Archive for the 'Advertising' Category
December 7, 2012
Earlier today, the Competition Bureau announced that five individuals have been charged under the Criminal Code and Competition Act for allegedly misleading and deceptive telemarketing (see: Five Individuals Facing Charges for Fraudulent and Misleading Telemarketing Calls).
In making the announcement, the Bureau said:
“In August 2006, a Bureau investigation revealed two telemarketing operations in Montréal using questionable tactics. One, using names such as ‘Advance Financial’, ‘Consumer Benefit’, and others, promoted government grants to American citizens. The other, using names including ‘Global Electronic Solutions/Solutions Électroniques Global’ and ‘Federal Emergency Medical Supply/Agence Federal des Produits Medicales (sic)’, promoted the sale of office supplies and medical kits to Canadian and American businesses. The operations were shut down following a search in December 2006. The combined revenue of the two operations is estimated to be as much as $840,000.
The Bureau’s investigation determined that some of the alleged tactics used during the telemarketing calls included implying that the caller represented a business that had an existing relationship with the victim’s company, indicating that certain products or services were required under government rules, or implying that the call was being made on behalf of a government agency.”
In Canada, the Competition Act makes it a criminal offence to engage in deceptive telemarketing and also requires certain disclosure to be made during telemarketing calls.
In particular, under the Competition Act’s deceptive telemarketing provisions, it is a criminal offence to: (i) make materially false or misleading representations; (ii) operate a contest where the delivery of a prize is conditional on prior payment or certain disclosure is not made (regarding the number and value of prizes, area or areas to which they relate and odds of winning); (iii) offer free or below cost products, as consideration for supplying another product, unless disclosure is made of the fair market value of the first product (and any restrictions, terms or conditions relating to its supply); or (iv) offer products for sale grossly in excess of their fair market value where their delivery is conditional on prior payment by buyers.
December 6, 2012
I am always interested in innovation and trends, both in marketing generally and in relation to my own practice. Lawyers can, well, be rather slow to embrace change. In this regard, I’ve been seeing a continued trend toward video, both on the web generally – for example in this interesting Globe note this morning: Need more proof of the power of video on the web? Here it is – as well as with my own clients, colleagues (well some of them at least) and more recently enforcement agencies in Canada and Internationally.
Following this trend, several enforcement agencies using video have caught my eye including this short (but good) Consumer Protection BC video on expiry dates and gift cards this morning: A Consumer Question About Gift Cards and a video contest being used by the RCMP to promote drug prevention awareness.
These Canadian examples of enforcers using video also reminded me of the recent excellent cartel compliance video by the Australian ACCC – The Marker – a short film produced by the ACC to illustrate the potentially significant effects that involvement in a cartel can have on individuals and businesses (see: ACCC gets on the front foot with cartels film ‘The Marker’) and this series of price-fixing videos uploaded to YouTube by the Singapore Competition Commission – see: here.
It seems to me this is a good trend for lawyers and enforcers and that we’ll probably see a lot more like them down the road.
For more on gift card, contest and cartel laws in Canada see: Gift Cards, Contests and Cartels.
December 5, 2012
In interesting and wide ranging comments given earlier today in Vancouver, as a prelude to published remarks, the Interim Commissioner of Competition John Pecman discussed current Bureau priorities, some key enforcement trends and gave some indication of future policy direction at the Bureau.
Perhaps appropriately, the Interim Commissioner began his remarks by noting that today, December 5th, has been designated by the Indian based NGO CUTS International as “world competition day” (with this year’s topic being designated by CUTS as the impact of cartels on the world’s poor).
Some highlights from the Interim Commissioner’s remarks included:
Enforcement. An overarching theme of today’s discussion in Vancouver was a continued focus on enforcement and an unwavering willingness by the Bureau to commence litigation (though underscored throughout the talk by a message that the Bureau continues to be interested in collaboration and dialogue). While the Interim Commissioner said that the Bureau’s default is generally to work collaboratively, the Bureau will continue not to hesitate to litigate. The Interim Commissioner also spoke about a desire to return to some of the “bread and butter” priorities of the Bureau in both the criminal and deceptive marketing areas. Interestingly, the Interim Commissioner indicated that despite recent Federal budgetary cuts, the Bureau was working toward enhancing its internal litigation capabilities.
