Australian Competition and Consumer Commission v Reebok Australia Pty Ltd

The Australian Competition and Consumer Commission (ACCC) brought proceedings against Reebok Australia Pty Ltd in relation to the promotion and sale of EasyTone shoes, alleging misleading or deceptive conduct under the Australian Consumer Law (ACL). The dispute reached a settlement where the parties agreed on the penalty amount and sought various orders from the Court, including declarations, injunctive relief, a pecuniary penalty, redress for consumers, a compliance program, publication orders, and a contribution to the ACCC's costs.

The legal issues before the Court were whether the proposed orders were appropriate given the admitted contraventions and whether the pecuniary penalty was within the appropriate range. The Court examined the nature of the misleading representations concerning the nature, characteristics, and suitability of purpose of EasyTone shoes, and whether these representations were false or misleading. Additionally, the Court assessed the adequacy of the response by Reebok Australia to the Federal Trade Commission's (FTC) settlement and the appropriateness of the proposed non-punitive relief and compliance measures.

The Court found that the admitted conduct, which spanned approximately 18 months and involved supplying 16,448 pairs of EasyTone shoes across Australia, was deliberate and widespread. Reebok Australia had made specific claims regarding the toning and strengthening benefits of the shoes without reasonable grounds to support these claims. The Court accepted that the total pecuniary penalty of $350,000 was appropriate, considering the totality of the contraventions and the inadequacy of Reebok Australia's response to the FTC's settlement. The Court also approved the non-punitive relief for non-party consumers, the establishment of a compliance program, and the publication orders as suitable measures to address the contraventions and prevent future occurrences.

In conclusion, the Court granted the orders as requested by the parties, including injunctions preventing future misleading conduct, a pecuniary penalty of $350,000, a compliance program, corrective advertising, redress for affected consumers, and a contribution to the ACCC's costs. The detailed orders included specific requirements for the compliance program, the format and content of the corrective notices, and the process for consumer redress.