TGA targets vaping advertisers in recent Federal Court filings

With flavours including bubble gum, cheesecake and tres leches, one could be forgiven for thinking you were looking at the menu of an up-market ice creamery or dessert bar, rather than the appendix to a Concise Statement itemising each of the individual counts of infringement the Therapeutic Goods Administration is alleging against two New South Wales-based nicotine vaping companies. However, the TGA has come out swinging, following its declaration that nicotine vaping products was one of its key advertising compliance priorities for FY23, filing 2 separate Federal Court cases in as many months.

You got a prescription for that Tropical Thunder Fruit Mix?

The TGA defines nicotine vaping products as being products that:

• contain nicotine (whether in the base or salt form) in solution; and
• are intended to be vaporised or inhaled using a vaping device (such as an e-cigarette or vape pen).

From 1 October 2021, consumers have required a prescription for all purchases of nicotine vaping products. It is illegal however for any Australian retailer other than an Australian pharmacy to sell nicotine vaping products, regardless of whether the consumer has a valid prescription. Vaping products which contain no nicotine and tobacco products are both subject to slightly different regulatory requirements than nicotine vaping products, as the TGA has recently explained.

From an advertising perspective, it is relevant to note that nicotine is contained in Schedule 4 of the Poisons Standard, which lists various substances that cannot be advertised directly to consumers, unless they also appear in Appendix H. Nicotine vaping products do not appear in Appendix H, meaning they cannot be advertised directly to consumers. Finally, the broad definition of "advertise" in the Therapeutic Goods Act captures any statement or pictorial representation of the goods that is intended to promote the use or supply of the goods and therefore includes any online purchasing portals on websites and social media pages.

Not all peaches and cream

The claims themselves, one against Prefixx Pty Ltd and its sole Director Brad Anthonisz and the other against Vapor Kings Pty Ltd and its sole Director Amir Kandakji, are very similar. Both allege that the companies have breached section 42DLB(1) of the Therapeutic Goods Act through:

• Advertising goods which are not listed on the ARTG; and
• Advertising which contains references to substances which are included in Schedule 4 of the Poisons Standard and not included in Appendix H.

In addition, the sole Director for each company is alleged to have either:

• caused or been directly involved in the contraventions of the companies; or
• aided, abetted, counselled or procured the contraventions on the part of the companies.

The advertising in question is said to constitute the website and social media controlled by the two companies and through which they offered for sale and otherwise advertised nicotine vaping products for delivery to Australian consumers. It is also worth noting that neither company's website or social media sales portals required verification of the purchaser's prescription.

A cool crush(ing) blow?

Not only is the TGA seeking declaratory (and in the case of Vapor Kings, injunctive) relief, but each originating application also includes a claim for pecuniary penalties. Given that the TGA is arguing that each day that each individual product was advertised as available amounts to an individual instance of infringement, the companies' choice to offer 160 products each for months, could result in significant penalties.

This is particularly likely given the statements made by the TGA in the respective Concise Statements about the harm that can be caused when nicotine is misused, particularly when the products in question have not been subjected to the regulatory controls that the TGA has in place for goods which are listed on the ARTG. The additional concerns about the advertisements being targeted to children and young people, as well as the concern that the use of nicotine vaping products may actually increase the number of people who use tobacco products also indicate the TGA will make an example of Prefixx and Vapor Kings to discourage others who might seek to advertise vaping products.