This post was written by Neil Francey, Research Affiliate, Sydney Health Law
In an article in The Conversation, “Sex and lies are used to sell vapes online. Even we were surprised at the marketing tactics we found”, published on 6 March 2023, Curtain University Professor Jonine Jancey notes that e-cigarettes are not harmless; they contain hundreds of chemicals, many of which are toxic with risks including addiction, poisoning, seizures, burns and lung damage.
She also summarises findings of research by her and colleagues in a paper entitled “They’re sleek, stylish and sexy:” selling e-cigarettes online, published in the Australian and New Zealand Journal of Public Health (Vol 47, issue 1, February 2023), in which they concluded: “health and cessation e-cigarette marketing claims were outlandish and unsubstantiated”.
This blog considers whether the marketing claims and strategies identified in the research by Jancey and colleagues may constitute contraventions of the Australian Consumer Law. The Australian Consumer Law is administered by the Australian Competition and Consumer Commission (ACCC) and is found in Schedule 2 of the Competition and Consumer Act 2010 (Cth).
Background
Australian Consumer Law
The Australian Consumer Law contains the following provisions:
- Section 29 creates an offence for making false or misleading representations about goods or services, punishable under ACL s. 224 by – for a body corporate of $50M and – for an individual $2.5M.
- Section 18 prohibits conduct that is misleading or deceptive, which can result in an injunction under section under ACL s. 232.
- Section 20-22 prohibits conduct that is, “in all the circumstances, unconscionable” which also can result in an injunction under section under ACL s. 232, and also fines under ACL s. 224.
Section 21 states that “a person must not, in trade or commerce, in connection with the supply or possible supply of goods or services to a person or the acquisition or possible acquisition of goods or services from a person engage in conduct that is, in all the circumstances, unconscionable”. A court will first address the matter under s. 21, taking account of the factors set out in s.22. If the conduct is not caught under the prohibitions of s. 21 then the court may look to s. 20 to determine the matter under the common law principles.
Furthermore, s. 4 of the ACL makes special provision with respect to misleading representations about future matters and provides that such representations will be misleading if the maker of the statement does not have reasonable grounds for making their claim. Section 4 would apply directly to many of the claims identified by Jancey and colleagues’, since vaping is in its juvenile stages and the full extent of harm from vaping is not yet known.
Therapeutic Goods Administration (TGA)
Currently, regulation of e-cigarettes containing nicotine is primarily by the Therapeutic Goods Administration (TGA) as nicotine is listed in the Therapeutic Goods (Poisons Standard—February 2023) Instrument 2023. While not approved as a registered therapeutic good, nicotine vaping products may be imported by or sold by pharmacists in Australia to those with a prescription, provided that they conform with the Therapeutic Goods (Standard for Nicotine Vaping Products) (TGO 110) Order 2021 (TGO 110).
State and Territory Laws
E-cigarettes that do not contain nicotine may be sold in all states and territories except Western Australia, but state and territory legislation precludes them from being sold to minors, and in some states may only be sold by licensed retailers. This is not the only lack of uniformity in relevant state and territory legislation. And despite patchy state and territory “crackdowns”, the availability of e-cigarettes online and in convenience stores (which is where minors mainly get their vapes) is out of control.
Counterfeit Medicines
E-cigarettes are being deceptively marketed as “not containing nicotine” when laboratory tests show that many, if not most, do. Testing of vaping products has indicted that nicotine is commonly found in products that are labelled as “non-nicotine” or that have no indication of nicotine content.
The TGA categorises products that contain nicotine but fail to disclose nicotine content as “counterfeit medicines“, and has undertaken across Australia several prosecutions of retailers selling such products.
Analysis
Marketing Strategies
Most online retailers offered price discounts and/or free delivery and some employed loyalty programs for customers to earn points, which could be redeemed for discounts and other rewards. Additionally, some retailers provided warranties for their products, ranging from seven days to three months.
ACL Implications: While marketing strategies of this kind are not unusual, they make it easy for youth to access vapes, particularly when available with “loss-leaders” such as cheap soft drink, chips, candy, coffee and lollies. These are all circumstances which a court may take into account in deciding in any particular case the conduct is unconscionable in contravention of ACL s. 21.
Retailers were linked to social media platforms: Facebook, Instagram, Twitter, YouTube and others (e.g. Pinterest, LinkedIn and Snapchat).
ACL Implications: Again, while these links are commonplace they are particularly accessed by youth and again marketing tactics on these media may make a court more likely to conclude that the retailer’s conduct is – in all the circumstance – unconscionable in contravention of ACL s. 21.