Consultations & New Guidelines. The Interim Commissioner indicated that the Bureau would be commencing consultations with the competition bar in Canada in the new-year, as well as stakeholders, business groups and procurement groups to amplify and clarify several key areas, including the Bureau’s Immunity and Leniency Programs and electronic document production. The Interim Commissioner also indicated that the Bureau would be working towards issuing new price maintenance guidelines, FAQs for unilateral conduct and new general guidelines on Bureau enforcement. The Interim Commissioner also suggested a desire by the Bureau to move away from issuing advisory opinions in individual cases toward a focus on published materials (i.e., guidelines).
Maxzone. With respect to the recent decision by Chief Justice Crampton in the Maxzone case, the Interim Commissioner indicated that the decision both sends a strong message that serious white-collar crime conduct akin to fraud should be appropriately punished (including by increasing recommendations for prison sentences) while other aspects of the decision were less workable practically, for example Chief Justice Crampton’s suggestion that defendants should work to achieve restitution with plaintiffs prior to plea agreements (which can delay criminal investigations). In this regard, the Interim Commissioner commented on the existing partition between private actions and criminal enforcement, saying there already existed a mechanism for restitution (section 36 of the Competition Act – the provision under which private civil actions in Canada are commenced). Overall, however, Mr. Pecman described the ongoing shift of Canadian courts toward sterner sentencing and recent Criminal Code sentencing amendments eliminating conditional sentences for cartel and bid-rigging offences as a “sea change” to how competition law offences are treated in Canada.
November 28, 2012
In an interesting Ontario class action decision issued on November 16th, the Ontario Superior Court of Justice found George Brown College liable, among other things, for violating the Ontario Consumer Protection Act (“CPA”) in relation to representations in a college course calendar about a graduate business program (George Brown’s International Business Management Program).
The student plaintiffs in this case alleged that George Brown failed to deliver what was promised for their program: the ability to obtain three particular industry designations in addition to the college’s certificate. The program stated that students could “complete three industrial designations/certifications in addition to the George Brown College Graduate Certificate” which were in fact not available without additional courses and fees.
George Brown took the position that students received what promised – a George Brown graduate certificate and opportunity to complete the industry accreditations in the future – insisting “there was nothing inaccurate” in its program description and denied liability. The school’s view was also that reasonable students that diligently researched industry websites would have understood that George Brown was only offering a preparatory platform for the future completion of the three listed designations.
The plaintiff students initially filed a complaint to their program advisor after which, when unsuccessful, they commenced a class action founded on negligent misrepresentation, breach of contract and violations of the CPA.
In assessing the students’ claim, the Court found that the students’ interpretation of the course description was reasonable, and that they were right to assume that they would graduate not only with the George Brown graduate certificate but also the three stated industry designations/certifications (or on a more nuanced interpretation, at least the required courses for the designations).
The Court held that on a plain reading of the description, the reasonable interpretation was that students could complete courses to obtain the designations, not merely an “opportunity to advance to complete”. The Court also found that if qualifications were necessary, such as the fact that the program only provided “preparation” for future accreditations, it could easily have said so.
November 24, 2012
On November 23, 2012, the U.K. Office of Fair Trading (OFT) announced that it had written to 100 leading price comparison websites (“PCWs”) asking that they take steps to ensure they were providing clear information to consumers (see: here). In making the announcement, which followed a detailed Review of Price Comparison Websites, the OFT said:
“The OFT has written to 100 leading price comparison websites asking them to ensure they are providing clear information to consumers, after a review published today by the OFT suggested that some sites could do more to improve trust amongst the public.
The review says that in general, price comparison websites have represented a major step forward for consumers, enabling them to secure better value when buying goods and services, but that some people are missing out on potential savings because of a lack of trust. The review also says that the role of such sites is likely to become even more important in the future as online sales continue to grow and initiatives such as the Government’s ‘midata’ project put more information in consumers’ hands.
As part of its review, the OFT conducted a web sweep of 55 price comparison sites which found that a number of sites could improve their privacy policies and their complaints and redress processes. It also identified scope for some sites to provide greater clarity about the way search results are presented, and clear identification of the business operating the website.”
