Tāmaki Makaurau – Australian skincare company Ego Pharmaceuticals has been fined $280,000 in the Auckland district court, after it made unsubstantiated claims about the sun protection factor (SPF) of two sunscreen products.
Commission chair Anna Rawlings says as new information about product testing became available to Ego it should have recognised that it did not have a reasonable basis to make the performance claims about some sunscreen products on the market.
Businesses have an obligation to ensure that representations can be substantiated, and this is an ongoing obligation. If new information comes to light which impacts on the claim being made, as it did in the Ego case, a business should revisit its product packaging and promotion.
In 2019 and 2020, Ego represented that two products, Ego Sunsense Ultra SPF 50+ and Ego Sunsense Sensitive Invisible SPF 50+ provided very high protection for consumers and were SPF50+ in accordance with an Australian and New Zealand standard for sunscreen products.
When the products were first released in New Zealand in 2016, Ego had reasonable grounds to make the SPF representations.
However, this stopped being the case from February 2019 due to an accumulation of adverse SPF results from various labs between 2017 and 2019, followed by fraud allegations in August 2019 about the testing facility it relied on.
While none of the harm to persons using the product or commercial competitors can be accurately quantified, its existence needs to be acknowledged in the sentence imposed.
The case highlights the importance of businesses having a proper basis for the claims they make about their products when they make them, and that they continue to do so.
The two Ego products have not been distributed in the New Zealand market since December 2019. Ego issued a withdrawal notice for the products in June 2020.
The commission encourages consumers with any concerns about their sunscreen products to contact the supplier or manufacturer in the first instance. If consumers feel a business has breached the Fair Trading Act, they can complain on the commission’s website here.
The Commerce Commission opened an investigation into Ego following Consumer NZ’s testing in 2019 and a subsequent complaint filed with the Commission.
