Archive for the 'Marketing' Category
January 28, 2013
Earlier today, the CRTC published its anticipated draft Wireless Code, which will be subject to public comments until February 15, 2013 (see: Help Develop a Wireless Code). According to the CRTC, it has received 3,500 written comments and about 600 online comments, which were reviewed in preparing the new draft Code. This second phase of public comments will also include a public hearing to be held from February 11th to 15th in Gatineau.
In making the announcement CRTC Chairman Jean-Pierre Blais said:
“I would like to thank Canadians for having shared their candid views on wireless services. … The draft code is still very much a work in progress and intended to encourage more discussion. We are inviting Canadians to participate by telling us what they think of the working document. Once finalized, the wireless code will enable them to make informed decisions in a competitive marketplace.”
The draft Code has arisen as a result of growing consumer frustration with wireless contracts, terms of service, fees and disclosure, as well as a desire by industry members to have a single federal code, rather than multiple provincial regimes.
The draft Code addresses major topics including enforcement, contracts, fees (clarity of advertised prices, additional fees, etc.), repairs, unlocking devices and loss/theft. Some of the aspects of the new draft Code that caught my eye, which according to the CRTC is only “intended to stimulate debate and does not constitute a preliminary view” by the CRTC, include:
1. Conflict provisions benefiting consumers (i.e., contemplating that the new Code will co-exist with existing provincial legislation with consumers having the benefit of the most consumer-favorable provisions).
2. Cancellation rights for contracts agreed to by phone or online (allowing consumers to cancel agreements without penalties where they have not either received a copy of the contract or written terms conflict with phone/online sales terms).
3. Penalties that may include explanations/apologies for consumers, undertakings to take steps (or stop conduct) and monetary penalties of up to $5,000.
January 23, 2013
Steve Szentesi & Kevin Wright (Davis LLP)
Extract from a chapter to be published in CLEBC’s
Annual Review of Law & Practice – 2013
____________________
2012 was a busy year for Canadian competition and foreign investment law, with significant developments in all major areas including misleading advertising, mergers, abuse of dominance, criminal matters (including cartels, bid-rigging and deceptive marketing) and private actions. The following is an overview of some of the key misleading advertising developments (with summaries of other significant developments in 2012 to come over the next few days).
Richard v. Time
(“General Impression” Test & Disclaimers)
In Richard v. Time Inc. (2012 SCC 8), a Quebec resident received a prize mail-out relating to magazine subscription marketing leading him to believe he had won more than $800,000 (the mail-out stated he “WON $833,337.00!” when small print disclaimers disclosed that only a chance to win was being offered). He returned the mail-out, subscribed to the magazine and then requested his prize. When told he had not won, but was merely eligible to participate in a sweepstakes, he sued under the Quebec Consumer Protection Act (“QCPA”). While successful at trial, the Court of Appeal reversed and the recipient appealed to the Supreme Court.
On appeal, the Supreme Court considered the standard for the “general impression” test for misleading advertising under the QCPA. In this regard, advertising can be false or misleading, under some consumer protection legislation as well as the Competition Act (the “Act”), where a claim is literally false or the “general impression” is misleading. This “general impression” test can apply where, for example, a disclaimer fails to alter the overall misleading impression of a “headline” claim, two true claims are made but, when associated, they create a misleading general impression or material information is omitted (e.g., additional pricing, key limitations/conditions, etc.).
The Supreme Court held that the relevant consumer for the QCPA’s general impression test was a “credulous and inexperienced” consumer. Accordingly, courts should view the average consumer as “someone … not particularly experienced at detecting the falsehoods or subtleties found in commercial representations” (both a lower standard than held by the Court of Appeal in this case as well as other cases decided under the Act, where courts have generally held the relevant consumer to be an “average consumer”).
The Supreme Court in this case held that the general impression of the prize mail-out was that the grand prize had been won, which was misleading, and awarded compensatory and punitive damages. The Court also confirmed that in considering whether an advertisement is misleading the entire context, including layout and arrangement of text, must be considered and that fine print disclaimers (in this case “riddled with misleading representations”) failed to cure the otherwise misleading prize claim. Though decided under Quebec law, this case is important in that it has started a debate as to whether Canadian courts will lower the bar for the general impression test for competition law advertising cases.
