> Hockey Helmet Performance Claim | CANADIAN COMPETITION LAW

Categories

Archives


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).

********************

SERVICES AND CONTACT

We are a Toronto based competition and advertising law firm offering business and individual clients efficient and strategic advice in relation to competition/antitrust, advertising, Internet and new media law and contest law. We also offer competition and regulatory law compliance, education and policy services to companies, trade and professional associations and government agencies.

Our experience includes advising clients in Toronto, across Canada and the United States on the application of Canadian competition and regulatory laws and we 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 and pricing and distribution matters. For more information about our competition and advertising law services see: competition law services.

To contact us about a potential legal matter, see: contact

For more information about our firm, visit our website: Competitionlawyer.ca

Comments are closed.

    buy-contest-form Templates/precedents and checklists to run promotional contests in Canada

    buy-contest-form Templates/precedents and checklists to comply with Canadian anti-spam law (CASL)

    WELCOME TO CANADIAN COMPETITION LAW! - OUR COMPETITION BLOG

    We are a Toronto based competition, advertising and regulatory law firm.

    We offer business, association, government and other clients in Toronto, Canada and internationally efficient and strategic advice in relation to Canadian competition, advertising, regulatory and new media laws. We also offer compliance, education and policy services.

    Our experience includes more than 20 years advising companies, trade and professional associations, governments and other clients in relation to competition, advertising and marketing, promotional contest, cartel, abuse of dominance, competition compliance, refusal to deal and pricing and distribution law matters.

    Our representative work includes filing and defending against Competition Bureau complaints, legal opinions and advice, competition, CASL and advertising compliance programs and strategy in competition and regulatory law matters.

    We have also written and helped develop many competition and advertising law related industry resources including compliance programs, acting as subject matter experts for online and in-person industry compliance courses and Steve Szentesi as Lawyer Editor for Practical Law Canada Competition.

    For more about us, visit our website: here.