The Competition Bureau has resolved its first public enforcement
action alleging that a marketer engaged in astroturfing.
"Astroturfing" is a practice whereby marketers, or their
representatives, post fake consumer reviews online to help promote
their products or services. Bell Canada, one of Canada's
leading telecom providers, entered into a Consent Agreement with
the Bureau on October 14, 2015.
The Competition Bureau (the "Bureau") alleged that
Bell Canada encouraged certain employees to post positive reviews
and ratings of its "MyBellMobile" and "Virgin Mobile
My Account" apps on the iTunes and Google Play store, and that
the employees did not disclose their relationship to the company in
the posts. Failing to disclose the material connection between the
reviewer and the service, the Bureau alleged, was false and
misleading under the Competition Act.
The Bureau has signalled astroturfing as an enforcement priority
for some time. In 2014, the regulator put out an announcement
identifying the practice as problematic and took the unusual step
of encouraging consumers who suspected astroturfing to report the
conduct to the Bureau.
In the Consent Agreement, Bell agreed to pay administrative
monetary penalty of $1.25 Million. The costly penalty is perhaps
surprising, given that the app was free and useful only to existing
Bell customers, and because the Bureau acknowledged that Bell was
cooperative throughout the investigation. This is not the first
time, however, that Bell has been before the Bureau for allegedly
false or misleading advertising. In June 2011, Bell agreed to pay a
$10 Million administrative monetary penalty for failing to
adequately disclose all mandatory fees related to its special price
offers for bundled service pricing. A case against Bell (and
others) is also pending before the Ontario Superior Court in
respect to the adequacy of disclosure of premium text messaging
In addition to the monetary penalty, Bell has agreed (without
admission of wrongdoing) to enhance its corporate compliance
program, "prohibiting the rating, ranking or reviewing of apps
in app stores by employees and contractors," and to host a
workshop about trust tin the digital economy.
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Software license agreements generally require the customer to pay fees for the software license and related services, which fees are usually based upon the duration of the license and the manner in which the customer is allowed to use the software, together with applicable taxes and withholdings.
In less than nine months, on July 1, 2017, persons affected by a contravention of Canada's anti-spam legislation will be able to invoke a private right of action to sue for compensation and potentially substantial statutory damages.
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