The Competition Bureau (the “Bureau”) and other Canadian regulatory authorities have markedly increased their enforcement of misleading advertising in the past several years. The following is a brief summary of some of the penalties imposed (or agreed to pursuant to settlement agreements) in Canadian advertising and marketing law cases.
Misleading Advertising
Bell Canada pays $10 million AMP. On June 28, 2011, the Bureau announced that Bell Canada agreed to stop making allegedly misleading claims regarding the prices of some of its services and pay an administrative monetary penalty (“AMP” – essentially a civil fine) of C $10 million, the maximum penalty for misleading advertising under the amended Competition Act (the “Act”). The Bureau challenged the accuracy of price claims made by Bell, as well as alleged hidden fees and fine-print disclaimers. The Bureau’s concerns were based, among other things, on services that were not available at the advertised prices, including for Bell’s home phone, Internet, satellite TV and wireless services.
AMPs imposed in job search service case. In late 2010, the Competition Tribunal imposed AMPs of C $20,000 and $10,000 against parties in Canada (Commissioner of Competition) v. Premier Career Management Group Corp. for making misleading claims in relation to a job search service (following a Federal Court of Appeal decision reversing an earlier Tribunal decision finding the claims were not made “to the public”).
For more about Canadian misleading advertising laws see: Misleading Advertising and Canadian Advertising & Marketing Law.
Performance Claims
Bureau challenge of Rogers performance claims – seeks C $10 million AMP. The Bureau is currently challenging Rogers Communications for allegedly making false performance claims in relation to its “Chatr” cell phone brand (in particular, claims that Rogers’ brand had fewer dropped calls than competing new entrants). The Bureau is seeking a court order for Rogers to cease the conduct, a C $10 million AMP, restitution for consumers and publication of a corrective notice.
Bureau negotiates settlement with Canadian Nivea distributor over performance claims. On September 7, 2011, the Bureau announced a settlement with Nivea’s Canadian distributor, Beiersdorf Canada Inc., relating to allegedly false or misleading performance claims. The Bureau took issue in this case with claims suggesting that the use of skin cream could lead to weight loss. Under the negotiated consent agreement, Beiersdorf agreed to pay a C $300,000 AMP, refund Canadian customers and remove its products from Canadian shelves.
For more about the rules governing performance claims in Canada see: Misleading Advertising and Performance Claims.
Deceptive Telemarketing
Albertans sentenced to jail time for cross-border deceptive telemarketing. On August 30, 2011, the Bureau announced that five Alberta individuals were convicted and sentenced for deceptive telemarketing under the Act.
Canadian telemarketer receives a two-year prison sentence. On October 3, 2011, the Bureau announced that a deceptive telemarketer was sentenced to two years in prison for a deceptive telemarketing scheme relating to the sale of business directories. This recent telemarketing case shows that the criminal deceptive telemarketing and misleading advertising provisions of the Act remain top enforcement priorities for the Bureau. The case also illustrates that the Bureau is increasingly seeking penalties against individuals. The Bureau has brought proceedings and sought penalties in a number of deceptive telemarketing cases in the past several years, many of which have involved cross-border marketing of business directories to U.S. and other international companies.
For more about the rules governing telemarketing in Canada see: Telemarketing.
Other Key Recent Developments
Some of the other key recent and anticipated advertising law developments include new Canada Transportation Act regulations regulating “all-in-price” airline advertising, new online tracking guidelines issued by the federal Privacy Commissioner, industry self-regulation of behavioural advertising, a new International Do Not Call Network co-chaired by the CRTC, sweeping new federal anti-spam legislation and general increased regulatory scrutiny of advertising and marketing in Canada.
(See: Air Canada Announces “All-in Price” for Airfares, Privacy Commissioner Issues New Online Behavioural Advertising (Tracking) Guidelines, Interactive Advertising Bureau of Canada Announces New Self-regulation of Behavioural Advertising, CRTC and 12 International Enforcement Agencies Form International Do Not Call Network, Legislative Update – Canada’s New Anti-spam Law, Is the Price Right? Increased Regulatory Scrutiny and Class Actions for Representations Involving Price, Commissioner of Competition Speech Highlights Enhanced Competition Bureau Enforcement, Commissioner of Competition Addresses Current Enforcement Priorities in Two Wide-ranging Talks in Vancouver.)
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I am a Toronto competition/antitrust lawyer and advertising/marketing lawyer who helps clients in Toronto, Canada and the US 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.
My 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. I 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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