Australia’s competition regulator has become the first in the world to successfully take legal action against e-cigarette companies for making false and misleading claims about the carcinogens in their products.
Federal court Justice John Gilmour ordered three online e-cigarette retailers – The Joystick Company Pty Ltd, Social-Lites Pty Ltd and Elusion Australia Ltd – and their individual CEOs and directors to pay penalties for breaching consumer law.
In separate proceedings the court found each of the companies had claimed their products did not contain harmful carcinogens and toxins, when this was not the case. It also found that the directors of Joystick and Elusion, and the CEO of Social-Lites, were knowingly involved in this deception.
Joystick and Social-Lites have been ordered to pay a penalty of $ 50,000, while the company heads have been ordered to pay $ 10,000. Elusion has been ordered to pay $ 40,000 and its director $ 15,000.
All three retailers admitted the conduct alleged by the ACCC and consented to the amounts of the penalties.
According to the case brought by the Australian Competition and Consumer Commission (ACCC), statements on the company websites led consumers to believe they would not be exposed to the harmful chemicals found in ordinary cigarettes.
However independent testing commissioned by the ACCC identified the presence of carcinogens and toxic chemicals, such as formaldehyde, acetaldehyde and acrolein in the products of Joystick, Social-Lites and Elusion, as well as acetone in Social-Lites’ products.
Formaldehyde is classified by the World Health Organisation International Agency for Research on Cancer as a Group 1A carcinogen, meaning it causes cancer, while acetaldehyde is classified as possibly carcinogenic. Acrolein is classified as a toxic chemical.
Dr Becky Freeman, a tobacco control researcher with the University of Sydney’s school of public health, said some consumers thought e-cigarette companies were “small artisan companies interested in improving health” when in fact most were owned by big tobacco.
Many advertisements for e-cigarettes and related products claimed they were less toxic and therefore less harmful than tobacco, she said. “But I’d challenge you to find something that isn’t less toxic than tobacco,” Freeman said. “We have no long-term data on e-cigarettes to show that they’ve help people quit for good or that they’re safe.”
The federal court ruling was “enormously significant”, said Simon Chapman, an emeritus professor of public health. He was aware that other complaints about e-cigarette advertising have been made to the ACCC. “These are by no means isolated examples,” Chapman said.
“Tobacco companies want to walk on both sides of the street. They try to argue that e-cigarettes are simply an ordinary consumer product and not a therapeutic device and therefore shouldn’t be subject to the same regulations, yet they often make statements that these things are excellent ways of quitting.”
He said it was “insulting to science” to claim the products were harmless or safe given the lack of evidence about long-term effects.
“Of course they don’t have all the products of combustion that tobacco products have, as they are vaporised and not burned. So while they’re likely to be less harmful, we do not yet know the magnitude of their harm, we just have no accurate way of estimating that yet,” said Chapman.
The ACCC’s acting chair, Delia Rickard, said businesses, including those online, must ensure they provide accurate information to customers and have a reasonable basis for making any claims. “This is particularly important for products that may cause harm to the health of consumers,” she said.
E-cigarette companies fined over false claims about toxic chemicals
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