Canada: Commissioner Of Competition's Case Against Rogers Communications Fails

Last Updated: September 13 2013
Article by Daniel G. Edmondstone

After more than 40 hearing days over three years, the Commissioner of Competition's misleading advertising case against Chatr Wireless Inc. and its parent, Rogers Communications Inc. (herein, "Rogers", collectively) has been (mostly) decided. The decision represents an almost complete victory for Rogers.

The case dates from 2010. Rogers set up Chatr Wireless in order to better directly compete against new wireless entrants such as WIND Mobile, Mobilicity and others. As part of that competitive strategy, Chatr launched an advertising campaign featuring the phrase "fewer dropped calls than new wireless carriers" and then "no worries about dropped calls". The Commissioner of Competition brought this case a few months later, alleging these statements were false and misleading.

This litigation can be placed within a context of broader regulatory and enforcement turmoil. WIND Mobile and Mobilicity complained to the CRTC regarding their roaming arrangement with Rogers; they were unsuccessful. Mobilicity made a complaint against Rogers under the abuse of dominance provisions of the Competition Act: Rogers was using Chatr on a temporary basis to substantially lessen or prevent competition from Mobilicity. Public Mobile also complained to the Competition Bureau that Chatr's actions in the marketplace were an abuse of Rogers' dominant market position. Particulars of the Public Mobile complaint included that it experienced difficulty in obtaining retail space in major malls because the space had been taken by Rogers and other incumbent carriers. Some weeks later, WIND Mobile made a complaint of false advertising against Rogers. The Commissioner of Competition decided not to pursue the abuse of dominance complaints but rather to bring a proceeding under the civil reviewable misleading advertising provisions.

Justice (now Associate Chief Justice) Marrocco of the Superior Court of Justice (Ontario) issued a decision on August 19, 2013 that dismissed most of the Commissioner's case. The Court found that the advertising in question was neither false nor misleading and that it was substantiated by a proper and adequate test. In certain regional markets, a number of days after the Chatr advertising campaign launched, the Court found that Rogers failed to have proper and adequate testing in hand at the time the campaign launched. This arose because the testing in the various wireless networks was not complete in certain cities at the time that the advertising was first disseminated. This provision of the Competition Act was the subject of a Charter of Rights challenge by Rogers that was unsuccessful.

The hearing will continue at a date to be set, to allow the Commissioner and the respondents to make submissions with respect to the issue of any appropriate remedy that should be imposed on the respondents for this relatively narrow violation.

The decision is 77 pages long but reads very well and has a number of interesting and potentially important findings for advertisers, which are summarized below.

1. The Notional Consumer.

The Court dealt with the issue of the appropriate characterization of the "consumer" to whom the advertising is directed. The 2012 Supreme Court of Canada decision in Richard v Time Inc. (see our bulletin regarding that case) proceeded under Quebec's Consumer Protection Act. The Supreme Court found that, when analyzing an advertisement using the statutorily mandated "general impression" test, the Court should use the perspective of the average customer who is described by the Supreme Court as "credulous and inexperienced and takes no more than the ordinary care to observe that which is staring him or her in the face upon first entering into contact with an entire advertisement". There has been a fear that the analysis used by the Supreme Court under the Quebec Consumer Protection Act might be extended to also apply to cases under the Competition Act. The Ontario court in Chatr pointed out that

"[t]here is a difference between the purpose of Quebec's Consumer Protection Act and the purpose of the Competition Act. The Quebec legislation is intended to protect a vulnerable person from the dangers of certain advertising techniques....The Competition Act is intended to maintain and encourage competition in Canada in order to 'provide consumers with competitive prices and product choices': see s. 1.1 of the Competition Act.

The difference in purpose between Quebec's Consumer Protection Act and the Competition Act is a relevant consideration in determining the proper consumer perspective to be applied to the contentious representations.

