Archive for the 'Competition Bureau' Category
In a recent case that I can only describe as bizarre, the U.S. Federal Trade Commission has announced that it has filed false advertising charges against the marketers of “Your Baby Can Read!”, a learning program for toddlers that, according to the FTC, was “widely touted” on the Internet teach young adults (er babies actually) to read.
In making the announcement, the FTC said:
“The FTC complaint charges Your Baby Can, LLC, its former CEO, and the product’s creator with false and deceptive advertising, for claims in ads and product packaging that the program could teach infants and toddlers to read and that scientific studies proved the claims. The complaint also charges company principal and product creator Robert Titzer, Ph.D, with making deceptive expert endorsements. Your Baby Can and Titzer represented that the program taught children as young as nine months old to read; gave children an early start on academic learning, making them more successful in life than those who didn’t use it; and that scientific studies proved these claims, according to the complaint.”
The defendants in this case, it seems, were also industrious marketers, marketing their product in various channels including online (YouTube, Twitter and Facebook), television (infomercials and cable ads on Lifetime, Discovery Kids, Disney DX, Cartoon Network and Nicekelodeon) and retail (including Wal-Mart, Kmart, Walgreens and Toys “R” Us).
With all the recent buzz in Canada around disclaimers, the general impression test and performance claims (including the recent Bell, Nivea, Richard v. Time, Yellow Page Marketing and ongoing Rogers cases), this one caught my eye as a rather perfect storm of allegedly false claims, underlying scientific testing with some expert endorsements thrown in for good measure.
The U.S. Federal Trade Commission has announced that a Puerto Rican pharmacy cooperative has settled price-fixing charges in relation to allegations that pharmacy owners, through a cooperative, had negotiated, entered into and implemented agreements among its member pharmacies to fix the prices on which they contracted with insurers and pharmacy benefit managers.
In making the announcement, the FTC said that the pharmacy cooperative’s actions over the past five years had led to higher prices for Puerto Rico’s health care consumers, and that the cooperative consisted of approximately 300 pharmacy-owner members owning more than 350 pharmacies in Puerto Rico (about one-third of Puerto Rico pharmacies).
Key issues raised by the FTC included collective negotiations by the pharmacy cooperative with more than 10 payers over reimbursement rates, execution of seven “master contracts” on behalf of member pharmacies and threats of collective refusals to supply by cooperative members to achieve higher negotiated rates for the supplying pharmacies.
The proposed consent order in this case includes terms to prohibit the cooperative from entering into or facilitating agreements between or among pharmacies to: (i) negotiate on behalf of any pharmacy with any payer, (ii) refuse to deal or threaten to refuse to deal with any payer, (iii) include any term, condition or requirement upon which any pharmacy deals, or is willing to deal, with any payer, including price terms and (iv) not to deal individually with any payer (or not to deal with any payer) other than through the pharmacy cooperative.
This recent association case caught my eye given that there have been a number of Canadian joint negotiation cartel cases involving associations.
From the Canadian Council of Chief Executives (CCCE):
“On September 24-25, 2012, the Canadian Council of Chief Executives will host “Canada in the Pacific Century”, a conference bringing together leaders from business, government, academia, and other key groups to discuss Asia’s rise and the implications for Canada.”
For the updated Agenda see:
“Emerging technologies, new platforms and evolving digital tools are changing the way audiences consume media, connect with brands and ultimately make purchase decisions. With the rise of smartphones, tablets and social media, today’s empowered consumers are seeking out information, interacting with brands and sharing their experiences. The old path-to-purchase model worked well with traditional media and brick-and-mortar stores: it was linear and predictable, starting with an ad and ending with an in-store purchase. But today’s digital path-to-purchase is non-linear and dynamic, with multiple touch points and interactions: consumers are doing everything from downloading product reviews while they’re shopping, to holding up their smartphones on a street to see where the best restaurants are. It’s a seismic shift that is reshaping the marketing and media landscape.
The 2012 Digital Day Conference, presented by Marketing magazine and the Canadian Marketing Association, will explore how best to navigate this fast-changing world and reach audiences at key points along the new purchase-decision journey. The focus will be on real-world examples, creative solutions and inspiring next steps in social media, mobile, online video, gaming, e-commerce, content creation and more.
Join us for a full day of keynote presentations, workshops and panel discussions featuring media, advertising and marketing leaders from across Canada and around the globe.”
In a curious twist in the growing dispute between the Alberta and British Columbia governments, stakeholders and individuals on either side of the environmental debate, with some political seesawing by the Federal Government thrown in, a British Columbia resident has recently alleged that Enbridge promotional videos for the proposed Northern Gateway pipeline were misleading.
According to media reports, the Vancouver Island resident filed a misleading advertising complaint with the Competition Bureau alleging that Enbridge promotional videos for its proposed Northern Gateway pipeline project omitted more than 1,000 square kilometers of islands along the proposed Northern Gateway tanker route (see e.g.: BC woman files complaint against Enbridge for misleading promotional videos). According to the complainant, Enbridge allegedly “distorted the maps in its promotional videos to erase numerous islands and twisting passages so that [the] tanker route appears much safer than it is”.
To some, it won’t be intuitively obvious why the Competition Act should apply, if true, to omissions of some BC terrain from videos for a pipeline – after all, Enbridge is not selling pipelines or tanker routes to Canadians.
The Competition Act does, however, cast a fairly wide net in terms of what may be false or misleading and a wide variety of claims have been challenged over the years under the “general misleading advertising” provisions of the Act, which prohibit not only false or misleading claims to market products (i.e., goods or services) but also “any business interest”.
