Earlier today, the Commissioner of Competition (the
"Commissioner") announced that it had entered into a
Consent Agreement with Bell Canada ("Bell") in connection
with certain Bell employees posting misleading reviews and ratings
of the company's mobile applications. Under the terms of the
Consent Agreement, Bell must not "direct, encourage or
incentivze" its employees or contractors to "rate, rank
or review apps in app stores." Additionally, the Consent
Agreement requires Bell to enhance and maintain its compliance
program and pay a $1.25 million administrative monetary
This is the first case brought by the Commissioner relating to
the use of social media ranking activities of a company and the
Consent Agreement clearly states that the Commissioner's view
is that ratings and reviews "have become an important source
of information for consumers". This enforcement approach is
consistent with the Competition Bureau's (the
"Bureau") stated position that the application of
competition laws to the digital economy is one of the
Commissioner's enforcement priorities.
In November 2014, the media reported that, following several
complaints, the Bureau was looking into whether Bell had engaged in
conduct that is commonly referred as "astroturfing"
(i.e., where employees or consultants of a company generate
positive reviews in support of the same company's product or
service). On December 18, 2014, the Commissioner launched an
inquiry into the marketing practices engaged by Bell
Astroturfing is viewed as a form of misleading advertising under
Canadian competition law, as it creates the false impression that
independent consumers have had positive experiences with that
product or service. This behaviour is increasingly viewed as
problematic given the weight consumers typically give to
independent product reviews and ratings, and the growing popularity
of review websites and apps.
According to the Bureau's press release, certain Bell
employees were encouraged to post positive reviews and ratings of
the free MyBell Mobile app and Virgin My Account app on the iTunes
App Store and the Google Play Store. These apps allow Bell
customers to manage their existing mobility accounts directly from
their mobile devices. The employees did not disclose the fact that
they were employed by Bell.
The Bureau concluded that these reviews and ratings created the
"materially false or misleading" general impression that
they were made by independent and impartial consumers and
temporarily affected the overall star rating for the
As soon as Bell became aware of the conduct, it removed the
employees' reviews and ratings, updated its social media
guidelines, and cooperated fully with the Bureau's
investigation. The Consent Agreement reflects this and indicates
that Bell's full cooperation resulted in more favourable terms
than would otherwise have been the case.
While the digital economy provides businesses with the
opportunity to effectively target customers, businesses must be
careful how they design and implement their advertising campaigns.
This is particularly so with respect to social media/digital
advertising strategies, which are coming under increasing scrutiny
by a number of Canadian regulators.
This case is noteworthy because it underscores the importance of
disclosing material affiliations between a company and a reviewer
(e.g., employment, sponsorship, paid reviews, etc.) when posting
positive reviews or ratings regarding a product or service the
business is offering.
As stated above, this case also highlights the fact that the
digital economy continues to be a priority enforcement area for the
Commissioner and the Bureau. This case reinforces the need for
businesses to implement appropriate compliance measures to ensure
that their digital/mobile marketing campaigns comply with
applicable Canadian laws (i.e., Competition Act, CASL,
privacy laws, consumer protection, etc.) – especially in
light of the significant penalties and reputational harm that may
flow from non-compliance. The other takeaway is that, given the
rapidly evolving nature of the digital/mobile space, it is
necessary for companies to continually assess the effectiveness of
their existing compliance measures and update them, as
Regular prices, sale prices, clearance sales – these terms are ubiquitous in the retail world and are a familiar component of marketing strategies intended to convince consumers that now is the best...
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