Archive for the 'Advertising' Category
In what can only be described as a growing war against telecom advertising in Canada, the Competition Bureau announced on September 14, 2012 that it began proceedings in Ontario Superior Court against Bell Canada (“Bell”), Rogers Communications (“Rogers”), TELUS Corporation (“TELUS”) and the Canadian Wireless Telecommunications Association (“CWTA”) for alleged misleading advertising in relation to “premium texting services” (see: Competition Bureau Sues Bell, Rogers and Telus for Misleading Consumers: Bureau Seeks Customer Refunds and $31 Million in Penalties).
The Bureau is seeking both the maximum civil penalties available under the Competition Act (the “Act”) against Bell, Rogers and TELUS, as well as full restitution for consumers (amendments to the Act in 2009 both significantly increased the monetary penalties for misleading advertising and introduced a new restitution penalty). The Bureau is seeking a $1 million AMP against the CWTA.
According to the Bureau’s allegations, Bell, Rogers and TELUS (together with the CWTA) facilitated the sale of 3rd party premium-rate digital content – for example, news, advice, alerts, trivia quotations, horoscopes and ringtones – without adequate disclosure of their fees and suggestions were made in advertising for these products that the services were free.
In making the announcement the Bureau said:
“’Our investigation revealed that consumers were under the false impression that certain texts and apps were free,’ said Melanie Aitken, Commissioner of Competition. ‘Unfortunately, in far too many cases, consumers only became aware of unexpected and unauthorized charges on their mobile phone bills.’ The premium-rate digital content in question can cost up to $10 per transaction, and up to $40 for a monthly subscription, rates over and above standard text messaging plans.”
The premium 3rd party content was marketed through free wireless apps and online, and have been the subject of previous consumer studies (see: Paying a Premium: Consumers and Mobile Premium Services, a Public Interest Advocacy Centre report) and critical commentary (see here). The 2011 PIAC report found, among other things, that consumer premium mobile service problems were under-detected and underreported, that the industry often dismisses complaints and no agency tracks or handles related complaints (leading to a recommendation for measures to improve consumer protection in relation to premium mobile services).
This is also the most recent case is the latest in a series of high profile advertising law challenges made by the Bureau against Bell (price claims and disclaimers; see here and here), Nivea (performance claims and the general impression test; see: Nivea), Yellow Page Marketing (misleading business claims and disclaimers; see: here, here and here) and the ongoing Rogers case (performance claims, the general impression test and disclaimers; see: here).
The Bureau’s Claim & General Impression Test
The thrust of the Bureau’s Statement of Claim under Canadian competition law is twofold: first, that the wireless companies made false or misleading representations to the public online and over their wireless networks the general impression of which was that consumers could receive premium text messaging and other services free (when they were in fact charged for the content); and second, that claims were made that consumers were safeguarded from receiving and having to pay unauthorized charges, when in fact the wireless companies collected and facilitated such charges keeping a portion.
In this regard, in Canada the general misleading advertising provisions of the Act can be violated where claims are either literally false or convey a false or misleading general impression.
Interestingly, the Bureau has also imported the recent (and lower) general impression test from the Supreme Court of Canada’s decision in Richard v. Time, alleging that the telecoms’ false or misleading representations were targeted at wireless users, including “credulous, inexperienced, and vulnerable” persons, such as children.
The CWTA’s News Release and Control
In the CWTA’s news release, it indicates that it had in fact contacted the Bureau last year to investigate potential remedies for non-compliant advertising by companies utilizing Common Short Codes (and offer assistance in pursuing potential remedies), the Bureau chose instead to pursue litigation against the CWTA and the defendant telecos, that wireless carriers do not in fact create or control text messaging services (but rather only manage the billing for 3rd party creators and operators) and that the Bureau’s actions could disrupt Canadians’ access to text messaging services.
The control point made by the CWTA is an interesting, if not entirely settled point (i.e., in Canada, the degree to which a party, such as an ISP, must be linked to a false or misleading claim in order to be liable remains subject to debate).
In its Claim, the Bureau emphasizes the wireless companies’ involvement and control of the delivery of text messaging services, through third parties, alleging that the defendants are “far from being passive conduits” for the distribution of text messaging services, but rather provide third party providers with “privileged access” to their networks and the necessary infrastructure to deliver services (while collecting related revenues). According to the Bureau, the entire model for delivery of text messaging services through Short Codes and third parties has been established and is administered by the defendants, relying on their active participation.
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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September 13, 2012
The Canadian Corporate Counsel Association recently published a new article on Canada’s impending (but when?) new anti-spam legislation, entitled Canada’s Anti-spam Law: Filtering Relationships (by Yves Faguy).
