The Competition Bureau has released the first issue of its Deceptive Marketing
Practices Digest (formerly the Misleading Advertising
Bulletin). The purpose of the Digest is to present the
Bureau's perspective on advertising and marketing matters in a
In the first issue, the Bureau addresses the following online
advertising and marketing issues: 1) the use of disclaimers; 2)
astroturfing; 3) online behavioural advertising (OBA); 4)
geolocation; and 5) drip-pricing. The Bureau notes that these
issues present common problems which are not limited to online
advertising; notably, the risk of deceiving consumers via false or
misleading representations. The Bureau indicates that this problem
is due in large part to the inadequate disclosure of information
that consumers need to make informed choices. This problem can
arise where online information is misleadingly presented as coming
from an arms‑length source (also a problem for native
advertising and sponsored content). The Bureau notes that this
problem can also arise when necessary information (for example,
additional costs or additional material conditions) is hidden or
buried in disclaimers.
The first issue includes relatively in-depth guidance on the
proper use of disclaimers and the problems associated with
astroturfing In particular, the Bureau outlines the right way
and the wrong way to use disclaimers. The right way to use
disclaimers is to expand on, or clarify possible ambiguities in a
claim located in the body copy. The Bureau indicates this use of a
disclaimer is unlikely to mislead consumers. In contrast, the use
of a disclaimer to restrict, or somehow negate a claim in the body
copy of an advertisement is not appropriate. However, the Bureau
notes that if a claim in the body copy, considered on its own,
creates a materially false or misleading general impression, then
it is unlikely that a disclaimer will alter this general
On the topic of astroturfing (i.e. making representations
that appear to be authentic consumer reviews, but are actually made
by a party with a vested interest), the Bureau takes the position
that there is ample evidence to conclude that these representations
are "material" (as this term is used in the misleading
advertising provisions of the Competition Act).
Accordingly, the Bureau indicates there is a need to disclose any
"material connection" between the party making the
representation and the entity/product/service addressed in the
Finally, the Bureau gives a nod to its international consumer
protection partners (notably the U.S. Federal Trade Commission, the
Australian Competition and Consumer Commission and the U.K.
Competition and Markets Authority), indicating it keeps abreast of
their law enforcement practices in these areas. On this point, we
eagerly await the next issues.
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.
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