Richard v Time Inc. defines the person considering the advertisement in three ways: credulous, inexperienced and a consumer"

The Court in this matter held that in the Richard v Time Inc. case the matter involved a representation made to the public at large. In this proceeding, a consideration of the mass media advertising leads to the conclusion that:

"the consumer is a person wanting unlimited talking and texting wireless services, as well as cost certainty."

The Court further stated that

"accepting that the consumer is credulous in the context of this Application means that the consumer is willing to believe the fewer dropped calls claim because it is contained in public representations to that effect.

The requirement that the consumer be inexperienced is more difficult to apply. The consumer by definition resides in the segment of the wireless services market that wants unlimited talking and texting wireless services. Such consumer cannot be viewed as inexperienced with wireless talking and texting, otherwise the consumer would not reside in the segment of the wireless services market. For example, the consumer might know that he or she wants certainty in their wireless monthly bill due to a previous bad experience with unexpected cell phone fees. In addition, the consumer knows that he or she wants talking and texting wireless services and he or she wants those services in an unlimited way. Accordingly, I am satisfied that the lack of experience relates to the technical information contained in the advertisements. For example, the advertisements claim that Chatr will drop fewer calls because of its cell site density. It is this aspect of the claim with which the consumer lacks experience.

I am satisfied therefore that the consumer's perspective in this case is that of a credulous and technically inexperienced consumer of wireless services."

While the Court in this matter does not explicitly analyze the case law under the relevant Competition Act provisions, the analysis is fully within the logic set out in the Ontario Court of Appeal decisions in R v Viceroy Construction Co. (1975), 29 CCC (2d) 299 (Ont CA) and R v R. M. Lowe Real Estate Ltd (1978), 40 CCC (2d) 529 (Ont CA) that provide a coherent articulation of the standard of the "average purchaser". One might sum up this test as the average purchaser being a purchaser who is interested in making the purchase in question, not a purchaser who by reason of special training, education, experience or skepticism, is especially aware of advertisements and studies them with great care, nor a purchaser who may lack such training, education, experience or skepticism, or who may be especially naïve, non-thinking, or credulous and therefore careless in considering all advertisements.1

This decision may provide significant comfort to advertisers that their advertisements will not be held to an unreasonable standard of review in the determination of the appropriate meaning to be ascribed to them.

2. Testing: What is required?

The Commissioner's case hinged on the allegation that the testing carried out by Rogers2 was inadequate. These tests were, by their nature, a form of sampling. The Commissioner, through the use of her enforcement powers, was able to obtain information with respect to dropped calls that came from the central switch of each of the relevant wireless networks. That data, the Commissioner alleged, showed that, contrary to the results of the Rogers drive tests, the number of dropped calls was not as found by the drive tests. This line of reasoning held the dangerous potential to make comparative testing based on sampling inappropriate or, in the words of the statute, not "proper and adequate". No wireless network would willingly give access to the data stored in its central switch computer system to a competitor. Thus, if such data is the appropriate measure of the comparison, then such comparisons would never be possible under Canadian law.

As it happened, the Court rejected the Commissioner's position on the basis that the switch data was too complex to allow for the comparison to be made between systems on the evidentiary record available. Thus, the Court did not need to consider the issue of whether such data, if it were available, would be preferred over that produced by sampling.

The Court, it should be noted, did endorse as appropriate the drive tests themselves as universally used by wireless service providers. They were found by the Court to be fit for purpose and one hopes that this will discourage future arguments that would undermine the ability of businesses to use well-established industry recognized testing methodologies to satisfy the requirements of the Competition Act's provisions. While not cited by the Court, its decision might be well summarized by reference to Advertising Standards Canada's Code of Conduct. Clause 1(e) states:

"...test or survey data...must be reasonably competent and reliable, reflecting accepted principles of research design and execution that characterize the current state of the art."

