ComCom Files Appeal, Argues NZME Fine “manifestly Inadequate”

The Commerce Commission has filed an appeal in the Auckland High Court against the sentence imposed on NZME Advisory Limited (NZME) last month for its offending under product safety laws, when it supplied magnetic puzzle toys through its previously owned online store GrabOne.co.nz.

Commerce Commission Chair, John Small, says the Commission originally submitted that an end sentence of $140,000 - $168,000 was appropriate (after discounts for mitigating factors), and is appealing the $87,750 sentence handed down in May 2023. The Commission will argue the fine imposed is manifestly inadequate.

Dr Small says product safety cases are about protecting consumers from potentially dangerous, harmful products.

“The fines imposed on breaches therefore must be significant enough to deter businesses from similar conduct and encourage them to put the processes in place to ensure they comply with their obligations.”

The magnetic toys supplied were made up of small, high-powered magnetic balls. They were supplied in-breach of an unsafe goods notice which prohibits the supply of any magnets, sold in sets of two or more, that are a particular size and strength.

The ban exists because if more than one of the magnets are swallowed, they can attract to each other within the body which is extremely dangerous.

Unfortunately in this case, a child swallowed two magnets from one of the magnetic toys supplied by NZME and significant surgery was required to remove them.

NZME sold 213 of the magnetic toys between October 2020 and September 2021. After being contacted by the Commission, NZME recalled the sets and contacted customers to notify them of the recall.

Under the Fair Trading Act, there are safety standards and unsafe goods notices in place which apply to various products, including toys, bikes, and small high-powered magnets. Businesses must ensure that the products they sell meet the relevant requirements before they are supplied.

As this matter is now before the Court, the Commission will not be commenting further at this time.

Background
NZME Advisory Limited was sentenced in the Auckland District Court on 25 May 2023 for breaching product safety laws when supplying unsafe magnetic puzzle toys, commonly known as buckyballs.

Read more information here: https://comcom.govt.nz/news-and-media/media-releases/2023/nzme-fined-for-selling-dangerous-magnetic-toys

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