How Lorna Janes’ ‘Anti-Virus Activewear’ Could Be in Breach of Australian Consumer Law
Under Australian Consumer Law, it is unlawful for a business to make claims or representations that are likely to create a false impression as to the price, quality or value of a product or service.
Recently, the Australian Competition and Consumer Commission (ACCC) instituted proceedings in the Federal Court against active wear brand Lorna Jane. The claims arise out of the promotion of a range of active wear claiming to eliminate and stop the spread of COVID-19.
In this article, we look at the conduct which gave rise to such an allegation and what the court will consider when deciding whether the company’s actions were, indeed, unlawful.
The ‘Anti-virus Activewear’
In July of this year, Lorna Jane released a line of ‘Anti-virus Activewear’, which was sprayed with the substance, ‘LJ Shield’, to provide protection against viruses and pathogens such as COVID-19.
Advertisements were made in stores, on their website, and the social media of both the brand and company director Lorna Jane Clarkson which included:
“Cure for the Spread of COVID-19? Lorna Jane Thinks So.”
“With Lorna Jane Shield on our garments it meant that we were completely eliminating the possibility of spreading any deadly viruses.”
“LJ Shield – Protecting you with ANTI-VIRUS ACTIVEWEAR”.
The ACCC alleges that there was no scientific evidence or technological basis for these claims, having conducted no testing at the time they were made. In doing so, the ACCC believes the brand and Lorna Jane Clarkson gave the impression that the claims were supported in evidence.
After the company received a $39,960 infringement penalty from the Therapeutic Goods Administration, they re-branding as being ‘anti-bacterial’.
Although most of the claims were removed in mid-July, claims that the clothing permanently protected wearers against pathogens remained on garment tags until November of this year.
Misleading and deceptive conduct
Section 18 of the Competition and Consumer Act 2010 (Cth) regulates the misleading or deceptive conduct.
As per this section, the ACCC will need to demonstrate the following:
- The conduct occurred in the course of ‘trade or commerce’
This refers to transactions between corporations and consumers and includes anyone acquiring goods or services and any business or professional conduct whether or not carried on for profit.
- The conduct is misleading or deceptive or is likely to mislead or deceive.
For conduct to be considered misleading or deceptive or likely to mislead or deceive, there needs to be a “real and not remote” chance with the conduct considered as a whole and in context. Confusion or questioning will not meet this threshold.
There must also be a sufficient nexus between the conduct and an error in the misconception on the part of the other person.
As the conduct in this current circumstance was directed to the public through online advertisements, the ACCC will need to identify the class of consumers affected by the conduct with the court to assess whether an ordinary or reasonable member of that class would likely to be misled or deceived.
Some examples of misleading of deceptive claims and conduct listed on the NSW Fair Trading website include:
- silence or failure to disclose
- fake reviews and testimonials
- unfounded predictions and promises
- wild exaggeration and vague claims
- offering rebates, prizes and other free items without providing them
- bait advertising
- misleading or altered guarantees, conditions and warranties
- relying on disclaimers and fine print
- misleading conduct as to the nature of goods and services
- false representation about employment and business activities
- wrongly accepting payments for goods or services
What this means
With the ACCC seeking declarations, penalties, injunctions, corrective notices and an order to implement a compliance program, it is clear the watchdog intends to crackdown on companies seeking to take advantage of claims made during the pandemic.
It is important businesses are aware of their obligations under Australian Consumer Law and effectively comply with them.