On February 4, 2014, Lisa Campbell, Deputy Commissioner of the
Fair Business Practices Branch, and Sophie Beaulieu, Competition
Law Officer, participated in a lunch seminar at McCarthy
Tétrault's Montreal office to discuss the Competition
Bureau's current enforcement priorities and recent enforcement
actions in the area of misleading advertising and marketing. The
following are key takeaways from their presentation.
Recognizing the growing importance
of the digital economy, the Bureau continues to focus on online and
mobile advertising, as well as mobile payment:
Through various initiatives at the
national and international level, including a workshop held last
fall with University of Ottawa's Canadian Internet Policy and
Public Interest Clinic, the Bureau looks at emerging online and
mobile advertising technologies and trends. The Bureau monitors
these developments not only to detect potential misleading claims
and representations to consumers, but also to understand the role
of the different parties involved (advertisers, publishers,
advertising affiliates, etc.) to determine at what level it should
intervene, if appropriate, to increase conformity.
The Bureau is concerned with
deceptive online endorsements, testimonials and consumer ratings
and reviews (or "astroturfing"). Contrary to the U.S.
Federal Trade Commission, the Bureau has no specific guidelines on
the use of endorsements and testimonials in advertising, but it has
indicated that reviews and endorsements should disclose when the
author has a connection with the advertiser or advertised product.
For example, reviews by employees of the advertiser or of a
third-party hired by the advertiser should appropriately disclose
The Bureau is preparing for the
enforcement of the new provisions of the Competition Act
introduced under Canada's Anti-Spam Legislation
(« CASL ») that will come into force on
July 1, 2014. These new provisions specifically prohibit, under
both civil and criminal provisions, false or misleading
representations in electronic messages, including false or
misleading sender or subject matter information, or in the locator
(e.g. URL, metadata). Violation of the new criminal
provisions will be punishable by a fine at the discretion of the
court and/or imprisonment of up to 14 years. Under the new civil
provisions, the Bureau will be able to apply to a court for an
order to stop the conduct, publish corrective notices, refund
consumers and impose an administrative monetary penalty of up to
Misleading representations related
to prices is another priority area for the Bureau. More
specifically, the Bureau is concerned with "drip pricing"
practices, which refer to advertising part of a product's price
and imposing additional fees and surcharges later in the buying
process. The Bureau is currently investigating Avis Budget with
respect to alleged improper disclosure of fees and surcharges
associated with online car rentals.
Finally, the Bureau will continue to
take action against inappropriate fine-print disclaimers. The
Bureau has consistently taken the position that while fine print
disclaimers may clarify ambiguities or provide reasonable
qualifications, they should not contradict the literal meaning and
general impression conveyed by the overall advertisement. More
specifically, the Bureau has taken enforcement action in cases
where it considered that advertising a price to consumers and
disclosing additional mandatory costs in accompanying fine-print
disclaimers was misleading.
The Bureau will continue to seek
administrative monetary penalties in civil misleading advertising
cases, and has sought the $10 million maximum in recent cases. In
light of the Bureau's recent aggressive enforcement approach,
care should be taken to ensure that the general impression conveyed
by advertisements and claims, especially in the online and mobile
environment and with respect to prices, is not false or
The Commissioner of Competition addressed innovation, enforcement and policy initiatives at the Competition Bureau in his keynote speech, "Strengthening Competition: Innovation, Collaboration and Transparency."
Used car listing website operator CarGurus Inc.'s attempt to force rival Trader Corporation to supply it with vehicle listing data has encountered a dead end as the Competition Tribunal denied it leave to commence a private application under several provisions of the Competition Act.
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