E-cigarette companies face fines

The Federal Court has ordered three online e-cigarette retailers to pay penalties for breaching the Australian Consumer Law (ACL). This is claimed to be the first time any regulator globally has successfully acted against false and misleading claims about the presence of carcinogens in e-cigarettes.

In separate proceedings against each of the companies, the court found The Joystick Company, Social-Lites and Elusion Australia (in liquidation) contravened the ACL by making representations that their products did not contain harmful carcinogens and toxins, when this was not the case.

The court also found that the directors of Joystick and Elusion, and the CEO of Social-Lites, were knowingly concerned in the contravening conduct of their respective companies.

Following admissions made by each of the companies and individuals and joint submissions on penalties, the court ordered that:

•    Joystick pay a pecuniary penalty of $50,000, and its director a penalty of $10,000.
•    Social-Lites pay a pecuniary penalty of $50,000, and its CEO a penalty of $10,000.
•    Elusion pay a pecuniary penalty of $40,000, and its director a penalty of $15,000.

ACCC Acting Chair Delia Rickard said consumers were led to believe that when using these e-cigarette products, they would not be exposed to the harmful chemicals found in ordinary cigarettes. In fact, they were exposed to the same chemicals, including a known carcinogen that has no safe level of exposure.

“Businesses must ensure that they provide accurate information to customers, and have a reasonable basis for making any representations,” Ms Rickard said “This is particularly important for products that may cause harm to the health of consumers.”

The ACCC has written to more than 30 Australian e-cigarette suppliers reminding them of their ACL obligations, to ensure information provided to consumers is accurate.

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