Alkaline water, superfoods, açaí berries, nuts (of all kinds, including human), multivitamins, weight-loss teas, and the latest—anti-COVID-19 activewear. WHOOP WHOOP! As part of the Brew Basics series this week, we explore the world of misleading or deceptive conduct.
You might be feeling a little sorry for the poor avocado gracing the cover of this blog post. But you must agree that it plays an unfortunate and central starring role in the pseudo-scientific “wellness” industry.
A few years ago, a wellness influencer bragged in a public forum that they had made $30k in profit per month selling “weight-loss” tea. The audience gasped and exclaimed, “that’s wonderful!” Secondary considerations at that point were whether or not the tea actually did what it claimed, or the reality that such marketing often preys on the most vulnerable.
Then in 2018, “clean eating” hit peak crazy. Celebrities jumped on the last remaining bandwagons behind anything they could get their claws on. Even good ol’ H2O wasn’t left unscathed.
That was before COVID-19 hit and made toilet paper popular again. So where are the wellness influencers now? One journalist recently observed that:
“About a month ago some of the wellness podcasts and Instagram accounts I follow started to go decidedly off-piste.
Instead of recommending a retreat in Bali or new ways to cook with coconut oil, they were posting links about 5G, Bill Gates or more coded but no less strange messages….”
But not everyone went off the rails. For some, COVID-19 has become an opportunity.
Light bulbs and magic cloth
Earlier this year, celebrity chef Pete Evans decided to start selling a $14,990 light-emitting device as a COVID-19 treatment. It led to the Australian Therapeutic Goods Administration (TGA) issuing him with two infringement notices totalling $25,200 for alleged breaches of the Therapeutic Goods Act 1989 (Cth).
The light-emitting device is still available for sale at the time of writing, now with a disclaimer that it “is not a medical device, is not intended for use in the diagnosis of disease or other conditions, or in the cure, mitigation, treatment, or prevention of disease, in man or other animals.” (In other words, the most expensive light bulb ever offered for sale.)
This week, the TGA fined Lorna Jane $40,000 for “allegedly claiming, on its website, that its “anti-virus activewear” prevents and protects against infectious diseases, implying it is effective against COVID-19”.
What are these fines about?
“Under the Therapeutic Goods Act 1989 (Cth), any references to COVID-19 (and related terms) in the promotion of these types of goods are restricted representations. A restricted representation refers to a serious form of a disease, condition, ailment or defect. The use of restricted representations in advertisements for therapeutic goods is unlawful without a prior formal approval or permission from the TGA.
It is also a breach of the Therapeutic Goods Advertising Code (No. 2) 2018 to promote a therapeutic good as being safe, harmless or without side-effects.”
— from the Department of Health, Therapeutic Goods Administration website (accessed 19 July 2020).
On this note, you’ll find that many sellers of reusable masks are quite careful to state that their product does NOT prevent you from catching COVID-19—lest they fall foul of this law.
While both cases above specifically relate to breaches of the Therapeutic Goods Act 1989 (Cth), rather than a finding of misleading or deceptive conduct under the Australian Consumer Law, it opens up the opportunity for discussion about the latter in the context of the “wellness” industry.
The famous section 18
Section 18(1) of Schedule 2 to the Competition and Consumer Act 2010 (Cth) (also known as the Australian Consumer Law) states that:
“A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.”
There is a lot to unpack here in a deceptively simple sentence.
The main thing to remember is that “a person” includes natural persons or corporations, and that they must be acting in the course of trade or commerce. Whether one is acting in the course of “trade or commerce” is something that has been the subject of numerous court battles, but is usually obvious in most cases.
Finally, the last part of the sentence tells us that you can get into a sticky patch if you engage in conduct that is in fact misleading or deceptive OR conduct that is likely to mislead or deceive. Confused? The whole point is to prevent a business from arguing that any poor sod should have known better.
Section 18 is a familiar friend to anyone in litigation. Almost like a chocolate topping that goes on a mud cake, section 18 is a claim that is almost always guaranteed to be in the statement of claim in a commercial litigation matter.
Didn’t like the other party? Section 18. Think they might have done something dodgy, even though it’s not really clear what they did? Section 18. The point is, section 18 is a claim that is often trotted out as a just-in-case-all-else-fails, but is often unsuccessful.
This is because, as between private parties, you must show that you actually suffered loss to succeed. Section 236(1) of the Australian Consumer Law tells us that:
So even if you were misled, but didn’t suffer any loss, then you’re not entitled to receive any money for your troubles (also known as damages). In the context of a weight-loss tea that didn’t result in any lost weight, the prohibitive cost of going to court to claim the cost of your tea would never quite work out.
In the end, a lot of this boils down to enforcement by the Federal regulator, the Australian Competition and Consumer Commission (ACCC), who can take action even if no one has suffered any loss or damage. But so far, the theme of enforcement appears to be telcos over tea.
In the meantime, the “wellness” industry continues to skate along the knife’s edge through the use of tacky disclaimers (p.s. it’s ultimately what you do, it’s not the tea!), while hoping that no one will ever come after them.
- Arwa Mahdawi, “Is alkaline water a miracle cure – or BS? The science is in” (The Guardian, 29 October 2018).
- Brigid Delaney, ‘Evil forces’: how Covid-19 paranoia united the wellness industry and rightwing conspiracy theorists” (The Guardian, 8 June 2020).
- Australian Therapeutic Goods Administration, “Pete Evans’ company fined for alleged COVID-19 advertising breaches” (24 April 2020).
- Australian Therapeutic Goods Administration, “Lorna Jane fined almost $40,000 for alleged advertising breaches in relation to COVID-19 and ‘anti-virus activewear'” (17 July 2020).
- Finally, for a scientific but humorous take on the wellness industry, its diets and fads, check out Gene Eating (2018) by Giles Yeo, a geneticist from the University of Cambridge.