Amendments to the Competition Act (the "Act")
have recently come into force which include significant changes
regarding deceptive marketing and misleading advertising.
Q. Have the amendments changed the nature of the marketing and
advertising practices prohibited by the Act?
A. No. The Act still prohibits the
making of any representation to the public that is false or
misleading in a material respect for the purpose of promoting the
supply or use of a product (knowingly or recklessly doing so, in
the case of a criminal offense). However, the amendments have made
it clear that in order to establish a deceptive marketing or
misleading advertising offence it is not necessary to show
any person was deceived or mislead by a representation;
any member of the public to whom the representation was made
was within Canada; or
the representation was made in a place to which the public has
The amendments have codified the case law that a representation
can be misleading or deceptive if someone was likely to be
mislead or deceived (as opposed to actually mislead or deceived).
In addition, the amendments appear to extend considerably the
notion of "public" both beyond Canadian borders (such
that Canadian businesses that advertise outside of Canada must now
ensure that their international advertising and marketing practices
comply with Canadian law in this regard) and what are
conventionally considered to be "public" places (e.g.
capturing misleading representations made in an office, not just
those displayed on a billboard).
Q. Have the amendments changed the penalties for
deceptive marketing and/or misleading advertising?
A. Yes. Penalties for these offences
have increased significantly. For example, the penalty for a
corporation engaging in a first time noncriminal offence has
increased by 100 times, to a maximum of $10,000,000, while repeat
corporate offenders can be fined up to $15,000,000. For indictable
offences, the prison term has increased from 5 to 14 years.
Q. Do the amendments give the Competition Tribunal any
additional powers with respect to deceptive marketing and/or
A. Yes. Offending advertisers can be
required to pay restitution to victims of non-criminal deceptive
marketing practices and, in order to ensure funds are available for
restitution, an advertiser's assets can be frozen and disposal
of property prevented, in advance of a finding that it has engaged
in offending conduct.
The content of this article does not constitute legal advice
and should not be relied on in that way. Specific advice should be
sought about your specific circumstances.
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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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