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May 16, 2013

There used to be a saying that nothing in life is free.  In Australia, it seems, there are no free TVs, or at least not that many.  In a curious case posted by the Australian ACCC earlier today (or was that yesterday?), it announced that it had settled an allegedly false free TV promotional offer with Australian cable company FOXTEL.

According to the ACCC, FOXTEL ran a promotion on, naturally TV, claiming that customers who subscribed to a 12 month plan would receive a free 22 inch neoniQ TV within ten days of cable service installation.  As it turns out, 8,400 people subscribed but the offer was limited to 1,500 free TVs, with a large number of subscribers never receiving the promised TVs.

It seemed to me in reading this case that it also illustrated a few points relevant in Canada, including ensuring that advertising claims are both true and not misleading (e.g., through banner or headline claims that cannot stand on their own or may be contradicted by disclaimers), the importance of including any important conditions or limitations in clear language and in close proximity to primary claims (e.g., limitations on promotional giveaways or other offers), and following through on promotional claims (e.g., that advertised claims are generally fulfilled, as well as ensuring that the award of promotional contest prizes are not unduly delayed and that reasonable quantities of products are available where “bargain price” type claims are made, as required by the Competition Act).

The Competition Bureau has on occasion challenged marketers for making allegedly false “free” claims, including Moores where the Bureau alleged that the retailer’s “buy one get one free” suit claims failed to adequately disclosing the fact that the offer applied to select designer suits only, Premier Fitness Clubs for allegedly making “free trial offer” claims where there were additional fees or contract requirements to qualify, and more frequently sweepstakes promoters for making false or deceptive “free” prize claims.

Also, while the Bureau has from time-to-time expressed its enforcement policy on the use of the term “free” in advertising, one its most recent policies, expressed in its Corporate Compliance Programs Bulletin and Misleading Advertising Pamphlet is that the price of a product or service should not be increased to cover the cost of a “free” product (see e.g., here and here).

At the end of the day, the basics around “free” claims in Canada are pretty simple: if you say you’re going to do it, do it; if there are limited numbers, disclose that; don’t make banner “free” claims if there are additional fees; and don’t increase the price of products to cover giveaways.

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