Canada: Court Orders Rogers To Pay $500,000 Competition Act Penalty And Provides Guidance On Remedies

On February 24, 2014, the Ontario Superior Court of Justice released its decision regarding remedies in Canada (Commissioner of Competition) v. Chatr Wireless Inc.1 The Court's decision provides important judicial guidance on the determination of appropriate remedies under the reviewable conduct provisions of the Competition Act (Act). In particular, the Court held that an administrative monetary penalty must be imposed for the purpose of promoting compliance with the Act and must be proportional to the nature of the person whose conduct one seeks to change.


In August 2013, the Court found that Chatr Wireless Inc., a discount talk and text service owned by Rogers Communications Inc., had violated the deceptive marketing practice provisions of the Competition Act for failing to conduct adequate and proper testing prior to making a performance claim that its service had "fewer dropped calls."2 But importantly, the Court did not find, as the Commissioner of Competition (Commissioner) had alleged, that Chatr had engaged in false and misleading advertising. In the same decision, the Court also confirmed the constitutionality of the administrative monetary penalty (AMP) provisions of the Act generally.

The Commissioner had initially sought an order prohibiting Chatr from engaging in similar conduct for a period of 10 years and requiring Chatr to pay restitution to customers, to pay an AMP in the maximum amount of $10 million and to issue a corrective notice.3 Subsequently, the Commissioner narrowed the relief sought to a 10-year prohibition order and an AMP of $5 to $7 million. The Commissioner argued that the high AMP was necessary to ensure compliance with the Act and that prohibition orders were standard procedure when a violation of the Act was found. The Court specifically rejected each of the Commissioner's arguments and ordered only payment of a $500,000 AMP.

Judicial Guidance on the Determination of the Appropriate AMP

The Court commented generally on the application of AMPs, stating that "the amount of any administrative monetary penalty ordered must be proportional with the nature of the person whose conduct one seeks to change" and that "[a]n administrative monetary penalty cannot be imposed with a view to punishment or deterring others who might contemplate making unsubstantiated performance claims." As the Act now provides for the possibility of imposing very significant AMPs, the Court's emphasis on proportionality and promoting compliance rather than punishment or deterrence provides some comfort that the maximum AMP would not be appropriate in all (or most) cases.

In denying the Commissioner's request for an AMP of $5 to $7 million, the Court specifically found that the Commissioner's submission failed to take into account two key distinguishing aspects: (1) Chatr's conduct was not found to be false or misleading; and (2) Chatr's subsequent testing had substantiated its claim. Comments of the Court in obiter appear to suggest a significant emphasis on the former aspect, as the Court noted that an AMP "in the range of $5-7 million might have been justified on the facts of this case if the fewer dropped calls claim had been false or misleading."

The Court addressed the following aggravating or mitigating factors set out in section 74.1(5) of the Act in ultimately setting the AMP at $500,000:

a.  the reach of the conduct within the relevant geographic market;

b.  the frequency and duration of the conduct;

c.  the vulnerability of the class of persons likely to be adversely affected by the conduct;

d.  the materiality of any representation;

e.  the likelihood of self-correction in the relevant geographic market;

f.  the effect on competition in the relevant market;

g.  the gross revenue from sales affected by the conduct;

h.  the financial position of the person against whom the order is made;

i.  the history of compliance with this Act by the person against whom the order is made; and


l.  any other relevant factor.

The Court placed considerable weight on the following facts in its reasoning:

  • Post-Claim Substantiation. While the fact that subsequent testing had substantiated Chatr's claim was not sufficient to avoid a finding that Chatr had violated s. 74.01, the Court found that the subsequent substantiation was relevant to factors (a), (b), (c), (d), (f) and (g) above, and that these factors, with the exception of (f), therefore did not aggravate the amount of the AMP. In respect of factor (f), the Court found that, while consumers had not been harmed since the claims were substantiated, competition was adversely affected because the market was exposed to the risk that the claims might be false, thus aggravating the amount of the AMP.
  • Reputational Risk. The Court considered that the reputational risk to a business like Rogers of making an unsubstantiated claim was relevant to factors (e) and (h) above. Having indicated that the financial position of the respondents is "a significant relevant consideration" when determining the AMP and noting Rogers' 2010 operating revenue of $6.98 billion, the Court then held that the reputational risk to a business such as Rogers "is so significant that a properly conducted cost-benefit analysis will lead to the conclusion that it is better to comply with the Competition Act."
  • Compliance History. The Court also considered Rogers' previous history of compliance, including a 2009 injunction (upheld on appeal) against Rogers in respect of claims that Rogers made regarding reliability of its network without testing its network against TELUS' HSPA/HSPA+ network. The Court found that this aggravated the amount of the AMP.
  • Precedent. The Court considered penalties that had been imposed in past cases. The Court cited three cases of AMPs being ordered for a breach of s. 74.01 of the Act, none of which it found to be persuasive. Two of the three cases considered occurred prior to the 2009 amendments that increased the maximum AMP to $10 million for a first offence (from $100,000). The third was a case of multijurisdictional fraud in which an $8-million AMP was ordered against Yellow Page Marketing, and the Court noted Chatr's argument that imposing a similar penalty would unfairly stigmatize it as a similar company. The Court also considered a 2009 consent agreement in which Bell voluntarily agreed to stop making representations that the Competition Bureau considered misleading and pay an AMP of $10 million,4 but found that it was "not helpful ... because [Bell's] representations were misleading, a fact not present in this application."
  • Harm Caused to Rogers. The Court also assessed the harm caused to Chatr by complainants that capitalized on the commencement of the proceeding, finding that Public Mobile, Wind Mobile and Mobilicity all benefited from publicizing the proceeding at Chatr's expense. The Court found that this harm to Chatr mitigated the amount of the AMP.

Judicial Guidance on the Need for a Prohibition Order

The Commissioner argued that a 10-year prohibition order would help ensure compliance, and that orders are regularly made even when the reviewable conduct occurred over a short period of time. Chatr argued that a prohibition order would be an unfair punishment, tantamount to an injunction because it would expose the company to a $15-million AMP for subsequent reviewable conduct and would compound the reputational harm it had already suffered. Chatr also argued that the Bureau had a practice of discontinuing proceedings once adequate testing was done, but that the company had been subject to harsh treatment since the Bureau maintained the proceedings even after adequate and proper testing proved the claims to be true. The Court found that Chatr had indeed suffered reputational harm and determined that a prohibition order was unnecessary.

Commissioner's Reaction

Shortly after the release of the decision, the Commissioner issued a statement indicating its dissatisfaction with the decision: 

"While we are pleased that the Court recognized that Rogers did not exercise due diligence in making its performance claims, we are examining the modest amount of the penalty imposed and the decision not to issue a prohibition order. The Bureau will take the time necessary to review the Court's reasons in order to make a determination as to next steps."5


1. 2014 ONSC 1146.

2. 2013 ONSC 5315.

3. Press release, Competition Bureau Takes Action Against Rogers Over Misleading Advertising, (November 19, 2010).

4. Press Release, Competition Bureau Reaches Agreement with Bell Canada Requiring Bell to Pay $10 Million for Misleading Advertising, (June 28, 2011).

5. Press release, Court Orders $500,000 Administrative Monetary Penalty in Rogers-Chatr Matter, (Feb. 24, 2014).  

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

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