The Competition Bureau (the "Bureau") announced
yesterday that it has initiated proceedings against Aviscar, Budget
and their parent company, Avis Budget Group Inc. (collectively, the
"Companies"). The Bureau alleges that the Companies
engaged in false or misleading advertising in that they advertised
misleading prices to consumers. The Bureau's application seeks,
among other remedies, a total of $30 million in administrative
monetary penalties ("AMPs") and refunds to affected
In its application to the Competition Tribunal (the
"Tribunal"), the Bureau alleges that the Companies made
false or misleading representations to the public regarding the
prices consumers must pay to rent vehicles and associated products
in Canada. Specifically, the Bureau alleges that the Companies
required consumers to pay additional "non-optional fees,"
which they represented as being taxes, surcharges and/or fees
mandated by third parties despite the fact that the Companies chose
to pass these costs on to consumers to recoup part of their own
cost of doing business. According to the Bureau, these
"non-optional fees" increased the cost of a car rental by
up to 35% - in other words, the advertised price was not attainable
given these "non-optional fees."
The materials filed by the Bureau include multiple
examples of advertising by the Companies across a variety of
platforms including newspapers, flyers, websites, mobile
applications, oral representations (e.g., at rental locations and
customer service scripts), television commercials, and electronic
messages (e.g., e-mails).
The Bureau also notes several aggravating factors:
1. The national reach of the Companies' conduct;
2. The Companies made the same or similar representations
frequently and over an extended period of time;
3. The Companies' representations were material to consumer
4. Self-correction is unlikely to remedy adequately or at all the
Companies' conduct; and
5. The Companies have collected more than $35 million in
"non-optional fees" from their customers since March
This case is noteworthy for several reasons. First, it signals
that misleading advertising continues to be a priority enforcement
area for the Bureau. Second, as evidenced from the AMPs being
sought, the Bureau will seek to impose significant financial
consequences against businesses it believes have engaged in
misleading advertising (in addition to reputational harm). Third,
businesses need to ensure that the pricing information disclosed to
consumers is clear, including with respect to additional/mandatory
fees that will be applied at the time of purchase.
Additionally, the Bureau scrutinized the Companies'
allegedly misleading advertising representations on multiple
advertising channels (i.e., print, digital, etc.) – this
should encourage businesses to take a holistic approach when
assessing compliance with applicable Canadian laws (i.e.,
Competition Act, CASL, privacy laws, consumer
For a copy of the Bureau's press release regarding the
threshold, please click here.
For a link to the Bureau's application to the Competition
Tribunal, please click here.
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The Canadian Competition Bureau issued a template document for use as a form of Consent Agreement, to be filed with the Competition Tribunal to resolve concerns the Bureau may have with proposed mergers.
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