3. Small Differences

The Commissioner alleged that the differences between the number or rate of dropped calls as between the various new networks and Rogers was small enough to not be discernible to consumers and thus not to be an appropriate difference to advertise. The Court rejected this position. The Court found that many claims about products are not discernible, giving as examples food safety and nutritional claims. The Court quoted WIND Mobile's submission to the CRTC which stated "put simply, every dropped call matters". The Court found that several of the new entrants clearly thought that "the public was concerned with the risk of dropped calls rather than their relative frequency." The Court concluded that it was satisfied that the notional consumer in this matter "would be more inclined to be a customer of a network that offers fewer dropped calls. Where price is not a factor, [the Court finds] it difficult to believe that a consumer would choose a network that offered only a few more dropped calls. Even if one network only had a few more dropped calls, one of those calls could be extremely important." The Court declared that it was not satisfied that "the notional consumer viewing the Chatr ads expected the dropped call experience to be discernibly different.

4. What is a "test"?

Because the advertising campaign for Chatr launched in the absence of the final test results for certain cities covering the first number of days of the campaign, Rogers argued in this Application that an adequate test within the meaning of the Competition Act could be satisfied by an analysis of facts including that the Rogers network had denser cell sites; a frequency spectrum that has better propagation qualities, as well as other factors. An engineer or other technician skilled in network technology could examine these facts and conclude that one network will produce more or fewer dropped calls than another. Based on these factors, Rogers' engineers could make such a conclusion.

The Court rejected this argument stating that "the law permits a flexible and contextual analysis when assessing whether a claim has been adequately and properly tested, but there must be a test." (emphasis added). The Court stated that the test does not necessarily need to be one that has been conducted by or for the advertiser. In this regard, it cited the better propagation qualities of lower frequency spectrum that was described in the Friis transmission formula first published in 1945. If the Commissioner were to allege that a particular claim that is false or misleading required this fact to prove it to be true, then it would seem that the advertiser will have an obligation to provide such "testing". The Court was "satisfied that Rogers' network had the technical advantages that the respondents claimed that it had in the fewer dropped calls claim." These advantages, however, do not relieve the advertiser of testing the fewer dropped calls claim. The technological advantages are, however, capable of confirming the adequacy and the propriety of a test that appears to substantiate the fewer dropped calls claim.

The decision may make prudent advertisers consider whether some of their advertising claims of the "performance efficacy or length of life of a product" are justified on something that has the outward appearance of a "test".


As stated above, this proceeding is not yet finalized given that there is the need for a further hearing to determine what remedy, if any, is appropriate in the circumstances of Rogers not having certain test results in hand at the time that the first public mention of the advertising claim was released. The decision is interesting and important for a few reasons. There is a lack of jurisprudence in recent years involving advertising by legitimate businesses. Cases against fake business directories and imitators of yellow pages, developers of almost magical devices to improve fuel efficiency do not necessarily make for the best or most useful jurisprudence to give guidance to legitimate businesses in their everyday planning.

Here are four important conclusions:

Advertisers should know that a test must be a test and not just a logical conclusion or inference.

This decision confirms that industry standard testing is a good basis on which to conduct tests. The Commissioner's attempt to undermine a methodology used internationally by telecommunications service providers was perhaps, in retrospect, a tall order.

However, the fact that consumers may not be able to discern the difference between two products or services does not necessarily mean that those differences are inappropriate as the basis for comparative advertising.

Finally, from a jurisprudential perspective, this decision limits the application of the Supreme Court of Canada's decision in Richard v Time to its Quebec Consumer Protection Act context. The Court rightly points out the purpose of the Competition Act is different and broader. The Court's analysis follows the logic of the line of cases developed over decades under the Competition Act.


1. From R v Simpson Sears Ltd. (1976), 28 CPR (2d) 255 (Ontario County Court).

2. Described as "drive tests" in which motor vehicles equipped with sophisticated equipment would drive in a pre-arranged grid pattern throughout an urban/suburban area and make simultaneous calls to competing wireless networks, measuring various aspects of those calls to the networks, including the number of calls that were "dropped".

The foregoing provides only an overview. Readers are cautioned against making any decisions based on this material alone. Rather, a qualified lawyer should be consulted.

© Copyright 2013 McMillan LLP

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions