The Competition Bureau recently announced that Bell Canada had,
in a consent agreement filed with the Competition Tribunal, agreed
to stop making what the Bureau had concluded were misleading
representations about the prices offered for some of Bell
Canada's services. A $10 million administrative monetary
penalty was also part of the settlement. While Bell Canada did
not contest the Commissioner of Competition's conclusions, it
did not accept the Commissioner's allegations.
The Bureau's position is that Bell Canada had charged higher
prices than those advertised, despite the fact that disclosure of
additional mandatory fees were set forth in disclaimers associated
with Bell Canada's advertisements.
"I am pleased that Bell cooperated with the Bureau's
investigation and is taking steps to correct the misleading
advertisements," said Melanie Aitken, Commissioner of
Competition. "When a price is offered to consumers, it must be
accurate. Including a fine-print disclaimer is no licence to
advertise prices that are not available."
The Competition Act prohibits representations to the
public that are false or misleading in a material respect. The
general impression conveyed by the representation as well as its
literal meaning are both to be taken into account in determining
whether an advertisement is materially false or
misleading. Because of this, the practice of many advertisers
has been to use fine-print disclaimers to add clarity to their
representations. The issue with these disclaimers is whether
the information contained in the "fine-print" is
sufficient to balance the general impression conveyed by the
overall advertisement. Disclaimers that, in the view of the Bureau,
contradict the general impression conveyed by the overall
advertisement, rather than clarify it, are likely to encounter
Nor is the Bureau's view on the potential inadequacies of
some fine-print disclaimers new. In its False or
Misleading Representations and Deceptive Marketing Practices
pamphlet issued in 2003, the Bureau stated that fine-print
disclaimers "often fail to change the general impression
conveyed by an advertisement. If you do use them, make sure the
overall impression created by the ad and the disclaimer is not
misleading." Yet while the Bureau's view may be
largely unchanged, it appears that its willingness to take
enforcement action has.
In taking action against Bell Canada, the Commissioner has sent
a very clear message to Canadian business that, in cases where the
Commissioner is of the view that the disclaimer in an advertisement
is not sufficient, in her opinion, to offset the general impression
of the advertisement, the Commissioner will take action to protect
Canadian consumers – an action that could be very costly
to the advertiser.
Nor is the Bureau the only agency in Canada interested in
consumers understanding what the total price is for advertised
products and services. By way of example, last year Quebec
amended its Consumer Protection Act to require that, in
advertising that includes the price of goods or services, the total
price that the consumer must pay, exclusive of taxes, be
Advertisers should also be mindful of exposure to civil actions,
including class actions, by private parties to recover losses or
damages allegedly suffered as a result of false or misleading
In light of these developments and risks, Canadian advertisers
would be well advised to review their advertisements and their
fine-print disclaimers, especially those that relate to price, with
their legal advisers before publication.
The Canadian Competition Bureau issued a template document for use as a form of Consent Agreement, to be filed with the Competition Tribunal to resolve concerns the Bureau may have with proposed mergers.
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