The consumer watchdog has chalked up a win against three e-cigarettes companies, with a court finding they misled customers about toxins in their products.
The Federal Court found online companies Joystick, Social-Lites and 'Elusion' all made e-cigarettes that contained carcinogens and toxins, despite advertising the products as safe.
The companies as well as two directors and one CEO have been ordered to pay penalties ranging from $10,000 to $50,000, totalling $175,000.
It is believed to be the first time a regulator anywhere in the world has successfully taken action for false and misleading claims about carcinogens in e-cigarettes.
"Consumers were lead to believe that these e-cigarettes didn't contain toxins or anything dangerous when in fact they contained things like formaldehyde and acrolein, which are known carcinogens," Australian Competition and Consumer Commission (ACCC) acting chair Delia Rickard said.
"Consumers were being exposed to carcinogens and toxic chemicals that could harm their health and they weren't being informed about the presence of these chemicals in the products."
Ms Rickard said the ACCC had written to over 30 e-cigarette suppliers to "remind them of their obligations under the law".
"So it is an area that we're watching closely," Ms Rickard said.
Joystick, Social-Lites and Elusion were the 'worst' of them
The ACCC has tested e-cigarettes from a number of different brands to find out the level of toxins in the products.
"Joystick, Social-Lites and Elusion were the worst of them, which is why we took action in these particular matters," Ms Rickard said.
"But we've put the whole sector on notice that it is not acceptable to mislead customers about the health and the contents of these products."
Formaldehyde is classified by the World Health Organisation International Agency for Cancer Research as a Group 1A carcinogen, meaning there is sufficient evidence to show it is carcinogenic to humans.
Acetaldehyde is classified as a Group 2B carcinogen by the IARC, which is classified as being possibly carcinogenic to humans.
The ACCC launched court action against Elusion and Social-Lites last year, and the action against Joystick was lodged when the company failed to pay infringement notices.
Social-Lites and Elusion have both published a corrective advertisement on their websites.
"In fact, when our e-cigarette products are used, the vapour produced for inhalation does contain carcinogens and toxic substances — including Acetaldehyde, Acetone, Acrolein and Formaldehyde," the Social-Lites website said.
"Those chemicals are carcinogens and toxic substances which are also found in tobacco cigarette smoke.
"Following Federal Court proceedings taken by the Australian Competition and Consumer Commission, the Court has found that the representations which we made on our website and on YouTube were false, misleading or deceptive in contravention of the Australian Consumer Law."
Joystick appears to no longer operate an Australian website.