On September 14, 2012, the Competition Bureau announced it had
launched legal proceedings before the Ontario Superior Court of
Justice against three of Canada's largest telecommunications
companies (Bell Canada, Rogers Communications, and Telus
Corporation) and a wireless industry association (Canadian Wireless
Telecommunications Association – CWTA) for misleading
advertising under the Competition Act (the Act).
After conducting a five-month investigation, the Competition
Bureau has alleged that the parties sold premium-rate digital
content (e.g., ringtones, trivia questions, etc.) to their
customers without adequately disclosing the fees. In particular,
the Competition Bureau has alleged that customers were misled into
believing the content was free, when it was not. The fees
associated with premium content are outside standard text messaging
plans. The Competition Bureau also states Bell, Rogers, and Telus
each took a share of the revenues collected from these
The CWTA issued a statement in response to the Competition
Bureau's announcement, stating wireless carriers have no
control over the services at issue and only manage the billing on
behalf of the third-party companies. The CWTA maintained that
providing consumers with clear information to text messaging
services is essential, which is why it implemented the requirement
that these third-party companies use a "double opt-in"
procedure to obtain consent from each customer before they receive
premium text messages. Double opt-in procedures apply the first
time a consumer subscribes to a premium service on a short code and
require companies to "double check" that the consumer in
fact ordered the service, for example, by confirming their
subscription through their device before text messages are
The Competition Bureau is seeking:
Full customer refunds,
$10 million from each of Bell, Rogers, and Telus in
administrative monetary penalties, and a $1 million administrative
monetary penalty from CWTA (total: $31 million),
a stop to any representations that do not clearly disclose the
price and other terms applicable to premium-rate digital content,
corrective notices to be issued from each of Bell, Rogers,
Telus, and the CWTA, informing the public about any order issued
Under the Act, $10 million is the maximum administrative
monetary penalty for a corporation.
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