On August 19, 2013, the Ontario Superior Court released its
decision on the misleading advertising application
launched nearly three years ago by the Commissioner of
Competition (the "Commissioner") against one of
Canada's largest telecommunications companies, Rogers
Communications Inc. ("Rogers"). The Court ruled partially
in favour of Rogers. Amongst other things, the Bureau sought a
declaration that Rogers' claims of "fewer dropped calls
than new wireless carriers" and "no worries about dropped
calls" associated with its discount service "Chatr"
were false and misleading, and a penalty of $10 million.
The Court agreed with Rogers that drive tests, performed by the
company in some markets to determine dropped call frequencies, were
consistent with industry standards and were sufficient to satisfy
the "adequate and proper test" requirements laid out in
the Competition Act. However, Rogers failed to test its
claims in Calgary and Edmonton against all new service providers
(including Wind Mobile, Public Mobile and Mobilicity), and in
Toronto and Montreal against Public Mobile. A further hearing will
be held to determine the amount of the monetary penalty owed as a
result of the partial breach.
Other highlights from the decision:
The Court applied the "credulous and technically
inexperienced consumer" standard from a recent Supreme Court
decision, Richard v. Time Inc., but highlighted the fact
that "credulous" and "inexperienced" should be
defined with the purpose of the Competition Act in mind,
as well as the particular consumer context. The Court stated the
Competition Act is intended to maintain and encourage
competition in Canada to "provide consumers with competitive
prices and product choices".
The Court dismissed all constitutional defences previously
raised by Rogers under the Charter of Rights and Freedoms
(the "Charter"). Rogers argued that the requirement to
show "adequate and proper tests" violated the right to
freedom of expression. The Court held that the limit on the right
was justifiable and reasonable under the Charter. Rogers also
argued that civil penalties for misleading advertising were
unconstitutional because it violated rights associated with being
charged with offences, including the right to be presumed innocent
until proven guilty. The Court found that the civil penalties were
not "true penal consequences" that were the result of an
offence, and not criminal, but regulatory. The purpose of the
penalties is to encourage conformity with the Competition
Act, not to punish.
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In less than nine months, on July 1, 2017, persons affected by a contravention of Canada's anti-spam legislation will be able to invoke a private right of action to sue for compensation and potentially substantial statutory damages.
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