In this regard, in one recent high-profile case, Commissioner of Competition v. Yellow Page Marketing, the Ontario Superior Court both reiterated that the Competition Act applies to false or misleading claims made to promote business interests and also that the phrase “business interest” should be liberally interpreted:
“Similar misrepresentations appear in the respondents’ domain names, invoices, reminder notices and letters sent by the respondents. Although the respondents argue that collection efforts after the contract had been completed were not to increase sales, the relevant provision of the Competition Act refers to promoting ‘any business interest’ and not just sales. The phrase ‘business interest’ must be given a wide meaning and collecting money, and threats made in relation to collection efforts, constitute promotion of the respondents’ business interests.”
One of the most colorful, if somewhat older, cases in which the misleading advertising provisions of the Act were invoked to challenge claims in relation to business interests was the Bre-X case. Plaintiffs in Bre-X claimed that that the publication of resource calculations, other data, reports and studies relating to Bre-X Mineral’s Indonesian mining assets breached the criminal misleading advertising provisions of the Competition Act, thereby giving rise to a civil cause of action.
The U.S. Word of Mouth Marketing Association (“WOMMA”) published earlier today a new edition of its Social Media Marketing Disclosure Guide (see: The WOMMA Guide to Disclosure in Social Media Marketing).
From WOMMA:
“As part of WOMMA’s continuing effort to advance and advocate ethical word of mouth, WOMMA has updated our social media marketing disclosure guide that highlights best practices and responsibilities of using social media.
The WOMMA Ethics Code is the cornerstone for prudent practices in the WOM industry. In light of the December 2009 effective date of the Federal Trade Commission (FTC) Guides Concerning the Use of Endorsements and Testimonials in Advertising, WOMMA leadership responded to member demand for additional disclosures for social media marketing. This is a continuation of an effort started in 2008 when WOMMA began formalizing best practices by engaging industry leaders, members, nonmembers, academics and consumers.
These guidelines are considered living documents and are updated on occasion to reflect changes in regulation and in the marketplace.
…
Scope of WOMMA Social Media Disclosure GUIDE
As social media is ever-changing, the WOMMA Social Media Disclosure Guide will be a living document – continuing to be refined to reflect evolving industry best practices. Note also that many WOMMA programs are hybrid in nature and are developed to incentivize traditional (offline) as well as digital and social initiatives. While the mechanics of these types of conversation might be different, the expectation is that such communications should be consistently ethical and credible, both in the online and offline environment. Key online platforms covered in this Guide include, but are not limited to blogs (eg., Blogger, WordPress), microblogs (e.g., Twitter, Pinterest), online comments (e.g., Disqus), social networks (e.g., Facebook, LinkedIn, Bebo, Hi5), video sharing websites (e.g., YouTube, Vimeo), photo sharing websites (e.g., Flickr, Picasa, Pinterest), curated content (Storify.com, Paper.li, Scoop.it), sponsored content, affiliate networks, referral networks and podcasts. Note, platform names are for example only and may be updated from time to time as new platforms and types emerge or evolve.
We are pleased to have re-launched a new version of our Canadian Advertising and Marketing Law blog, which includes overviews of the key areas of Canadian advertising and marketing law, an Advertising Alphabet (a glossary of key Canadian advertising and marketing law terms) and recent Canadian advertising and marketing law news and trends.
To visit our new site see: Canadian Advertising & Marketing Law
Canadian advertising and marketing law is rather active just now – current and recent cases include the Rogers performance claims case (involving challenges to the performance claims provisions of the Competition Act), Richard v. Time (a deceptive contest mail-out case in which the Supreme Court of Canada considered the meaning of the “general impression test” for the purposes of the Quebec Consumer Protection Act), the Bell advertising case (which involved allegations by the Competition Bureau that certain price claims by Bell were false or misleading, and not cured by disclaimers) and the landmark Yellow Pages case (in which over C $9 million in penalties were ordered to be paid by companies and individuals involved in marketing claims ostensibly asking companies to confirm contact information in fax marketing, when in fact fine print disclaimers signed companies new contracts with significant fees). There has also been a considerable amount of sectoral regulation activity, including in the airline and cell phone industries.
I am pleased to be speaking at the Canadian Bar Association’s and Canadian Corporate Counsel Association’s upcoming CBA Canadian Legal Conference in Vancouver on a panel on August 13th: “What In-house Counsel Need to Know About Recent Competition Law Developments”. From the Canadian Bar Association and Canadian Corporate Counsel Association (CCCA):
“Canada’s competition and foreign investment laws are being enforced more vigorously than ever. The Competition Bureau has broad powers allowing them to investigate conduct that might have an anti-competitive impact on the Canadian marketplace, and investigations can involve high-stakes consequences for companies including public stigma, civil or criminal penalties, or unneeded complications arising in the middle of a strategic merger. Private and class actions are also increasingly prevalent in Canada. Hear about recent trends and learn practical tips for spotting issues and minimizing potential liability from experienced in-house and external counsel who will discuss compliance, criminal developments, private actions, mergers and advertising and marketing law developments.”
My presentation will be on recent misleading advertising law developments and trends (“Misleading Advertising Trends & Tips”), with a PowerPoint presentation and paper highlighting recent cases including Rogers, Bell, Yellow Pages, Richard v. Time and best practices for in-house counsel.
Templates/precedents and checklists to run promotional contests in Canada
Templates/precedents and checklists to comply with Canadian anti-spam law (CASL)