Yellow Page Marketing
(Misleading Business Claims & Disclaimers)
In Commissioner of Competition v. Yellow Page Marketing, 2012 ONSC 927 (Sup. Ct.), a group of companies and individuals sent faxes designed to lead recipients to believe they were confirming online directory information for the Yellow Pages Group (“YPG”). In fact the companies, which used names and logos resembling YPG, were unrelated to YPG and used fine print disclaimers to sign-up recipients to new two-year online directory contracts with significant fees. The Ontario Superior Court reviewed the relevant law under the general civil misleading advertising provision of the Act (s. 74.01), finding that the faxes were misleading, material and that the fine print disclaimers failed to cure otherwise misleading claims. The penalties ordered by the Court included a ten-year prohibition order, compensating consumers and more than $9 million in AMPs (including more than $1 million against three individuals). This was the highest award to date in contested proceedings for a Canadian misleading advertising case.
Rogers and Rogers/Bell/TELUS Advertising Cases
(Performance Claims and Mobile Advertising)
In two of the most important advertising law developments in 2012, the Competition Bureau (the “Bureau”) challenged Rogers, Bell and TELUS in cases involving performance claims (Commissioner of Competition v. Chatr Wireless Inc., CV-10-8993-00CL (Ont. Sup. Ct.)) (“Rogers”) and price claims for “premium texting” wireless services (Commissioner of Competition v. Rogers Communications Inc., 12-55497 (Ont. Sup. Ct.)) (“Rogers/Bell/TELUS”).
In the Rogers case, the Bureau is challenging two performance claims made by Rogers in relation to its cell phone brand Chatr: that its service had “fewer dropped calls than new wireless carriers” and that customers had “no worries about dropped calls”. The Bureau argues that these claims, made to compete with new wireless entrants, were literally false in some cases (in markets where new entrants’ dropped call rates were superior) and where true, were nevertheless misleading because while giving the general impression of appreciably lower dropped call rates, any differences in performance were in reality “inconsequential and imperceptible”. The Bureau is also arguing that disclaimers used by Rogers, which included language that in the Bureau’s view would be “meaningless” to an average consumer, failed to cure the otherwise misleading general impression of the performance claims. Rogers in turn is challenging the appropriate data and methodology for performance claims made and is also making constitutional challenges to the performance claim provision of the Act (based on Charter freedom of expression arguments) and to the $10 million AMPs that may now be imposed under the Act for misleading advertising (arguing they are criminal in nature, constitute penal consequences and should be given the same procedural safeguards as criminal offences).
In the Rogers/Bell/TELUS case, the Bureau commenced additional proceedings in Ontario against Bell Canada, Rogers Communications, TELUS Corporation (the “Telecoms”) and the Canadian Wireless Telecommunications Association (“CWTA”) for alleged misleading advertising in relation to “premium texting services” (see: Competition Bureau, News Release, “Competition Bureau Sues Bell, Rogers and Telus for Misleading Consumers” (September 14, 2012)). In this second case, the Bureau is alleging that the Telecoms and CWTA facilitated the sale of 3rd party premium-rate digital content (e.g., news, advice, trivia, horoscopes, ringtones, etc.) without adequately disclosing their fees and suggested that some services were free and is seeking $31 million in AMPS and restitution for consumers. The essence of the Bureau’s claim is twofold: first, that the wireless companies made false or misleading representations to the public the general impression of which was that consumers could receive premium text messaging and other services for free (when they were in fact charged for content); and second, that claims were made that consumers were safeguarded from receiving and having to pay unauthorized charges, when the Telecoms collected and facilitated such charges keeping a percentage. The Bureau also argues that the recent lower general impression test from the Supreme Court of Canada’s decision in Richard v. Time (discussed above) should apply, alleging that the Telecoms’ claims were targeted at wireless users including “credulous, inexperienced, and vulnerable” persons, such as children.
Implications of Recent Advertising Cases
While the two telecom cases discussed above were ongoing at the time of writing, several of these cases have established new law, including lowering the bar for the “general impression” test in Quebec (which may be adopted by courts in other provinces), clarifying the meaning of “business interest” in misleading advertising cases, adding to the case law on disclaimers and illustrating some of the factors Canadian courts will consider in imposing the now more significant penalties possible for misleading advertising.
