Several days ago I posted several short notes discussing a few of the more interesting, frequent and important competition and advertising law questions I’ve received over the past few years (see: here and here).
Today I thought I would write one more with a few more “real life” competition/advertising law FAQs – i.e., not hypotheticals worked up by a lawyer but questions I’ve received over the past few years.
Like my first several posts, these questions reflect a few different basic (but important) aspects of Canadian competition and advertising laws, as well as the types of files I tend to work on.
A Few Interesting, Frequent and Important
Competition & Advertising Law Questions – Part III
Q: COMPETITION BUREAU INVESTIGATIONS: How does the Competition Bureau discover cases?: I get this question quite a bit. The answer is that the Competition Bureau can decide to start an investigation or formal inquiry for a number of reasons, including based on consumer or competitor complaints or based on its own market surveillance (e.g., the Bureau conducts periodic Internet sweeps looking for misleading advertising and monitors some media releases). There are also some very specific mechanisms in the Competition Act following which the Bureau must commence an inquiry where directed to do so by the Minister of Industry or based on what is referred to as a “six resident complaint” (a type of written complaint made by six Canadian residents, where some other requirements are met for the complaint).
Q: COMPETITION BUREAU COMPLAINTS: Are Competition Bureau complaints kept confidential?: I sometimes need to discuss this question with potential complainants who are, naturally, interested to know the extent to which their identity will be kept confidential following a complaint to the Bureau (particularly in the case of competition law issues involving suppliers or competitors, where a complaint could impact the complainant’s business, dealings with suppliers, etc.). The general answer to this question is that inquiries are conducted in private and the Competition Bureau takes confidentiality very seriously. The Bureau will often take steps to maintain confidentiality, such as by seeking sealing or other orders. There are also specific sections of the Competition Act (under section 29) that deal with the protection of information provided to the Bureau (both voluntarily and pursuant to compulsory process such as court order). Having said that, as I tell people who ask and clients, confidentiality under the Competition Act is not absolute. There are exceptions to confidentiality under section 29, including for such things as communicating to other law enforcement agencies or enforcement of the Competition Act, and information or identities may be disclosed (among other things) where Competition Tribunal or court proceedings are commenced or where the Bureau forwards a complaint to another law enforcement agency.
Q: CASL (ANTI-SPAM LAW): Is express consent required in all cases after CASL comes largely into force on July 1st?: No. I’ve had a few questions recently relating to whether the coming into force of CASL meant that express advance consent would have to be obtained for commercial electronic marketing in all cases. The short answer is that “consent” under CASL includes both express consent (which is required for some types of commercial electronic communications) and a number of categories of “implied consent” (in which case, such as for existing business relationships or certain B2B communications, consent will be implied). Having said that, as I’ve said before, express consent is king for CASL and does not expire unlike some categories of implied consent (unless consent is withdrawn).
Q: MISLEADING ADVERTISING: If a company’s name is misleading, will that be misleading advertising?: I also get this question a fair amount, where typically a competitor raises concerns about another competitor’s name. The answer is that under the misleading advertising provisions of the Competition Act virtually any type of “claim”, whether in print or oral, that is either false or misleading, made to promote a product or business interest and is likely to cause an average consumer to purchase a product may potentially violate the Act. It also does not matter that the name has been registered for corporate purposes, is trade-marked or otherwise subject to intellectual property protection, etc. Also, like Canadian misleading advertising law generally, even if a company name is not literally false, issues can still arise if a company name is misleading or the overall “general impression” is misleading.
Q: CONTEST LAW: Can a contest promoter legally change the rules mid-way through a contest?: As I’ve written a number of times before, contests in Canada tend to involve several areas of law including: contract law, competition law, advertising law, the Criminal Code (lottery provisions), privacy law, social media sites’ terms of use and, where marks, logos or 3rd party materials are reproduced, intellectual property laws. With the introduction of Canadian anti-spam law (CASL), contests that are marketed electronically (or involve e-mail) will also need to consider the potential impact of CASL. Because contests involve these several areas of law, the cancellation of a contest (or revision of terms) mid-way through a promotion can potentially raise a few types of issues, including questions of whether the “contest contract” with entrants has been breached, whether the terms and conditions as originally stated/promoted were false or misleading or in some cases whether a rule change will impact the odds of winning (which can be problematic). It is also worth noting that, if a contest includes Quebec, there are both general additional requirements that must be met in Quebec that include notification and approval of rule changes.
Q: CONTEST LAW: What’s the deal with giving away Apple products in contests?: I’ve had this question quite a number of times over the years. The short answer is that Apple has a fairly restrictive promotions policy (see: Use of Apple Products in Promotions) regarding the giveaway of certain of its products in promotions and the use of its marks and images. More specifically, Apple’s promotions policy prohibits the use of iPads or iPhones for promotional prizing and giveaways, the use of Apple logos or use of Apple corporate photography (e.g., Apple product photos). Apple’s promotions policy also requires that its specified trade-mark related disclaimer be included in promotions involving its products. As such, if you’re thinking of including an Apple product in a promotion, it is prudent to review Apple’s promotions policy beforehand and think about how it may affect your prizing/promotion.
Q: ASSOCIATIONS AND COMPETITION LAW: Can an association’s members agree on “reasonable prices” or other common pricing for some of their products?: I know most Canadian trade and professional associations know all too well that price-fixing is a criminal offence in Canada (under section 45 of the Competition Act). Having said that, I still receive questions from executives of associations regarding whether they can collectively agree on member pricing, such as minimum prices, maximum prices, ranges, etc. The short answer is that generally, unless a trade, professional or other association has legislative authority to do so – i.e., is a statutory regulator – price-fixing agreements or arrangements among competing companies is a criminal offence subject to fines and imprisonment. As such, if your association is thinking about getting involved in member pricing, adopting a fee guideline or tariff, etc., I strongly recommend you get some legal advice.
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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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