Mail-in rebate.
Competition Bureau, Enforcement Guidelines, Consumer Rebate Promotions (2009): Consumers apply for the rebate after the purchase, by mail-in application, online or by other means. In [these guidelines] the term ‘mail-in rebate’ includes mail-in, Internet and other delayed-payment rebates. Various market participants may be involved in promoting and administering rebates.”
Malware (or “malicious software”).
A fraud term.
CRTC: “Malware, often sent through spam, is software that is installed for harmful purposes. It has many forms, such as viruses, worms, spyware, and keyloggers. Worms and viruses have many evil aims, including slowing down or otherwise interfering with the functioning of your computer or network. Spyware secretly spies on your computer, usually to collect personal information without your knowledge. Through keylogging, a person unknown to you can covertly record and monitor your keystrokes, thus picking up important information such as your online banking password.”
Government of Canada, Get Cyper Safe: “Malicious software that infects your computer, such as computer viruses, worms, Trojan horses, spyware, and adware.”
OnGuardOnline (U.S. Federal Trade Commission): “Malware is short for ‘malicious software.’ It includes viruses and spyware that get installed on your computer, phone, or mobile device without your consent. These programs can cause your device to crash and can be used to monitor and control your online activity. Criminals use malware to steal personal information, send spam, and commit fraud.”
Marketing.
Canadian Marketing Association, Code of Ethics and Standards of Practice: “Marketing is a set of business practices designed to plan for and present an organization’s products or services in ways that build effective customer relationships.”
Mass marketing fraud.
Competition Bureau, Ensuring Truth in Advertising: “Mass Marketing Fraud is defined as fraud committed via mass communication media using the telephone, mail, and the Internet. Provisions under the criminal regime of the Competition Act prohibit materially false or misleading representations made knowingly or recklessly, deceptive telemarketing and deceptive prize notices.”
“Match and win” contest (a type of promotional contest).
A “match and win” contest (e.g., the Monopoly contests McDonald’s used to run) is a type of contest where entrants must collect game pieces to match the pieces of a puzzle, specific words, etc. They are often structured to include “rare pieces” that commonly makes the odds of winning a big prize very high. Other types of contests where winners are chosen at random include random draw contests (where winners are chosen by manual or electronic random draws), seeded prize contests (e.g., Coke’s “under the bottle cap” promotions or Tim Hortons’ Roll Up The Rim To Win contests) where prized are seeded at random on packaging or on game/contest cards and online instant win contests (where entrants enter a code number for a chance to instantly win a prize).
“Material”.
To violate the criminal or civil misleading advertising provisions under the Competition Act (sections 52 and 74.01) a representation must be made to the public that is “false or misleading in a material respect”. In this regard, “materiality” does not depend on the value of a transaction, but rather has been held by Canadian courts to mean that a representation or claim could lead an average consumer to purchase a product (or otherwise alter their conduct).
Competition Bureau, Enforcement Guidelines, Application of the Competition Act to Representations on the Internet (2009): “To contravene certain provisions of the Act, a representation must be “false or misleading in a material respect”. This phrase has been interpreted to mean that the representation could lead a person to a course of conduct that, on the basis of the representation, he or she believes to be advantageous. It is important to note that omitting relevant information could also be viewed as material.”
R. v. Kenitex Can. Ltd. et al. (1980), 51 C.P.R. (2d) 103: “[A] representation will be false or misleading in a material respect if, in the context in which it is made, it readily conveys an impression to the ordinary citizen which is, in fact, false or misleading and if that ordinary citizen would likely be influenced by that impression in deciding whether or not he would purchase the product being offered”.
Commissioner of Competition v. Yellow Pages Marketing, 2012 ONSC 927 (Ont. Sup. Ct.), citing Canada (Commissioner of Competition) v. Sears Canada, [2005] CCTD No. 1 (Comp.Trib.): “A representation is ‘misleading in a material respect’ where an ‘ordinary citizen would likely be influenced by that impression in deciding whether or not he would purchase the product being offered.’ A misleading representation is material where it is of ‘much consequence of [is] important or pertinent or germane or essential to the matter.’”
Commissioner of Competition v. Chatr Wireless Inc. and Rogers Communications Inc., Notice of Application (November 19, 2010): “… the Representations made by the Respondent are false and misleading in a material respect. Network reliability, including dropped call rates, is a material aspect of wireless telecommunication services and is a component of a consumer’s decision to purchase a particular wireless telecommunication service. The Representations are material because prospective customers would likely be influenced by the Representations in deciding whether to purchase wireless service from Chatr or a new entrant. The Representations mislead consumers to believe there is a meaningful difference in dropped call rates, when that is in fact not the case.”
