February 16, 2014
When I deliver competition compliance seminars and talk to industry groups, I often discuss the fact that imprisonment is one possible criminal penalty under the Competition Act (though is, somewhat curiously, more commonly imposed for deceptive advertising than for price-fixing or other criminal competition law conduct). While that may soon change with the recent elimination of conditional sentences for cartel offences (e.g., price-fixing and other per se illegal agreements between competitors) and bid-rigging, several days ago the Competition Bureau announced that a Canadian court has once again imposed a prison sentence for misleading advertising.
In particular, an Alberta man has been sentenced to two-and-a-half years imprisonment for being convicted of misleading advertising and breaching a court order (violating a registered consent agreement with the Bureau). For my original post on this case last June see: Competition Bureau cracks down on advertiser in first criminal breach of registered consent order case.
The case relates to materially false or misleading claims in relation to oil and gas job opportunities and was one in which the Bureau initially commenced civil misleading advertising enforcement (securing a consent agreement) and later criminal enforcement.
In making the announcement, the Bureau said:
“In June 2013, Mr. Hovila was found guilty under the Act of making materially false or misleading representations with respect to finding employment in the oil and gas industry on his former website www.oilcareer.com and of contravening a consent agreement registered with the Competition Tribunal.
This is the first time the Bureau has obtained a conviction for the contravention of a registered consent agreement. Mr. Hovila was convicted of breaching a 10-year consent agreement signed with the Bureau in 2006 regarding the same website and he 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. Consent agreements that are registered with the Tribunal have the same force and effect as a court order.”
This case is a bit of reminder that in Canada, misleading advertising can be enforced either on a civil or criminal track (with potential criminal fines and imprisonment on the criminal side). It is also an illustration of the Bureau’s efforts to more closely monitor settlements entered into with parties, including registered consent agreements (which have the force of court orders once registered and can lead to criminal penalties themselves when violated).
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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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