Canada: Lessons To Be Learned From The Chatr Wireless Inc. And Rogers Communications Inc. Case

Last Updated: October 7 2013
Article by Deborah Templer

Most Read Contributor in Canada, October 2018

On August 19, 2013 Justice Marrocco of the Ontario Superior Court of Justice released his final determination of the application commenced by the Commissioner of Competition in The Commissioner of Competition v. Chatr Wireless Inc. and Rogers Communications Inc.

The Complaint

The Commissioner of Competition commenced the application in November 2010 (amended in March 2011) seeking, among other things:

  • a declaration that Rogers Communications Inc. ("Rogers") and its brand Chatr Wireless Inc. ("Chatr") had engaged in reviewable conduct contrary to paragraphs 74.01(1)(a) (false or misleading representations) and 74.01(1)(b) (representations not based on adequate and proper testing) of the Competition Act;
  • an order that Rogers and Chatr stop making representations about dropped call performance for a period of 10 years; and
  • an order requiring Rogers and Chatr to publish notices describing their reviewable conduct, including the geographic area to which the conduct related and a description of the manner in which the false and misleading representations were disseminated.

The Commissioner identified two allegedly offending representations, both related to dropped calls:

  • "Fewer dropped calls than new wireless carriers"; and
  • After November 5, 2010, representations that Chatr subscribers would have "no worries about dropped calls."

These two representations appeared as part of an extensive social media and public relations campaign coincident with the launch of Chatr in June 2010 and a broad and nationwide campaign composed of television, radio, digital, out of home and print advertising thereafter.

The representations were sometimes accompanied by a disclaimer that stated: "Based on: cell site density; quality of indoor and underground reception; and seamless call transition when moving out of zone."

The Commissioner asserted that the two representations were false because:

  • In Ottawa, Chatr's dropped call rate was higher than those of certain new carriers on 84 of 92 days;
  • In Toronto, Chatr's dropped call rate was higher than a new carrier's on 53 of 92 days.

The Commissioner also complained that the representations were misleading because they conveyed the general impression that there was an appreciable dropped call rate difference among carriers, when in fact the difference was not appreciable during the period tested.

Adequate and proper testing

Rogers and Chatr purported to support the fewer dropped calls claim with drive tests. The Commissioner complained that the drive tests did not constitute "adequate and proper testing" because, among other things:

  1. Rogers did not conduct any drive tests in Calgary or Edmonton before making the two offending representations; and
  2. Rogers' drive tests in the greater Toronto area prior to September 27, 2010, did not include test data against Public Mobile.

The general impression conveyed and literal meaning of the advertisements

In assessing the impressions conveyed by the advertisements at issue, Marrocco J. concluded that the appropriate consumer perspective in assessing whether or not the claims at issue in this case were false or misleading was that of a "credulous and technically inexperienced consumer of wireless services."

In assessing the general impression conveyed by the advertisements, Marrocco J. concluded that the general impression conveyed by the "fewer dropped calls" and "no worries about dropped calls" advertisements is that there are no worries about dropped calls on the Chatr network because there are fewer dropped calls on that network, and that the Chatr network is more reliable than those operated by the new carriers.

Must the representations be true in each city?

One of the arguments made by the Commissioner is that the contentious ads were false unless the evidence provided that the fewer dropped calls claim was true in each of the cities in which Chatr operated and advertised. Rogers / Chatr, on the other hand, argued that the consumers would have expected the claims to be true on average across all cities where Chatr operated.

Marrocco J. accepted the Commissioner's position, finding that, upon consideration of all the evidence, the fewer dropped calls claim represents to a credulous and technically inexperienced consumer that use of a Chatr phone within any Chatr zone will result in fewer dropped calls than would be true for a Wind Mobile, Public Mobile or Mobilicity customer.

Accordingly, in order for the fewer dropped calls claim to be neither false nor misleading, the Rogers network should have offered fewer dropped calls than the new carriers in each of the cities in which Chatr operates.

Evidence in support of the representations

One of the key issues before Marrocco J. in assessing whether or not the representations at issue were false or misleading was whether "switch generated data" (data collected by network operators about call performance) provided to the Competition Bureau by certain new carriers and by Rogers / Chatr was admissible evidence to demonstrate that the fewer dropped calls claim was false with respect to other providers.

Following a review of the extensive expert evidence provided on the reliability of this switch generated data, Marrocco J. concluded that although this evidence was admissible, it was dangerous to place significant weight on a comparison of the switch generated dropped call rates when determining whether the Chatr fewer dropped calls claim was false or misleading.

Further, Marrocco J. rejected the Commissioner's argument that the fewer dropped calls claim was misleading unless there was a discernible difference in drop call rates amount Rogers / Chatr and other providers. Rather, he was satisfied that a consumer would choose a network that offered fewer dropped calls to avoid the possibility of dropped calls, but would not expect the drop call experience to be discernibly different from that of other providers.

Conclusions

In the result, and because the Commissioner's false and misleading advertising claim was based to a significant degree on the switch generated data, Marrocco J. found that he was not satisfied that the Commissioner had proven on a balance of probabilities that Rogers / Chatr's fewer dropped calls claim was false or misleading.

Nevertheless, Marrocco J. found that Rogers / Chatr had failed to conduct an adequate and proper test in:

  1. Calgary and Edmonton; and in
  2. Toronto and in Montreal against Public Mobile,

prior to making the fewer dropped calls claim at the time of Chatr's launch in those cities, and therefore engaged in reviewable conduct contrary to s.74.01(1)(b) of the Competition 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.

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

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

Authors
Similar Articles
Relevancy Powered by MondaqAI
Goldman Sloan Nash & Haber LLP
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Goldman Sloan Nash & Haber LLP
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
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
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

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