Lorna Janes athleisure the cure for the spread of COVID19
21 September 2021
21 September 2021
In July 2020, Lorna Jane Pty Ltd launched a marketing campaign for a new line of athletic leggings called 'LJ Shield Activewear' that included the following types of claims:
These claims had been made through various mediums including email communications, in-store signage, on the Lorna Jane website and social media posts and in media releases.
In July 2020, the Therapeutic Goods Administration (TGA) determined that by promoting LJ Shield Activewear as "anti-virus activewear", Lorna Jane was representing that these products were therapeutic goods.
Since the advertising of therapeutic goods is subject to the regulations administered by the TGA, the TGA investigated Lorna Jane's marketing campaign and issued three infringement notices totalling $39,960 to Lorna Jane for the following contraventions:
We discussed the TGA's action in relation to COVID-related claims against numerous businesses, including Lorna Jane, in the October 2020 edition of Life Sciences Update.
In December 2020, the ACCC filed proceedings in the Federal Court alleging that the marketing claims set out above also constituted misleading or deceptive in contravention of the Australian Consumer Law by representing to consumers that LJ Shield Active protected wearers against lethal viruses, including COVID-19, when this was not the case.
Lorna Jane admitted it did not have any scientific testing results showing the effectiveness of LJ Shield Activewear on viruses nor did it have any scientific results or evidence which would establish the truth of the representations. It was also made clear that the claims had been approved and personally repeated by Lorna Jane’s director and chief creative officer.
The Court found all of Lorna Jane's representations to be misleading or deceptive, or likely to mislead or deceive consumers, and therefore in contravention of the Australian Consumer Law.
The penalty of $5 million agreed to by both parties was upheld by the Court.
Although Lorna Jane was not shown to have profited from its conduct, the Court described Lorna Jane's behaviour as "exploitative, predatory, and potentially dangerous" at a time when the concern for the consequences and fear of COVID-19 were deeply felt by the public.
In upholding the penalty, the Court noted that there was a need to impose a substantial penalty to reflect the seriousness of the conduct particularly given that the representations had emanated from a very high managerial level within the company and to demonstrate that exploitative conduct of this kind will not pay.
Authors: Helen Wei, Graduate; Maria Sun, Senior Associate; and Lisa Ritson, Partner.