Apotex Inc. v. Hoffman La-Roche Ltd. (2000), 195 D.L.R. (4th) 244 (Ont. C.A.): [Whether a representation is material will depend upon whether it is] “… so pertinent, germane or essential that it could affect the decision to purchase.”
R. v. Sears Canada Inc. (1989), 28 C.P.R. (3d) 248 (Ont. Dist. Ct.): “I am satisfied that the construction of the advertisement, as to whether it is false or misleading in material particular, is a question of law alone and, in construing the advertisement, the proper test to be applied is the meaning that would be discerned by the average person to whom the representation are directed: R. v. International Vacations Ltd. (1980), 56 C.P.R. (2d) 251, 124 D.L.R. (3d) 319, 59 C.C.C. (2d) 557 (C.A.). Moreover, if the ‘ads’ give rise to any ambiguity of construction or alternative interpretation that was not in contravention of s. 36(1)(a) of the Combines Investigation Act, R.S.C. 1970, c. C-23, that this would result in an acquittal: R. v. R.M. Lowe Real Estate Ltd. (1978), 39 C.P.R. (2d) 266 at p. 267, 40 C.C.C. (2d) 529 (Ont. C.A.).”
R. v. Simpsons Ltd. (1988), 25 C.P.R. (3d) 34 (Ont. Dist. Ct.), at para 16: “In R. v. Patton’s Place Ltd. Magistrate Carson, at page 16 says “… I think the word ‘material’ used here must be its normal meaning and that is, it is a representation which is calculate to, and in effect does, lead a person to a certain course of conduct because he believes the information put before him indicates that this would be advantageous to himself.’ I respectfully agree with that opinion.”
For more information, see: Canadian Misleading Advertising and Canadian Misleading Advertising FAQs.
Metadata.
Office of the Privacy Commissioner of Canada, Fact Sheet, “The Risks of Metadata”: “Metadata is usually defined as ‘data about data’ or ‘information about information’. Think of it as a hidden level of extra information that is automatically created and embedded in a computer file. An example that you may be familiar with is that of the label on a can of soup. The label contains, in a standardized, structured format, information about the contents of the can (e.g., the type of soup, who made it, the ingredients and nutritional value and so on). In a similar fashion, the metadata associated with a document (in the form of keywords, for instance) can provide information about the contents of the document. Whenever a document is created, edited or saved, metadata is added to a document. This information accompanies the document whenever it is sent in electronic form (e.g., as an attachment to an e-mail) to other groups or individuals, internally or externally to an organization. This metadata may contain potentially sensitive information that could be inadvertently disclosed to unauthorized individuals or groups.”
Minimum advertised price (MAP) programs (competition and advertising law term).
Practical Law Antitrust & Competition, Practice Note, Competition Issues for International Distribution and Supply Agreements: “Minimum advertised price (MAP) programs are another means of minimizing [resale price maintenance] risk in the US. However, because some international enforcers are less receptive to MAP policies than the US, counsel should carefully review and modify as necessary any MAP commitments in US distribution agreements before they are extended into other jurisdictions. MAP programs most commonly take the form of either: an agreement on what price may be advertised (thus avoiding an agreement on price itself) [or] unilateral policy on what prices are acceptable to advertise, coupled with a refusal to sell to those who do not abide by the policy.”
“Mini rules” / “short rules” (Canadian contest/sweepstakes law).
Canada’s federal Competition Act requires that certain disclosures be made when conducting “any contest, lottery, game of chance or skill, or mixed chance and skill, or otherwise [disposing] of any product or other benefit …” Key Competition Act requirements include: (i) disclosing the number and approximate value of prizes, (ii) disclosing the area (or areas) to which they relate and (iii) any fact that may materially affect the odds of winning. The Competition Act also prohibits contest organizers from “unduly delaying” the award of prizes. Based on these requirements, most contest organizers provide short rules / mini-rules in all point-of-purchase materials regardless of media (i.e., in all print, online and other electronic media), with long rules (i.e., official contest rules) available on request and commonly posted on the sponsor’s website. Point-of-purchase disclosure (short rules) commonly includes both the required statutory disclosure and other key contest elements. While short, and usually straightforward, it is important that the mandatory statutory disclosure be drafted precisely and correctly. It is also important that the timing for the launch of a contest and accompanying promotional materials ensure that the necessary disclosure is included in point-of-purchase and similar marketing materials where entrants first see a contest promoted.
For more information about Canadian contest/sweepstakes law, see: Contests, Contests and CASL, Contest Law FAQs, Contests and Social Media and Contest Law Tips.
