Fine against NZME doubles after Commerce Commission appeals prohibited toy prosecution in High Court

A fine against NZME has been uplifted following an appeal in the High Court. Photo / NZME

NZME has been fined $195,000 after the Commerce Commission appealed an earlier sentence stemming from the company selling a prohibited toy.

Two magnets in the toy, known as a “buckyball”, were swallowed by an 11-year-old who then required surgery. The item was sold on Grabone, the “daily deals” site, owned by NZME at the time of the incident.

The puzzles contained small high-powered magnets, which are prohibited for sale in sets of two due to the safety risk they pose.

NZME Advisory Ltd faced charges under the Fair Trading Act, laid by the Commerce Commission in December last year. The company pleaded guilty in March, and was sentenced to a fine of $87,750 in the District Court in May.

The business falls under the ownership of the wider NZME company, which also publishes the Herald.

The Commerce Commission appealed the sentence in the High Court, alleging it was “manifestly inadequate”.

This week the court agreed, with Justice Peter Andrew saying in his judgment “it is difficult to conceive of a more serious case in terms of the impact of offending on a victim”.

The fine was increased to $195,000.

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

“Tragically, we are aware of one case in New Zealand where a child did swallow two of the magnets from one of the magnetic toys supplied by NZME, and significant surgery was required to remove them,” the commission’s general manager of fair trading Kirsten Mannix previously said.

In a statement today, NZME chief executive Michael Boggs said the company accepted the decision.

“We were horrified to hear about the situation involving the young girl and from the outset we took this matter extremely seriously, including immediately taking steps to recall the product.

“Last year I personally reached out to the girl’s mother to apologise, and to offer any assistance to help with her daughter’s recovery.”

He said a donation was made to Starship Hospital where the girl received treatment, and a support payment was made to her family.

Ethan Griffiths covers crime and justice stories nationwide for Open Justice. He joined NZME in 2020, previously working as a regional reporter in Whanganui and South Taranaki.