On June 23, 2022, Bill C-19 (the Budget Implementation Act, 2022, No.1) received royal assent, introducing sweeping amendments to Canada’s federal Competition Act.
These amendments include significant increases to the civil and criminal penalties under the Competition Act, new wage fixing and no poach conspiracy offences and expanding the civil abuse of dominance provisions to include more types of anti-competitive acts and increasing the potential penalties for abuse of dominance.
The amendments also include new civil and criminal prohibitions on drip pricing (i.e., failing to disclose the full price of a product or service until later in the purchase process or product checkout).
New Civil and Criminal Drip Pricing Prohibitions
The recent amendments to the Competition Act add new provisions on drip pricing to the criminal and civil provisions on false and misleading advertising under sections 52 and 74.01.
Drip pricing has been one of the Competition Bureau’s (Bureau) deceptive marketing enforcement priorities over the past several years, together with other top enforcement priorities including false or misleading performance claims, ordinary sale price (OSP) claims and misleading endorsements and testimonials.
In its recommendations for Competition Act reform, the Bureau had cited evidential challenges associated with the enforcement of drip pricing practices given the lack of specific prohibitions under the Competition Act.
In this regard, before the amendments in June 2022, drip pricing was only reviewable under the general criminal and civil misleading advertising provisions of the Competition Act (sections 52 and 74.01) if a pricing claim was either literally false or misleading (e.g., a portion of the total price was omitted in a headline marketing claim or the claim suggested that the stated price was the complete price with no other charges or fees).
The Bureau had commenced drip pricing enforcement in a number of industry sectors, including online event tickets and online car rentals. For some examples of the Bureau’s past drip pricing related enforcement, see: here, here and here.
These initial Competition Act amendments (a second round of amendments is anticipated including potential changes to Canada’s mergers efficiency defence) follow the Bureau’s submission on Examining the Competition Act in the Digital Era on February 8, 2022 and mark the most significant amendments since the last major overhaul of the Competition Act in 2009.
For more information about the 2022 amendments to the Competition Act, see: Sweeping Canadian Competition Act Amendments Passed.
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We are a Toronto based Canadian competition law and advertising law firm who helps clients in Toronto, 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.
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