November 13, 2014
Performance claims remain a popular advertising strategy for many brands. These can include statements about a product’s speed, reliability or other performance. Performance claims in Canada, however, are subject to both the “general misleading advertising” sections of the Competition Act (Act) and a stand-alone performance claims provision (section 74.01(1)(b) of the Act).
The importance of ensuring that adequate and proper tests have been performed before product performance claims are made was highlighted again with the announcement earlier today by the Competition Bureau (Bureau) that Bauer has agreed to stop make certain claims in relation to its RE-AKT hockey helmets (and donate $500,000 to charity). Under a consent agreement (i.e., settlement), Bauer has also agreed to remove or modify the challenged claims and adopt an enhanced corporate compliance program.
The Bureau had taken issue with claims (both words and images) that, in the Bureau’s view, created the impression that Bauer’s helmets offered players protection from concussions caused by rotational impacts. While Bauer had in fact conducted testing, the Bureau’s position was that it was not sufficient to support Bauer’s claims.
While the announcement is brief, this case illustrates that the Bureau continues to challenge performance claims that, among other things, are not in its view based on adequate testing (or supported by testing at all). The Bureau has challenged performance claims in a wide variety of industries over the years, including in relation to weight loss products, clothing, fuel saving devices, chimney cleaning products, UV ray protection, anti-corrosion devices, disease cures, tanning and wireless, among others.
While the case involves a settlement, and the Bureau’s allegations were not established in court, it is also a reminder of some of the key aspects of the law governing performance claims in Canada. These include:
1. Performance claims are not prohibited per se by the Act.
2. They are, however, subject to both the general misleading advertising and specific performance claims provisions of the Act.
3. The general impression of a claim, as well as its literal meaning, must be considered (which was particularly relevant in this case, given that the Bureau took issue with the general impression of both print claims and images).
4. Testing must be conducted before performance claims are made.
5. The onus, if challenged, is on the person making the claim to show that it is based on adequate and proper testing. (And as this case illustrates, not all testing will be found to support a claim or be acceptable to the Bureau in the event of a challenge.)
6. What is “adequate and proper” testing is factual, will vary and the Competition Tribunal and courts apply a non-exhaustive list of factors to evaluate testing.
In addition, the Bureau highlighted a few additional key performance claim related considerations in making the announcement earlier, including: testing should apply in all places where products are sold (that is, in different markets); results should be able to be repeated; and testing may be problematic where inadequate to substantiate claims (which appeared to be a key issue in this case).
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