Archive for the 'Advertising' Category
February 8, 2013
It seems rather de rigueur at the moment for the Interim Commissioner of Competition to make the rounds of the big firms – in the latest stop on Mr. Pecman’s policy dance card, he stopped in Toronto yesterday to discuss in a bit more detail the Bureau’s current policies, enforcement focus and a few ongoing cases (see: Remarks by John Pecman). For other recent remarks by Mr. Pecman since he assumed the Interim Commissioner position last fall, see: here, here and here.
In this, the Interim Commissioner’s fourth speech since taking the post last fall, a few interesting points to note include a confirmation that the Bureau is interested in “incrementally increasing” its competition advocacy efforts (in addition to enforcement) in some key industries including the digital economy and retail and health sectors, re-stating the Bureau’s recent announcement that it would now use compulsory section 11 court orders in formal inquiries in all but exceptional cases (not voluntary information requests) and describing a loss in a Quebec court in one of its ongoing bid-rigging cases.
The Interim Commissioner also set out the following four factors the Bureau would consider in deciding whether to initiate regulatory interventions in particular sectors: (i) whether a forum exists and there is a high level of public interest, (ii) whether the Bureau would be contributing in a useful way (e.g., bringing forward unique arguments), (iii) being able to gauge the impact of advocacy efforts, and (iv) clear, tangible benefits for Canadians.
On the advertising and marketing law front, the Interim Commissioner also discussed the Ontario Court of Appeal decision upholding the lower court’s penalty finding in the recent Yellow Page Marketing case and the Bureau’s response filed in the CRTC’s wireless code consultations for mobile wireless providers.
All in all, while the Interim Commissioner reiterated previously announced policies, he also provided a bit more detail on the Bureau’s anticipated increase in advocacy / regulatory intervention efforts and further confirmed its continued focus on enforcement and key priorities, including the digital economy and mobile.
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February 3, 2013
Do you need contest rules/precedents
for a Canadian contest?
We offer many types of Canadian contest/sweepstakes law precedents and forms (i.e., Canadian contest/sweepstakes law precedents to run common types of contests in Canada). These include precedents for random draw contests (i.e., where winners are chosen by random draw), skill contests (e.g., essay, photo or other types of contests where entrants submit content that is judged to enter the contest or for additional entries), trip contests and more. Also available are individual Canadian contest/sweepstakes precedents, including short rules (“mini-rules”), long rules, winner releases and a Canadian contest law checklist. For more information or to order, see: Canadian Contest Law Forms/Precedents. If you would like to discuss legal advice in relation to your contest or other promotion, contact us: Contact.
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When running promotional contests in Canada, compliance tends to focus on the Competition Act, Criminal Code, privacy and ensuring that mandatory short rules and complete terms accurately reflect the promotion (and give maximum latitude to a contest promoter to take steps in the event an issue or contingency arises). While all of this is of course important and in many cases fairly straightforward, one aspect that can be overlooked is social media site rules (and another reason one size does not fit all in terms of contest rules and disclosure).
January 28, 2013
I am pleased to announce the launch of my new website: Canadian Contest & Promotions Law (www.contestlawyer.ca). The new website includes overviews of key aspects of running promotional contests in Canada (including Competition Bureau policies, application of the federal Competition Act and Criminal Code and Canadian advertising law issues) and frequently asked questions (FAQs) about Canadian contest/sweepstakes laws, guidelines and enforcement.
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Do you need contest rules/precedents
for a Canadian contest?
We offer many types of Canadian contest/sweepstakes law precedents and forms (i.e., Canadian contest/sweepstakes law precedents to run common types of contests in Canada). These include precedents for random draw contests (i.e., where winners are chosen by random draw), skill contests (e.g., essay, photo or other types of contests where entrants submit content that is judged to enter the contest or for additional entries), trip contests and more. Also available are individual Canadian contest/sweepstakes precedents, including short rules (“mini-rules”), long rules, winner releases and a Canadian contest law checklist. For more information or to order, see: Canadian Contest Law Forms/Precedents. If you would like to discuss legal advice in relation to your contest or other promotion, contact us: Contact.
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 25, 2013
The National Competition Law Section of the CBA will be holding its annual Competition Law Spring Forum in Toronto on May 28, 2013. From the CBA:
“Competition law and enforcement in Canada are in a state of flux. The impact of the Competition Bureau’s recent leadership change on future enforcement activity remains to be seen. The Bureau’s leniency program is under scrutiny as a result of recent decisions in Maxzone and Couche-Tard. And a number of important decisions are pending, including: (1) the Supreme Court of Canada’s decision in Pro-Sys which will determine the fate of indirect purchaser class actions in Canada; (2) the Competition Tribunal’s decisions in the Visa/MasterCard and TREB cases; (3) the Federal Court of Appeal’s decision in the CCS merger challenge. We invite you to come and hear leading experts discuss and debate these and other important issues.”
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
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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.
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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).
Templates/precedents and checklists to run promotional contests in Canada
Templates/precedents and checklists to comply with Canadian anti-spam law (CASL)
