Hot on the heels of the ACCC’s successful case against Breast Check Pty Limited (reported in the March edition of CCN), the Federal Court in Western Australia has found that another breast imaging service provider engaged in misleading and deceptive conduct, as Partner, Anne Freeman, reports.

There were many similarities between the conduct of Safe Breast Imaging Pty Limited (SBI) and Breast Check.

SBI, in the period between April 2009 and August 2011, conducted breast imaging using a multi-frequency electrical impedance mammograph (MEM). The company promoted its business by:

  • Google AdWords.
  • A website.
  • A video published at various locations on the internet, including YouTube.
  • A double sided pamphlet.

The ACCC alleged that this promotional material conveyed the following representations which were false or misleading:

  • That breast imaging using MEM could provide an adequate scientific medical basis for assuring a customer that she does not have breast cancer.
  • That breast imaging using MEM could provide an adequate scientific medical basis for assessing whether a customer may be at risk of breast cancer.
  • That there was an adequate scientific medical basis for breast imaging using MEM as a substitute for mammography.
  • That Australian registered medical doctors were involved in (a) providing the breast imaging service, particularly in the interpretation of images, and (b) preparing breast health reports.

The sole director, shareholder and business manager of SBI, who was not a doctor, was alleged to have been knowingly concerned in or a party to SBI’s contravening conduct.

Like the Breast Check case, there was an issue about the class of the public to whom the representations were made. The respondents suggested that the target audience were informed women interested in breast health, who were aware of the limitation and dangers of mammography and would not or could not have mammograms, and actively sought out alternatives to mammograms. That was rejected by Justice Barker, who stated that the respondents could not control the range of people who might access the promotional materials and thus well-informed as well as the poorly educated consumer all needed to be considered.

This was particularly so because Google AdWords directed those simply searching for “breast cancer screening” to the SBI site.

The Court was satisfied that each of the representations were made, and, having regard to expert evidence led by the ACCC, found that they were false or misleading. There was insufficient evidence to support that the MEM can reliably identify persons at risk from having breast cancer, nor to accurately differentiate between those whose breasts are likely to contain breast cancer and those whose don’t. In contrast, there was evidence that mammography detects early-stage breast cancer.

The second respondent was responsible for publishing material on the SBI website, had approved, narrated and caused the video to be published and drafted and organised the distribution of the pamphlet. She also instigated the use of the Google AdWords advertising. Further, she told customers they would receive a report produced by a doctor, when they were not.

The Court found that the second respondent had no reason to believe there was a factual basis for the representations, and indeed that she had knowledge of the falsity of the fourth representation above. She was therefore found liable as an accessory for SBI’s contraventions.

The matter was adjourned for further submissions as to the appropriate relief. The ACCC is taking the serious step of seeking an order that the second respondent be disqualified from managing corporations.

The lessons to be learned from the conduct of the respondents in this case include:

  • Individuals and corporations should ensure promotional material is accurate, and there is a factual basis for all representations made.
  • If it is intended to market to a select class of the public, publishing of promotional material must be carefully planned. A broad range of Google AdWords search terms will naturally broaden the audience.
  • Those involved in the preparation of promotional material must be vigilant to ensure they are not aware of any evidence which may call into double the accuracy of the contents of that material.