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June 25, 2013

Earlier today the Competition Bureau announced that an Alberta man has been found guilty of misleading advertising under the federal Competition Act and of a breach of a consent agreement under the Act (see: Alberta Man Found Guilty of Misleading Representations and Breach of Consent Agreement).  In making the announcement the Bureau said:

“Mr. Hovila was found guilty of making materially false or misleading representations with respect to finding employment in the oil and gas industry on his website at www.oilcareer.com and of contravening a registered consent agreement under the Act.  Sentencing will take place at a date to be set by the court.  This is the Bureau’s first conviction for the contravention of a registered consent agreement.

The penalties for making materially false or misleading representations to the public are a fine in the discretion of the court or a prison term of up to 14 years, or a combination of both.  The penalties for contravening a registered consent agreement under the Act are a fine in the discretion of the court or a prison term of up to five years, or a combination of both.

Mr. Hovila previously signed a consent agreement with the Bureau in 2006 regarding the same website and paid a $100,000 administrative monetary penalty.  At that time, Mr. Hovila admitted he had violated the Act’s civil false or misleading representations provision and agreed to cease the conduct and notify the public.  The consent agreement was registered with the Competition Tribunal and is valid for 10 years.  Consent agreements that are registered with the Tribunal have the same force and effect as a court order.

In 2011, Mr. Hovila was arrested for breach of consent agreement following investigation by the Bureau as part of its broader monitoring program regarding compliance with court orders, including registered consent agreements.”

Under Canada’s Competition Act, violation of a consent order made under the deceptive marketing practices or reviewable matters parts of the Act is subject to potentially unlimited fines (i.e., in the discretion of the court) or imprisonment for up to 5 years (on indictment) or fines up to $25,000 or imprisonment up to 1 year (on summary conviction).

In addition, the Bureau’s announcement earlier today indicates several things, including the fact that the Bureau takes false or misleading advertising seriously.  After cartels (i.e., price-fixing and other illegal agreements between competitors), misleading and deceptive advertising occupies a significant portion of the Bureau’s interest and resources.  The Bureau increasingly also both monitors Internet and other advertising and is increasingly taking steps to ensure that settlements (including consent agreements) are complied with.

For more information about the Competition Bureau’s enforcement powers and misleading advertising see: Competition Bureau Enforcement and Misleading Advertising.

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