On September 13, 2016, the Competition Bureau reached a consent
agreement with Comwave Network Inc., which resolved the
Bureau's concerns over allegations of false or misleading
advertising by Comwave in respect of representations made to public
on its telecommunication services and prices. The Bureau had three
sets of concerns:
Comwave allegedly made
representations to the public about the prices of the
telecommunications services it provided, and then allegedly charged
consumers additional fees that were only disclosed to consumers in
fine print disclaimers and during its telephone sales intake
process. The Bureau concluded that the disclaimers and the intake
process were insufficient to alter the misleading general
impression created by the prices advertised by Comwave, which were
in fact not attainable due to the additional fees;
Comwave had allegedly been making
representations regarding unlimited local calling and unlimited
Internet usage through a number of advertising media since about
2011. Disclaimers allegedly contained terms and conditions that
limited residential phone service to 3000 minutes per month and
effectively limited Internet usage by significantly slowing
download speeds when consumers reached a certain amount of data per
month. The Bureau concluded that the disclaimers were insufficient
to alter the general impressions created by the advertising that
consumers could get unlimited local calling home phone service and
unlimited Internet usage; and
Comwave allegedly made
representations regarding special offers such as "free
services for six months", with additional terms and conditions
that were not disclosed to consumers until the telephone sales
intake process. The Bureau concluded that these subsequent
disclosures were insufficient to alter the misleading general
impression that consumers could receive free phone service for a
specified period of time.
Under the consent agreement, Comwave agreed to bring its
advertising practice into compliance with the misleading
advertising provisions of the Competition Act,
to publish a corrective notice, and to pay a $300,000
administrative monetary penalty and $60,000 towards the
Bureau's investigative costs over a three-year payment
schedule. Comwave also agreed to implement a corporate compliance
program to comply with the Competition Act in general and
the misleading advertising provisions in particular.
This case demonstrates the Bureau's continued focus on false
or misleading representations and businesses' need to ensure
that material information is clearly and promptly disclosed so as
to ensure that the representations do not convey to consumers any
misleading impressions that are contradicted in the fine print. It
should be noted that the Bureau has agreed to more favourable terms
than usual in this consent agreement due to Comwave's prompt
and full cooperation in the investigation.
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