Facts
ACCC proceedings
Comment


The Australian Competition and Consumer Commission (ACCC) recently commenced proceedings against Reebok for representations made in relation to a specific line of shoes.

Facts

In 2009 Reebok launched its line of EasyTone and RunTone shoes, to much fanfare. Reebok claimed that the shoes could strengthen and tone buttock muscles up to 28% more and hamstring and calf muscles up to 11% more than regular shoes. The shoes sold for approximately US$100 a pair, with sales at November 2010 estimated in the order of 15 million.

In 2011 the US Federal Trade Commission (FTC) investigated Reebok over its advertising claims. A settlement was swiftly reached between the FTC and Reebok, with the Adidas subsidiary paying US$25 million for its deceptive advertising. As part of the settlement, consumers were entitled to obtain refunds.

ACCC proceedings

On the back of the FTC action, the ACCC has now commenced proceedings against Reebok. It is not clear why it has taken the ACCC over four years to commence proceedings, considering that the FTC obtained a settlement with Reebok within two years of the product launch. The shoes have been available in Australia since 2009 and representations relating to their alleged strengthening and toning capabilities made throughout that time.

The allegations in the Australian proceedings refer to specific Reebok conduct from September 2011. The ACCC alleges that false, misleading or deceptive representations were made about EasyTone shoes. The particulars appear to be the same – that Reebok EasyTone shoes would increase the strength and muscle tone of calves, thighs and buttocks more than if a consumer were wearing a regular shoe, and that there was no reasonable basis to make such claims.

While the representations from September 2011 appear to be similar, if not identical to earlier representations made by Reebok, at a minimum the ACCC has taken two years (or otherwise over four years) to bring the matter before the courts. Reebok continued to sell thousands of EasyTone shoes during that period. Among other things, the ACCC is seeking non-party consumer redress (refunds for consumers who purchased the shoes).

Comment

Reebok is not the only company that has sold toning shoes. Skechers USA Inc has also sold a range of Kim Kardashian-endorsed toning shoes, including Shape Ups, Resistance Runners and Tone Ups. Skechers even ran advertisements for the shoes during the 2011 Superbowl. Subsequently, in 2011 the American Council on Exercise claimed that the shoes offered no measurable benefit compared with other athletic shoes.

There is no word yet as to whether the ACCC is also investigating Skechers or will be commencing similar proceedings.

For further information on this topic please contact Bill Fragos at Piper Alderman by telephone (+61 2 9253 9999), fax (+61 2 9253 9900) or email (bfragos@piperalderman.com.au). The Piper Alderman website can be accessed at www.piperalderman.com.au.