Age Verification
Fifty per cent of Australian retailers had some form of age verification method before entry to the retailers’ site could occur. The age verification methods were a pop-up or dialogue box that required the user to verify they were aged at least 18-years (by clicking on ‘yes’).
In comparison, New Zealand sites required further verification of age when attempting to purchase a product using a check box option, while one site required verification via a formalised ID process (e.g. driver’s license, passport) to complete the purchase.
ACL Implications: Clearly e-cigarette vendors in Australia are less rigorous compared with New Zealand in checking the age of the person to whom e-cigarettes are being sold. This may contravene state laws and be another factor a court may take into account in deciding if conduct is – in all the circumstance – unconscionable in contravention of ACL s. 21.
Payment Methods
The main delivery methods were DHL Express & Australia Post.
ACL Implications: Likewise, these common methods of delivery also facilitate use the purchase of e-cigarettes by youth and are another factor a court may take into account in deciding if conduct is – in all the circumstance – unconscionable in contravention of ACL s. 21.
Marketing Claims
+Health related
Health related claims were the most frequently occurring. Health claims included: e-cigarettes being less harmful than tobacco cigarettes, e-cigarettes being free of toxic chemicals, and e-cigarettes not causing disease. Several retail websites claimed e-cigarettes were less harmful than tobacco products. Others contained statements that e-cigarettes were free from toxins, such as carcinogens or tar:
‘There is no tar or carbon monoxide in vapour, and if you are vaping high quality tested liquids, then you can be puffing on ZERO carcinogens’.
ACL Implications: Given what is known about the hundreds of chemicals in e-cigarette aerosol and the harm they cause, these claims are deceptively misleading in contravention of ACL s. 18, and the claims that e-cigarettes are free of toxic chemicals and have no carcinogens or tar are plainly false in contravention of ACL s. 29.
In the past, the ACCC has taken enforcement action against businesses marketing e-cigarettes that made representations that their products did not contain harmful carcinogens and toxins, when this was not the case.
Another site referred to a journal article that identified e-cigarettes could improve health and the ability of smokers to exercise.
ACL Implications: These claims warrant investigation to determine whether they are false in contravention of ACL s .29, misleading in contravention of s. 18 or unconscionable in contravention of s. 21.
+Cessation related claims:
Claims about smoking cessation were frequent. Several online retailers presented claims regarding the success rate for quitting smoking:
‘Results published in The American Journal of Preventative Medicine showed that after 6 months, 31 per cent of e-cig users did not go back to smoking traditional cigarettes’.
Moreover, other online retailers made comparisons to other nicotine replacement therapies:
‘E-cigarettes are a more effective tool for helping smokers quit than nicotine replacement therapies, including patches and gum’.
ACL Implications: Anecdotally useful for some, the evidence is limited and suggestive of only modest usefulness of e-cigarettes in aiding quitting. Thus these claims also warrant investigation to determine whether it is false in contravention of ACL s. 29, misleading in contravention of s.18 or unconscionable in contravention of s. 21.
+Cleaner than smoking
Retailers claimed e-cigarettes were cleaner than cigarettes. Statements included no smoke, no ash, no smell, no stained teeth, fingernails, fingers and only vapour:
‘Just like other (less advanced) e-cigarettes, they contain no tar, ash, tobacco, flame, carbon monoxide, smoke, or the offensively foul odours they produce’ ‘Vapour from vape liquids on the other hand is closer to that of steam than smoke. There is no tar or carbon monoxide in vapour‘.
ACL Implications: These clams should be prosecuted under ACL s. 29 for being false or misleading. They are similar to claims which resulted in court action by the ACCC for marketing e-cigarettes representing that products did not contain harmful carcinogens and toxins, when this was not the case.
+Cost benefit
Some online retailers stated that e-cigarettes were cheaper than tobacco products:”:
‘On average, vaping is way less expensive than maintaining a daily cigarette habit’.
ACL Implications: Whilst it is true that e-cigarettes are cheaper than regular cigarettes, it is the very affordability of vapes that put them in the budget-range of teens and sub-teens and therefore that is all part of the unconscionable marketing potentially in contravention of ACL s. 21.
+Ability to vape anywhere
Several retailers made statements relating to the ability to vape anywhere, including smoke-free environments (e.g. bars, offices and restaurants) and in response to smoke-free policies:
‘They [e-cigarettes] are not at all traditional cigarettes, you’ll be able to vape in most places prohibited to smokers’.