They are also a reminder of some established advertising law principles, including that courts will consider the overall context and impression of challenged advertising, that fine print or overly legalistic disclaimers may not cure otherwise false or misleading headline claims, that the misleading advertising provisions of the Act apply to product and business claims, and that a claim may violate the misleading advertising provisions of the Act where it is either literally false or the general impression is false or misleading.
Finally, these cases illustrate several important enforcement trends, including increased scrutiny of price and performance claims, challenges of fine print disclaimers, a focus on mobile devices and other new technologies, and a willingness by the Bureau to regularly seek the maximum statutory penalties for misleading advertising.
January 17, 2013
For anyone following the unusual, to say the least, story of Manti Te’o and apparent online romance fraud played on him, this may be of interest.
The Competition Bureau, together with a number of other Canadian consumer protection agencies including Consumer Protection BC, the Better Business Bureau and RCMP have published a Top Ten Scams 2013 list describing the “Scam of the Year” together with nine other types of fraud the agencies have been combatting.
Online scams described, along with warning signs, include the following entertaining medley of online ways one can get duped: advertising trolls, online romance scams, affinity fraud, curbers, computer virus fixing schemes, twisted text prizes and pretender invoices.
If nothing else, a very entertaining (if slightly disturbing) read.
For the news release and blog post see: Consumer Protection BC – Top Ten Scams 2013 – Just in case a scam is around the corner and We’re counting down the Top 10 Scams.
CANADIAN CASL (ANTI-SPAM LAW) PRECEDENTS
Do you need a precedent or checklist
to comply with CASL (Canadian anti-spam law)?
We offer Canadian anti-spam law (CASL) precedents and checklists to help electronic marketers comply with CASL. These include checklists and precedents for express consent requests (including on behalf of third parties), sender identification information, unsubscribe mechanisms, business related exemptions and types of implied consent and documenting consent and scrubbing distribution lists. We also offer a CASL corporate compliance program. For more information or to order, see: Anti-Spam (CASL) Precedents/Forms. If you would like to discuss CASL legal advice or for other advertising or marketing in Canada, including contests/sweepstakes, contact us: contact.
************
January 9, 2013
Last Friday, Industry Canada released highly anticipated (well at least in Internet, advertising and competition law circles) new draft regulations relating to the impending new Canadian anti-spam legislation (CASL). The new draft regulations, among other things, expand on some key terms in the legislation, clarify some exceptions existing in the legislation and add several new exceptions. These include sending commercial electronic messages to enforce a legal right, an exception for some types of referrals and for electronic communications sent within a company (or between companies in an existing business relationship).
CANADIAN CASL (ANTI-SPAM LAW) PRECEDENTS
Do you need a precedent or checklist
to comply with CASL (Canadian anti-spam law)?
We offer Canadian anti-spam law (CASL) precedents and checklists to help electronic marketers comply with CASL. These include checklists and precedents for express consent requests (including on behalf of third parties), sender identification information, unsubscribe mechanisms, business related exemptions and types of implied consent and documenting consent and scrubbing distribution lists. We also offer a CASL corporate compliance program. For more information or to order, see: Anti-Spam (CASL) Precedents/Forms. If you would like to discuss CASL legal advice or for other advertising or marketing in Canada, including contests/sweepstakes, contact us: contact.
************
January 4, 2013
On January 4, 2013, Industry Canada issued revised draft regulations (Electronic Commerce Protection Regulations) for Canada’s upcoming anti-spam legislation (“CASL”). The revised regulations will be subject to comment until February 4, 2013 and generally clarify certain key CASL definitions and exceptions and add some new exceptions. Some of the key aspects of the new draft regulations include:
January 4, 2013
On January 4, 2013, Ontario’s consumer protection agency (the Ministry of Consumer Services) announced that it is planning to regulate debt settlement companies and issued proposed regulatory changes for public comments. In making the announcement, Ontario’s Minister of Consumer Services said:
“There is evidence of harmful practices used by some debt settlement companies and that is why our government is taking steps to protect consumers. We want to put a stop to abusive practices in the marketplace. Consumers should know their rights before they sign contracts and they should not make any payments until they get results.”