Some of the specific issues considered by the OFT in its Price Comparison Website Report include privacy (e.g., the collection of customer information relating to searches and disclosure and use of information), transparency of information (e.g., how searches are ranked, commercial relationships between comparison sites and vendors and the proportion of the market searched) and complaints and exclusions of liability (e.g., clarity of complaints policies and scope of exclusions of liability).
Recommendations made by the OFT to PCWs include ensuring that privacy policies are clear; being clear about how search results are presented; being clear about the nature of the search; ensuring that there is a clear complaint and redress process; and ensuring clear identification of the website’s operator. The OFT also issued “six top tips” for consumers to keep in mind for price comparison sites.
In Canada, like other jurisdictions, comparative advertising can be a perfectly legitimate and consumer enhancing advertising strategy. It can also, however, in some instances raise issues including misleading advertising (or performance claim), defamation or intellectual property concerns – for example, the recent Rogers performance claims case involving a challenge by the Bureau of Rogers for comparative cell phone reliability claims made by Rogers.
November 24, 2012
Competition/antitrust law penalties in Canada, of course, do not compare to the magnitude of those in the EU or U.S. (where fines can reach hundreds of millions of dollars or Euros).
Having said that, given that 2012 is drawing to a close, I was curious what the fines in Canada have been over the past year. In this regard, though not exhaustive, the following is a brief tiptoe through the cartel, bid-rigging and misleading advertising fine landscape in the last year in Canada:
$12.5 million – Two companies sentenced in relation to a price-fixing cartel for polyurethane foam (January, 2012) (see: here).
$9 million – Five companies and three individuals held to have violated the misleading advertising provisions of the Competition Act (March 2, 2012) (see: here).
$5.5 million – An airline sentenced in relation to an international air cargo price-fixing cartel (July 19, 2012) (see: here).
$2 million – Three companies sentenced in relation to a gas price-fixing conspiracy in Kingston and Brockville, Ontario (March, 2012) (see: here).
$1.5 million – A company sentenced in relation to a price-fixing conspiracy in the aftermarket automotive lights market; part of the ongoing global auto parts cartel investigation (May, 2012) (see: here).
$500,000 – A company sentenced in relation to a gas price-fixing conspiracy in Belleville, Ontario (April 13, 2012) (see: here).
$125,000 – A company sentenced in relation to a bid-rigging cartel for federal government contracts (July 30, 2012) (see: here).
November 16, 2012
The following are some of the more interesting competition, advertising and regulatory law developments that caught my eye over the past several days, at least to the extent they have a bearing on Canada or companies doing business in Canada:
BCE and Astral plan to work towards reworking their deal to obtain regulatory clearance (see: here and here), following a rejection of the deal by the federal CRTC.
The Malaysian state-owned oil company Petronas was reported to be revising undertakings to obtain Investment Canada Act clearance for its acquisition of Progress Energy (see: here).
The CRTC launched new web pages for their planned mandatory wireless code consultations that include the “top 100 liked” comments for a new wireless code (see: here).
Earlier today, Canada’s Finance Minister gave some further indications that the Federal Government may soon reveal new Investment Canada Act rules for FDI in Canada and that the new rules may include “limits” (see: here). Any such rules would replace and/or supplement existing Investment Canada Act provisions and guidelines under the ICA (e.g., those specifically relating to national security or state-owned-enterprises).
More testimony unfolded in the ongoing Quebec corruption and competition law probe relating to allegations of municipal bribes and bid-rigging in the construction sector in Quebec (Monique Muise at the Gazette in Montreal has the best feed going on this, plus she has a sense of humour and, if I may say, classic Quebecois ability to take things in stride – see: here).
November 14, 2012
CANADIAN CONTEST RULES/PRECEDENTS
Do you need contest rules and forms for a Canadian contest/sweepstakes? I offer a selection of Canadian contest rules and forms for random draw, skill and other common types of Canadian contests (i.e., contest precedents and forms). For more information see Canadian Contest Forms/Precedents.
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In what I think was the most tragic legal story I saw today – in terms of human nature and near financial gain (but not quite) though not perhaps true human tragedy – the Montreal Gazette reported that a Quebec court has denied a lottery player’s claim to a $27 million jackpot – for a seven second delay in buying his ticket.
Templates/precedents and checklists to run promotional contests in Canada
Templates/precedents and checklists to comply with Canadian anti-spam law (CASL)