ACL Implications: This representation is plainly false: vaping is NOT permitted on aircraft in Australia, and in most States and Territories vaping is NOT permitted where smoking is prohibited.
+Environmentally friendly
Some online retailers claimed that their products were environmentally friendly, produced less waste or had natural (organic) ingredients. The retailers employed pictorial representations, including green leaves, trees, and recycling logos.
A 13 March 2023 report in The Guardian observed there was: “hazardous waste from e-cigarettes as vaping becomes more popular” and “Some local councils including the City of Sydney accept vapes in their e-waste collections, but many do not due to concerns about potential leaching of battery acid, lithium and nicotine”. It also reported federal environment minister Tanya Plibersek, who said:
‘Every vape that goes into landfill dumps plastic, poisons, nicotine salts, heavy metals, lead, mercury, and flammable lithium-ion batteries into the environment that can take hundreds of years to degrade’ and ‘The batteries can start fires in landfill and they are next to impossible to recycle because the plastic contains poison’.
ACL Implications: This suggests that the overall impression created is misleading and deceptive, in contravention of ACL s. 18. Claims that vapes are environmentally friendly also form part of the overall context that could make these claims unconscionable in contravention of ACL s. 21.
+Social status/modern technology
Statements were also made that e-cigarettes are stylish, cool and can increase social acceptability:
‘Not only do they [e-cigarettes] look sleek, but they are also stylish. As vaping is more socially acceptable than smoking’
‘Some people vape because it’s sexy’.
Other retailers described their products as advanced, futuristic, and revolutionary:
‘Creative design, advanced technology, Infinix will bring you infinite pleasure. Innovation keeps changing the vaping experience!’.
ACL Implications: The world’s major Western tobacco companies spent decades trying to improve the “social acceptability” of smoking and it seems that this marketing strategy is now being deployed in the context of vaping. Worse, the design of e-cigarettes is calculated to appeal to youth. These are yet more factors that a court may take into account in deciding that the conduct is in all the circumstances unconscionable in contravention of ACL s. 21.
+Second-hand smoke
In addition, claims that e-cigarettes do not expose people to second-hand smoke were present on Australian retailer websites:
‘Using e-cigarette, you can smoke without offending others with second-hand smoke’.
ACL Implications: Whilst exhaled vapours from e-cigarettes may not be as offensive as secondhand smoke this claim creates the misleading impression that you can vape without the risk of harm to others when that has not been scientifically established. And, given the increases in particulate matter that have been established in several studies, it is plausible that exhaled vapours are harmful to others nearby. Therefore this claim is arguably misleading and deceptive in contravention of ACL s. 18.
Conclusion
Speaking on ABC Radio National about the vaping epidemic, federal health minister Mark Butlers said:
- ‘… it is a very serious public health issue … Vaping is in and of itself is dangerous. It is bad for your health to be ingesting that many chemicals into your lungs. We know it causes substantial damage to your lungs.’
- ‘… this industry is so shamelessly marketing to children. I mean products with pink unicorns on them, bubble-gum flavour and such like … it is causing very real harm to our children right now.’
- ‘The Victorian poisons hotline … has reported that in the last twelve moths more than 50 children under the age of four have had to be reported to that hotline because of the dangerous ingestion of nicotine … this is now the biggest behavioural issue in primary schools …’
- ‘… this is an industry shamelessly marketing not just to teenagers but to young children. When you look at these things with pink unicorns on them and bubble-gum flavours, these are not marketed to adults … this is an industry that is trying to create a new generation of nicotine addicts …’
Minister Butler’s observations encapsulate the very essence of unconscionable conduct in the way the Full Federal Court has defined this phrase:
“‘Unconscionable conduct’, on its ordinary and natural interpretation, means doing what should not be done in good conscience. In a case … as in the present case, and the conduct is systematically and directly focused on vulnerable but unnamed [persons] … such conduct can reasonably be described as being against good conscience.”
But, while the statements, representations and conduct analysed above have implications for contravention of the ACL, and the ACCC should urgently consider enforcement action, the practicability of secureing compliance with the law is another matter.
Prosecuting false representations, and seeking injunctions to restrain misleading statements and unconscionable conduct can only be on a case by case basis. It can’t be done on an industry-wide basis.
The task is formidable, and can only succeed if there is coherence between federal and State laws, with both federal regulators (Customs, TGA, ACCC) and State/ Territory public health departments enforcing e-cigarette controls.
Even then it is a task likely too great to contain the spread of vaping, smoking’s “evil little offspring”.
Sydney Health Law 
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