The new regulations, which according to the Ministry are intended to protect Ontario consumers from “exaggerated claims and abusive practices”, may include regulations to: (i) prevent debt settlement companies from charging up-front fees, (ii) limiting the fees debt settlement companies can charge consumers, (iii) require clear and transparent contracts (clear disclosure of key contract terms including fees, services and conditions) and (iv) require a ten-day cooling-off period.
The new rules would apply to for-profit and not-for-profit operators offering to arrange debt settlements for consumers and would be subject to existing Ontario consumer protection laws (e.g., the Collection Agencies Act and Consumer Protection Act). The planned new rules would also apply to traditional debt management plans offered through credit counseling services.
January 2, 2013
In an interesting case decided just before the holidays, which I fleetingly Tweeted, the Supreme Court of British Columbia denied an attempt by TELUS to block seasonal advertising by newcomer Mobilicity (see: TELUS Communications Company v. Mobilicity). Now that I’ve had my fill of Christmas turkey, I’ve had a chance to take a look at the decision which, though brief, includes a few interesting points.
In this case, TELUS’ challenge focused on three Mobilicity television advertising claims:
1. That Mobilicity’s competitors (including TELUS) make deceptive offers to customers, including offers of “unlimited plans” (when in fact their plans are limited to “after 6 PM evenings and weekends”);
2. That Mobilicity offers customers wireless services with “no contracts” (when Mobilicity does in fact require contracts); and
3. That Mobilicity offers “unlimited data” plans (when its plans are subject to a fair use policy that can limit speed).
TELUS sought an interlocutory injunction stopping Mobilicity from continuing with its claims through the end of December, arguing that the claims violated section 52 of the Competition Act (the criminal misleading advertising provision of the Act, which allows civil damages actions).
In denying TELUS’ injunction application, the Court reviewed the availability of injunctions under the Competition Act, the test for granting interlocutory injunctions and made several interesting comments relating to the interpretation of advertising for the misleading advertising provisions of the Act (and the balance between the need for accurate advertising and free speech).
As a threshold matter, the Court reiterated the BC Court of Appeal’s holding in earlier TELUS litigation in 2009 that the private action provision of the Competition Act, which speaks only of compensatory damages (i.e., the ability for private plaintiffs to recover actual loss or damage suffered) does not prevent the Supreme Court from exercising its inherent jurisdiction to grant injunctions.
December 28, 2012
I am pleased to be a panelist for an upcoming Canadian/U.S. advertising law webinar hosted by Strafford on January 8, 2013: Key Canadian Advertising and Competition Law Compliance Strategies.
Description
The Canadian Competition Act contains civil and criminal prohibitions on misleading representations and regulates specific types of advertising and marketing practices. Violations can lead to “administrative monetary penalties” of up to $10 million and court orders to cease conduct and compensate consumers (restitution).
The Competition Bureau has ramped up enforcement efforts. Recent Bureau and private litigation challenges include price and performance claims, use of disclaimers and the application and scope of the “general impression test”. Developments include increased sectoral regulation and federal anti-spam legislation.
To effectively minimize legal risk, marketers and advertisers in Canada need to know the basic rules that apply to price and performance claims, sales and other promotions (including contests), disclaimers, electronic marketing and the enforcement agencies’ evolving approach to new technologies.
Listen as our panel of Canadian and U.S. attorneys provide a guide to important competition compliance rules for counsel to companies and associations conducting advertising and marketing operations in Canada. Panelists will review current litigation and Competition Bureau enforcement developments and provide practical compliance guidelines to avoid triggering allegations of misleading representations.
The panel will review these and other key questions: what types of representations are currently under heavy scrutiny by the Competition Bureau?; how should marketers prepare for the federal anti-spam legislation expected in 2013?; what kinds of safeguards are needed to ensure that price, performance or comparative claims or the use of disclaimers do not violate the Competition Act?
Templates/precedents and checklists to run promotional contests in Canada
Templates/precedents and checklists to comply with Canadian anti-spam law (CASL)
