The Competition Bureau has filed an application with the
Competition Tribunal against Aviscar and Budgetcar, and their
parent company, Avis Budget Group Inc., alleging deceptive
marketing practices contrary to several provisions of the Competition
Act. The Bureau's investigation into the
pricing practices of Avis and Budget, two of the largest rental car
companies in Canada, uncovered price representations which the
Bureau considers to be false or misleading in a material respect,
dating back to 1997.
In its Notice of Application, the
Bureau submits that the prices advertised to the public by Avis and
Budget are "not in fact attainable," thereby creating a
false general impression about prices and discounts. The Bureau
submits that actual rental costs could be up to 35% higher than
advertised once "non-optional" fees imposed by both
companies are included. Although these "non-optional"
fees are known to Avis and Budget, the Bureau alleges that the
companies choose to exclude them from advertised prices and/or
discounts. The Bureau also alleges that the
"non-optional" fees, once revealed to the customer, are
characterized as charges being imposed on customers by governments
or other third-parties, when in fact they are Avis' and
Budget's own charges related to the cost of doing business.
The representations in question were allegedly made across a
broad range of media including print, mobile applications, online,
oral representations and electronic messages. Because the
Bureau's case involves allegations of deceptive marketing
practices carried on through electronic messages, this proceeding
is the Bureau's first under the new provisions of the
Competition Act that were implemented as part of
Legislation (CASL) in July 2014.
The relief sought by the Bureau includes an end to the alleged
false or misleading price representations, $30 million in
administrative monetary penalties ($10 million from each of the
three companies), and reimbursements to affected consumers. The
Bureau estimates that Avis and Budget have accrued over $35 million
worth of "non-optional" fees since March 2009. None of
the Bureau's allegations has been proven before the Competition
Clarity and accuracy in pricing were the core themes in 2011
when the Bureau investigated Bell Canada and ultimately entered
into a consent agreement in which Bell agreed to pay a $10-million
administrative monetary penalty for making allegedly false or
misleading representations in its advertising regarding its home
phone, Internet, television, and wireless service prices. Now,
almost four years later, the Commissioner of Competition remains
focused on the accuracy of pricing claims, stating that
"consumers are entitled to clear and precise information when
making their purchasing decisions and need to be confident that the
information they receive regarding additional fees is truthful and
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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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