January 7, 2022
On January 5, 2022, the Competition Bureau (Bureau) obtained a Federal Court production order to advance its ongoing investigation into weight loss performance claims made by NuvoCare Health Sciences Inc. (NuvoCare) relating to its WeightOFF Max!, Forskolin+ and Forskolin Nx natural health products. This follows a May 2020 temporary consent agreement between the Bureau and NuvoCare prohibiting the company from making certain weight loss claims pending completion of the Bureau’s investigation.
In a March 2020 announcement relating to its investigation of NuvoCare, the Commissioner of Competition said:
“If performance claims aren’t tested and true, then consumers looking for help to lose weight or improve their health aren’t getting what they’re paying for. Health and online marketing are priority sectors for the Competition Bureau, and we’ll continue to do everything in our power to protect consumers”.
Product performance claims themselves are not prohibited in Canada. However, sections 52 and 74.01(1)(a) of the Competition Act, the “general misleading advertising provisions”, prohibit materially false or misleading advertising claims to promote any product or service and are broad enough to apply to false or misleading performance claims.
In assessing whether a representation is false or misleading in any material respect, both its literal meaning and the general impression conveyed (e.g., impressions conveyed through images, logos or packaging and labelling) is relevant.
The Competition Act also contains a standalone civil performance claims section (74.01(1)(b)), under which product performance claims must be supported by adequate and proper testing (the onus of which is on the person making the claim). Any testing or verification must also be conducted before a performance claim is made (i.e., it is not sufficient to be able to substantiate a performance claim after it has been made).
Under the general criminal misleading advertising provision (section 52), private plaintiffs that have suffered loss or damage as a result of a false or misleading claim may also commence private actions or class actions under section 36 of the Competition Act.
Some common types of performance claims include those relating to the speed, reliability or sales performance of a product, performance claims in comparative advertising (e.g., where one firm’s product’s performance is being compared to a competing brand) and claims relating to preferences or perceptions. Performance claims can also include false or unsubstantiated testimonials from, for example, influencers, performers and sponsors who have no adequate and proper testing to support their claims.
The Bureau has released guidelines regarding false or misleading advertising and performance claims. Some of the general performance claims related guidance that the Bureau has provided includes the following: (i) don’t make a performance claim unless you can prove it, even if you think it is accurate; testimonials usually do not amount to adequate proof; (ii) don’t use the results of product performance tests and/or testimonials in your advertising unless you are authorized to use them; and (iii) if authorized to use product performance tests and/or testimonials in your advertising, don’t distort test results or the scope of testimonials.
For some of our posts about Canadian performance claims cases and Bureau guidance, see: New Competition Bureau Guidance for Performance Claims and Influencer Marketing, Hockey Helmet Performance Claims Case Illustrates Competition Act Compliance Requirements, Product Performance Claims: Increased Risk in Making Unfounded Claims During COVID-19 Outbreak, Canadian Court Takes Measured Approach to Imposing $500,000 Civil Fine Against Rogers in Performance Claims Case and Rogers Largely Wins Landmark Chatr Misleading Advertising and Performance Claims Case.
For more information on product performance claims under Canada’s Competition Act, see: Canadian Advertising Law, Advertising FAQs, Misleading Advertising, Performance Claims and Testimonials and Endorsements.
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