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 charges.
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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