For information about the Canadian contest/sweepstakes precedents (template rules) and checklists that we offer for sale, see: Canadian Contest Forms/Precedents.
Minors / “age of majority” (Canadian contest/sweepstakes law).
In many jurisdictions, minors (i.e., individuals under the age of majority in the relevant jurisdiction) cannot enter into legally binding contracts. As such, contest/sweepstakes sponsors commonly require that any winners of a contest that are minors have a parent or legal guardian agree to the contest terms on their behalf and enter into the contest winner release form. In trip/destination contests, contest sponsors commonly require that any travel companions of the winner also enter into a winner release form and have their parent or legal guardian complete a parent/guardian release form.
For more information about Canadian contest/sweepstakes law, see: Contests, Contests and CASL, Contest Law FAQs, Contests and Social Media and Contest Law Tips.
For information about the Canadian contest/sweepstakes precedents (template rules) and checklists that we offer for sale, see: Canadian Contest Forms/Precedents.
Misleading.
R. v. Stucky, 2006 CanLII 41523 (Ont. S.C.), at para 71: “What is clear from the cases is that whether or not a representation is misleading [for the purposes of section 52 of the Competition Act] will be determined from a consideration of the representation in context and from the perspective of the average person to whom it was directed. In this respect, it is not accurate to say that the target of the promotion would simply be the ‘… ignorant, unthinking and credulous; nor … the skeptical who have learned by bitter experience to beware …’ Put otherwise, the facts of each case, which includes a consideration of the intended audience, must govern and the representation is to be considered from both a literal and general impression point of view.”
For more information, see: Canadian Misleading Advertising and Canadian Misleading Advertising FAQs.
Misleading advertising.
Competition Bureau, Ensuring Truth in Advertising, Misleading Advertising and Labelling: “The misleading advertising and labelling provisions enforced by the Competition Bureau prohibit making any deceptive representations for the purpose of promoting a product or a business interest, and encourage the provision of sufficient information to allow consumers to make informed choices. The false or misleading representations and deceptive marketing practices provisions of the Competition Act contain a general prohibition against materially false or misleading representations. They also prohibit making performance representations which are not based on adequate and proper tests, misleading warranties and guarantees, false or misleading ordinary selling price representations, untrue, misleading or unauthorized use of tests and testimonials, bait and switch selling, double ticketing and the sale of a product above its advertised price. Further, the promotional contest provisions prohibit contests that do not disclose required information. The Consumer Packaging and Labelling Act, Textile Labelling Act and Precious Metals Marking Act all contain prohibitions regarding false or misleading representations. They also require certain labelling or marking information aimed at assisting consumers in making informed purchasing decisions.”
R. v. David Stucky, 2006 CanLII 41523 (Ont. S.C.): “The essential elements of the [offence of misleading advertising under section 52 of the Competition Act] pre- and post-amendment, are: (a) that representations were made; (b) for the purpose of promoting, directly or indirectly the business interest specified in the indictment; (c) to the public; (d) the representations were false or misleading; (e) in a material respect.”
For more information, see: Canadian Misleading Advertising and Canadian Misleading Advertising FAQs.
Mobile advertising games.
A mobile game advertising term.
Canadian Marketing Association (CMA): “Mobile advertising games represents the breed of mobile advertising where the brand itself creates a mobile game solely for their marketing strategies. An example of this type of mobile advertising is New Balance’s brand – Brine – lacrosse game app. Brine Shootout app features a game where users flick and slide their finger across their mobile screen to simulate a shot. Brine’s objective with this app was to engage lacrosse players, as well as introduce their line of products, increase brand presence and encourage brand loyalty. Based upon merits and achievements in the app, users are able to unlock and claim real prizes.”
Mobile games sponsorships.
A mobile game advertising term.
Canadian Marketing Association (CMA): “Mobile games sponsorship appeals to brands, as their presence within the app allows the brands to reach their targeted audience; with hopes of leveraging the association of a positive gaming experience. Subway, Samsung and New Balance are some of the many brands that have entered the mobile space via sponsorships, as part of their strategy to increase brand awareness, brand presence and purchase intent. Sponsorships also allow brands to maximize on the opportunities for message delivery. In the situation of a message being broadcast when a user is in a passive state, while leisurely playing a game, messaging is more likely to be received well by the user.”
Mobile in-game advertising.
A mobile game advertising term.
Canadian Marketing Association (CMA): “Mobile in-game advertising refers to the placement of advertising, brands and associated messages within mobile games. The advertising can be found anywhere within the game that is visible to the user during game play. Static banners, interactive ads and interstitial ads are all examples of the types of ad spaces found in mobile games.”
Multi-level marketing plan.
