If you’ve ever bought something that wasn’t quite what it seemed, then this story’s for you! The ABC Online was today reporting that the Federal Court of Australia has ordered global sportswear giant Reebok to pay a large fine and re-imburse those who bought their ‘EasyTone’ shoes.
The Australian Competition and Consumer Commission brought the issue to Court after it was revealed that Reebok was marketing and advertising the shoes in a misleading way. The company claimed that the new shoes increased muscle mass in the user’s legs and thighs, a claim which was rebuked by some as being completely misleading. Indeed, the Court found that the shoes were actually no different to others available on the retail market.
The decision re-iterates the point of view that a company or corporate entity must have reasonable grounds to believe that their product is indeed the way they present it. If the company fundamentally misrepresents a product to the public (and is actually aware of its real shortcomings) then the Court can find fault and levy a significant fine.
Speaking to these issues, the ACCC’s deputy chair Delia Rickard released a press statement outlining the principle of the matter. “Where businesses claim their products have certain performance characteristics and benefits, they have a responsibility to ensure that those claims are accurate and supported by credible evidence. This is particularly important in cases such as this where it is difficult for consumers to independently verify the claims.”
Reebok, which is currently owned by Adidas, is a multi million dollar company with annual revenues that far outweigh the fine. Because of the company’s heft, they have cordially agreed to pay the fine and refunds of $35 to customers who bought the shoes and suffered loss or damage as a result of the fantastic claims. In the end, the matter will not likely dent their bottom dollar.
The Australian public can rest assured that their interests are being protected by an ever watchful ACCC, but this doesn’t alter the reality of capitalism: nothing is as it seems. As always, caveat emptor!
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