On November 19th, 2010, after a two month investigation, the
Competition Bureau announced it was starting court proceedings
against Rogers Communication Inc. for making misleading claims in
advertising Rogers' "Chatr" discount cell phone and
text service. The Competition Bureau also announced it would be
seeking the stiffest penalties available under law, including a $10
The Competition Bureau's investigation focused on the
Rogers' claim that subscribers to Rogers' "Chatr"
brand would experience "fewer dropped calls than new wireless
carriers" and have "no worries about dropped calls."
Any representation that could influence a consumer to buy or use
the advertised product or service is subject to the deceptive
marketing provisions (Part VII.1) of the Competition Act
(the "Act"), which was recently amended to
increase penalties for those found to have engaged in deceptive
marketing practices. After reviewing technical data the Bureau
found no discernable difference between Rogers'
"Chatr" and the new carriers, and launched court
In March 2009 amendments to the Act substantially
increased the penalties for deceptive advertising; raising the fine
for a corporation's first offence from $100,000 to $10 million.
In addition to the one-time monetary penalty, a corporation found
to have made a false or misleading representation in a material
respect may also be required to pay restitution to any affected
customers and/or post a notice to the public detailing the findings
against them. The Competition Bureau has announced it will be
seeking all of these remedies against Rogers, in addition to a
court order stopping the advertising campaign at issue and allowing
contract term/cancellation to any customer claiming the ad gave
them incentive to purchase a "Chatr" phone.
Deceptive marketing practices include a wide variety of
offences, such as: conducting a contest without fully and fairly
disclosing material facts that affect the chances of winning;
advertising products at a bargain price when they're not
reasonably available; making misleading or confusing environmental
claims; or making any other material misrepresentations which are
likely to influence a consumer's behaviour or purchasing
decision. Both private parties and the Commissioner of Competition
may apply to the court to seek a remedy for false or misleading
This time last year, TELUS Communications Company successfully
sought an injunction against Rogers preventing Rogers from using
the phrase "Canada's most reliable network" in its
advertising campaigns. When the B.C. Supreme Court considered the
general impression and literal meaning of Rogers' advertising
claim it found that there was a strong case to be made that Rogers
had breached section 52(1) of the Act, which prohibits
false or misleading advertising. This finding was upheld by the
B.C. Court of Appeal. Under section 36(1) of the Act, a party who
has suffered a loss or damage as a result of false or misleading
representations is able to sue to recover damages. Although there
was some question as to whether or not this provision included
injunctive relief, TELUS was able to use it to scuttle many aspects
of Rogers' 2009 holiday campaign.
How the Competition Act May Impact You
If you have a trade name, trade-mark, logo or any other
advertising claim related to your products, services or business,
you will be expected to comply with specific principles related to
the substantiation of advertising claims and marketing practices
contained in the Act. In addition to the Act,
there a number of other guidelines administered and enforced by the
Competition Bureau which are meant to provide assistance to
industry and advertisers in complying with the Act. This
includes the Environmental Claims: A Guide for Industry and
Advertisers which sets out the appropriate verification
and substantiation standards of any environmental claim made to the
public such as "green," "environmentally
friendly" or "recyclable;" and the recently revised
Enforcement Guidelines for "Product of Canada" and
"Made in Canada" Claims, which describe the
Competition Bureau's approach to assessing "Product of
Canada" and "Made in Canada" claims for non-food
products under the false or misleading representations provisions
of the Act.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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