You can’t Wiggle out of compliance - why Australian product standards matter

The Wiggles recently acknowledged a ‘likely’ breach of the Australian Consumer Law (ACL) concerning one of their popular products, the yellow-and-black Emma Bow headband with flashing lights. This product was sold for nearly two years without the mandatory safety warnings required for items containing button batteries. This incident highlights the importance of mandatory product standards in protecting consumers and ensuring that products in the Australian market meet minimum safety, quality, and performance requirements.

Before launching a product into the Australian market, care should be taken by the product brand owner and supplier to ensure that the products are safe and comply with any applicable mandatory product standards.

This article explores the purpose and importance of mandatory product standards, provides examples of such standards in Australia, examines the role of regulatory bodies like the Australian Competition and Consumer Commission (ACCC), and outlines the consequences of non-compliance.

Purpose of Mandatory Product Standards

Mandatory product standards aim to ensure that products supplied to consumers meet specific safety, quality, and performance benchmarks. These standards are established under the ACL, which is part of the Competition and Consumer Act 2010 (Cth). They address risks associated with products, that could cause injury, illness, or death if not manufactured or used correctly.

Unlike voluntary standards, which are developed by industry bodies and are not legally enforceable, mandatory standards are a legal requirement. Compliance ensures that all businesses adhere to the same minimum requirements, creating a level playing field and reducing risks to consumers.

Importance of Mandatory Product Standards

Mandatory product standards are crucial for several reasons:

• Public health and safety: These standards protect public health and safety by reducing risks posed by unsafe products. For example, children’s toys and electrical appliances must meet specific design and labelling requirements to minimise hazards.

• Consumer confidence: When consumers purchase products, they expect them to be safe and fit for purpose. By ensuring that products meet minimum standards, regulatory authorities help to build trust between consumers and businesses.

• Fair competition: Mandatory standards ensure all businesses are subject to the same requirements, preventing unfair advantages gained by cutting corners on safety or quality.

Examples of Mandatory Product Standards in Australia

Australia has a range of mandatory product standards developed in response to identified risks. These standards are regularly reviewed to ensure their relevance and effectiveness. Examples include:

• Children's Toys: Toys for children under the age of three must meet strict safety requirements to prevent choking hazards, such as prohibiting small detachable parts.

• Button Batteries: These standards collectively address the design, packaging, testing, and labelling of button batteries and products containing them, with the aim of preventing accidental access by children and ensuring consumer safety.

• Bunk Beds: Design and construction standards for bunk beds aim to prevent injuries like falls or entrapment, requiring features such as guardrails and small gaps between components.

• Prams and Strollers: These products must meet safety standards to ensure they are stable, durable, and equipped with appropriate safety features, such as harnesses and brakes.

• Cigarette Lighters: Disposable and novelty lighters must meet child-resistance requirements to reduce the risk of accidental fires caused by children.

• Electrical Goods: Certain electrical products, such as power boards and extension cords, must meet safety standards to prevent electrical shocks, fires, or other hazards.

These examples demonstrate the broad scope of mandatory product standards and their focus on consumer protection.

Role of Regulatory Bodies

The Australian Competition and Consumer Commission (ACCC) plays a central role in the development, enforcement, and monitoring of mandatory product standards. Its responsibilities include market surveillance, investigating complaints, and taking enforcement action against non-compliant businesses. The ACCC can issue infringement notices, seek court-imposed penalties, and order product recalls. State and territory consumer protection agencies also collaborate with the ACCC to ensure businesses comply with legal obligations and protect consumers from unsafe products.

Consequences of Non-Compliance

Non-compliance with mandatory product standards can have serious consequences for businesses, including:

• Legal Consequences: Supplying goods that do not comply with mandatory standards is a breach of the law. Businesses found to be in breach may face significant penalties, including fines and court orders. For example, the maximum penalty for a corporation is $10 million, three times the value of the benefit obtained from the breach, or 10% of the annual turnover of the company, whichever is greater. For individuals, the maximum penalty is $500,000.
  
  In The Wiggles case, while no fines were imposed, The Wiggles gave a series of enforceable undertakings, including to conduct a product recall and to produce and release an episode of its podcast ‘WiggleTalk – A Podcast For Parents’ relating to button battery safety.

• Financial Consequences: In addition to fines, businesses may face other financial costs associated with non-compliance, such as the cost of recalling unsafe products, compensating affected consumers, and addressing legal claims. These costs can significantly impact financial viability.
  
  While The Wiggles were not penalised with a fine, it not doubt incurred significant cost in conducting the product recall and addressing the claims made by the ACCC.

• Reputational Consequences: Non-compliance can also damage a business's reputation, leading to a loss of consumer trust and a decline in sales. In today's digital age, news of unsafe products can spread quickly through social media and online reviews further amplifying the negative impact on a business's reputation.
  
  It remains to be seen how the Emma Bow incident will impact on The Wiggles reputation. While there will no doubt be some negative impact, the fact that The Wiggles are to release a podcast to raise awareness about the importance of button battery safety is a positive.

• Product Recalls: One of the most visible consequences of non-compliance is the recall of unsafe products. Product recalls can be costly and logistically challenging, requiring businesses to remove products from shelves, notify consumers, and provide refunds or replacements. The ACCC maintains a public database of product recalls, which can further impact a business's reputation.
  
  The Wiggles, together with CA Australia Pty Ltd who is the manufacturer of the product, have recalled the product. This involves placing notices on The Wiggles website, the ACCC website, and the dedicated Product Safety website.

Conclusion

Mandatory product standards are a cornerstone of consumer protection in Australia. By establishing minimum safety, quality, and performance requirements, these standards prevent harm, promote consumer confidence, and ensure fair competition. Regulatory bodies like the ACCC play a vital role in enforcing these standards and holding businesses accountable for non-compliance – as demonstrated in The Wiggles case.

For businesses, adhering to mandatory product standards is especially important when launching a product into the Australian market – while the product might meet standards in the jurisdiction where it is made, care needs to be taken to ensure it also meets the standards in Australia. Compliance with the mandatory product standards is not only a legal obligation but also essential for maintaining consumer trust, ensuring consumer safety and avoiding the significant consequences of non-compliance.

If you’d like to know more about the mandatory product standards - whether you are launching a product into the Australian market or just want to check compliance of your existing products – contact our team.

Author: Michael Cossetto

This publication is intended as a source of information only. No reader should act on any matter without first obtaining professional advice.