim Australia Pty Ltd (In Liquidation) (Sensaslim) and its directors to stop the parties promoting the sale of Sensaslim franchises and products both in Australia and overseas. On 31 August 2011, the Federal Court ordered that the interim injunction already in place against Sensaslim and its directors should remain in place to protect consumers in Australia but that it should be extended to ensure consumers are protected overseas.
Sensaslim was a company marketing and distributing an oral spray known as "Sensaslim Spray". The product purported to aid weight loss. The product was promoted by reference to a clinical trial that the Court found was never conducted and by reference to a specialist doctor's report on that clinical trial that was described by the Court as "bogus" 1. Other claims made by Sensaslim which the Court found to be misleading were claims that other franchisees were already participating in and profiting from Sensaslim franchises.
In providing reasons for his judgment, Yates J said the Australian Consumer Law applies to conduct outside Australia by an Australian citizen or a person ordinarily a resident within Australia where that conduct involves the use of postal, telegraphic or telephonic services or takes place in a radio or television broadcast.
Yates J also referred to previous Australian cases whereby "Australia has an interest in regulating the situation where Australians are cheated overseas or where a corporation incorporated within Australia carries out an act [in another country] that is contrary to Australian Law" 2
Yates J found that it was within the Court's power to stop individuals engaging in misleading conduct through utilising the internet as the internet involved telephonic services.
In an increasingly technologically reliant community, most businesses will promote their products and/or potential business opportunities through the internet. This case is a timely reminder to businesses that they need to ensure all website content is accurate and therefore does not mislead or deceive consumers to enter a transaction based on inaccurate or blatantly false information and that those representations can be stopped by the ACCC for the purpose of protecting both the Australian consumer and the overseas consumer.
Published: 17 October 2011
The assistance of Melissa Corbutt, Solicitor, of Addisons in the preparation of this article is noted and greatly appreciated
Footnotes
1Australian Competition and Consumer
Commission v Sensaslim Australia Pty Ltd (in Liquidation) (No 1)
[2011] FCA 1012
2World Play Services Pty Ltd v Australian Competition
and Consumer Commission (2005) 143 FCR 345
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.
