June 29, 2010
The Competition Bureau announced today that Zellers had agreed to take action to correct an allegedly misleading promotion. According to the Bureau, Zellers Inc., owned by the Hudson’s Bay Company, has agreed to take steps to address the Bureau’s view that a Zeller’s misleading savings card promotion violated the Competition Act.
In its news release, the Bureau stated:
“Zellers was promoting the savings cards, valued at $10, with the purchase of the movie Avatar on DVD or Blu-Ray. One of the conditions associated with the savings card was a $50 minimum purchase in order to redeem the savings card. The Bureau’s review revealed that this condition was omitted from the advertising for this promotion and only disclosed after consumers made their initial purchase. Terms and conditions associated with these types of promotions that are not fully disclosed to consumers before the time of purchase raise concerns under the false or misleading representations provisions of the Competition Act.”
The Bureau also stated:
“Misleading pricing representations remain a key concern for the Bureau. When making their purchasing decisions, consumers have the right to expect that information about pricing is truthful and accurate. Otherwise, consumers are hurt and rival businesses are put at an unfair competitive disadvantage.”
In reaching a resolution with the Bureau, Zellers has agreed to take steps to resolve the Bureau’s concerns including: (i) customers who present a $10 savings card, or a sales receipt for the movie Avatar purchased between April 22 and 24, 2010, will receive a $10 credit with no minimum purchase required; and (ii) the redemption period will be extended to August 6, 2010.
This recent case illustrates that false or misleading representations under the Competition Act, as well as other forms of deceptive marketing, remain enforcement priorities for the Bureau. In this regard, unlike a number of other jurisdictions, the “consumer protection” mandate is a significant part of the Bureau’s focus.
On a practical level, this recent case also illustrates two other points. First, that the Bureau continues to be interested in allegedly false or misleading representations engaged in by high profile retailers (some of the Bureau’s recent misleading advertising cases have involved, among others, Reitmans, Forzani and Suzy Shier). Second, that it is important to get the details right (and to disclose them) – i.e., to clearly disclose important conditions and limitations in marketing claims, particularly those relating to price.
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I am a Toronto competition and advertising lawyer offering business and individual clients efficient and strategic advice in relation to competition/antitrust, advertising, Internet and new media law and contest law. I also offer competition and regulatory law compliance, education and policy services to companies, trade and professional associations and government agencies.
My experience includes advising clients in Toronto, Canada and the US on the application of Canadian competition and regulatory laws and I have worked on hundreds of domestic and cross-border competition, advertising and marketing, promotional contest (sweepstakes), conspiracy (cartel), abuse of dominance, compliance, refusal to deal, pricing and distribution, Investment Canada Act and merger matters. For more information about my competition and advertising law services see: competition law services.
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