Competition Act, subsection 55(1): “… a plan for the supply of a product whereby a participant in the plan receives compensation for the supply of the product to another participant in the plan who, in turn, receives compensation for the supply of the same or another product to other participants in the plan.”
See also Competition Bureau, Truth in Advertising, Multi-level Marketing: “Multi-level marketing is a plan for the distribution of products whereby participants earn money by supplying products to other participants in the same plan. They, in turn, make money by supplying the same or other products to other participants. Operators of, and participants in, legitimate multi-level marketing plans should disclose: the different levels of earnings or compensation received by participants in the plan; the amount of money earned by a typical participant; and the time and effort required to reach specific levels of income.”
The Competition Act makes it a criminal offence for operators and participants of multi-level marketing plans to make compensation claims to prospective participants unless certain disclosure requirements are met – i.e., “fair, reasonable and timely” disclosure within the knowledge of the person making the claim is made to prospective participants of the: (i) actual or (ii) likely compensation to be received in the plan (based on a number of prescribed factors). The penalties for contravening the multi-level marketing provisions of the Act include unlimited fines (i.e., in the discretion of the court), imprisonment for up to five years, or both. Multi-level marketing plans that constitute pyramid selling schemes under the Act are illegal. In other words, while multi-level marketing plans are legal provided certain prescribed disclosure requirements are met, pyramid selling as defined in the Act constitutes a criminal offence.
Competition Bureau, Enforcement Guidelines, Multi-level Marketing Plans and Schemes of Pyramid Selling: “Subsection 55(1) of the Act defines an MLM plan as a plan in which a participant receives compensation for the supply of a product to another participant, who in turn receives compensation for the supply of the same or another product to yet another participant in the MLM plan. Subsections 55(2) and 55(2.1) set out certain obligations relating to compensation disclosure by operators of and participants in MLM plans. Failure to comply with these obligations is subject to criminal penalties as set out in subsection 55(3). The full text of these provisions is set out in Appendix A to this bulletin.”
Canadian Consumer Handbook: “Multi-level marketing (MLM) is a system for selling products in which participants get paid for selling products to other participants who, in turn, are paid for selling the same products to yet more participants. This type of marketing is legal in Canada when the plan does not contravene the Competition Act. Referral selling, matrix marketing and binary systems are all similar types of multi-level marketing plans, though some may be illegal under the Criminal Code, the Competition Act and some provincial and territorial laws. Under the Competition Act, MLM plans that make claims about potential compensation must also disclose the amount of compensation typical participants in the plan earn. Pyramid selling is an MLM plan that incorporates the following deceptive practices, which make it a criminal offence under the Competition Act: participants pay money for the right to receive compensation for recruiting new participants; a participant is required to buy a specific quantity of products, other than at cost price for the purpose of advertising as a condition of participation; selling unreasonable amounts of inventory to participants; having an unreasonable product return policy. Pyramid selling is also a criminal offence under the Criminal Code.”
Federal Government, Consumer Information website (www.consumerinformation.ca): “Multi-level marketing is a system for selling products whereby participants are paid for selling products to other participants who, in turn, are paid for selling the same products to yet more participants. This type of marketing must comply with the Competition Act. Pyramid selling is a type of multi-level marketing that is a criminal offence under the Competition Act due to the following deceptive practices: paying money to those who recruit new members (who also pay money for the same right); requiring new recruits to buy products as a condition of participation; selling unreasonable amounts of inventory to participants; and having an unreasonable product return policy. Pyramid selling is also a criminal offence under the Criminal Code of Canada.”
“Multi-level marketing (MLM) is a legal business model for selling goods and services. Participants in an MLM plan earn compensation from supplying products to other participants or customers. However, it’s illegal for operators or participants in an MLM plan to make any compensation claims, unless the claims include fair and reasonable disclosure of the amount of money likely to be earned by a typical participant.” [Section 55, Competition Act]. For more information, see: Competition Bureau, Misleading representations and deceptive marketing practices.
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We are a Toronto based Canadian competition and advertising law firm that helps clients in Toronto, across Canada and the United States practically navigate Canada’s advertising and marketing laws and offers Canadian advertising/marketing law services in relation to print, online, new media, social media and e-mail marketing.
Our Canadian advertising/marketing law services include advice in relation to anti-spam legislation (CASL), Competition Bureau complaints, the general misleading advertising provisions of the federal Competition Act, Internet, new media and social media advertising and marketing, promotional contests (sweepstakes) and sales and promotions. We also provide advice relating to specific types of advertising issues, including performance claims, testimonials, disclaimers, drip pricing, astroturfing and native advertising.
For more information about our services, see: services
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