Recently, on August 4, 2012, new Enhanced Labellilng for Food Allergen Regulations under the federal Food and Drugs Act came into force. These Regulations increase the labelling requirements for prepackaged foods sold in Canada containing specific types of priority allergens, gluten sources and added sulphites (see: Canada’s new food allergen labelling regulations came into force).
Health Canada has also issued a Food Allergen Precaution Statement Policy, which recommends that food manufacturers and importers voluntarily make declarations on the labels of prepackaged foods of the possible inadvertent presence of allergens.
Advertising Standards Canada will be holding two upcoming workshops on the basics of Canadian food related advertising regulations in Montreal (September 19th) and Toronto (September 25th). These two hour workshops will address common questions relating to Canadian food advertising related regulations, including how to compare foods, “common names”, how to claim that products are “fresh” / “natural” or “healthy”, nutrient content claims and health claims.
For more information see: The ABC’s of Food Advertising Regulations.
On September 11, 2012, the Competition Bureau announced that it had laid charges against Progressive Waste Solutions Ltd. and its subsidiary, BFI Canada Inc. for allegations of breaches of a consent agreement following the merger in 2012 of IESI-BFC Ltd. and Waste Services Inc.
In making the announcement, the Bureau said:
“’Today’s announcement sends a strong signal to businesses that breaching a Consent Agreement with the Competition Bureau is an extremely serious matter and will not be tolerated’, said Melanie Aitken, Commissioner of Competition. ‘Consent Agreements are an essential tool to preserve competition and protect consumers from potential anti-competitive harm. Companies who violate the terms of such agreements must be held to account.’”
This announcement is another indication both of the Bureau’s more aggressive enforcement of the Competition Act generally and signals the Bureau’s ongoing appetite to take steps to ensure that settlement agreements under the Act are complied with. In this regard, this case is the third recently announced case in which the Bureau has commenced enforcement steps, including criminal enforcement, relating to alleged breaches of consent agreements (see also: Bureau Seeks Criminal Penalties in Alleged Misleading Advertising and Breach of Consent Agreement Case and Commissioner of Competition Speech Highlights Enhanced Competition Bureau Enforcement).
This case also appears to indicate that the Bureau is making good on its commitments to both monitor the marketplace generally for conduct that potentially violates the Competition Act and for potential violations of consent agreements negotiated with parties in misleading advertising, merger and other cases.
For example in one recent speech, the Commissioner said that the Bureau will “continue to be vigilant in monitoring consent agreements” and would not “hesitate to take further enforcement action as warranted”. Bureau personnel have also indicated in other recent public remarks that they continue to periodically monitor online advertising and marketing for Competition Act compliance and business media for mergers that, while not notifiable, may raise competition concerns.
Flipping through The Lawyers Weekly today, which as a bit of an aside seemed to me to have a slightly spiffier look, several new Canadian regulatory and IP law texts caught my eye:
Canadian Food and Drug Legislation & Commentary (2012) (LexisNexis)
“Canada’s leading compilation of federal food and drug laws. Food and drug legislation is a critical part of Canada’s national regulatory framework. Consumers of foods, drugs, medical devices, and cosmetics look to this system to ensure that regulated products meet all health and safety standards. Thousands of professionals have a responsibility to interpret and apply the statutes and regulations in this extremely complex area of law. Canadian Food and Drug Legislation meets the research and reference needs of this growing group. This unique compilation includes the most up-to-date Food and Drugs Act and all related federal statutes and regulations. A detailed index further simplifies your research. The commentary, prepared by Borden Ladner Gervais LLP, which has one of Canada’s largest food and drugs practices, explains the legal framework and recent developments, and gives an overview of each part and division of the key legislation as follows: Food and Drugs Act and all regulations under the Act; Consumer Packaging and Labelling Act and Regulations; Controlled Drugs and Substances Act and Regulations; Canada Agricultural Products Act and Regulations.”
Halsbury’s Laws of Canada – Patents, Trade Secrets and Industrial Designs (2012) (LexisNexis)
“In the age of information, the ability to protect a client’s rights in intellectual property can be as important as the creation of that property itself. Like a right without a remedy, a proprietary asset without legal recognition may be no asset at all. So, while patent applications or industrial design issues may be best left to intellectual property specialists, a sound appreciation of the law and the issues shouldn’t be. Newly revised and thoroughly updated, Halsbury’s Laws of Canada – Patents, Trade Secrets and Industrial Designs (2012 Reissue) is the ideal source for authoritative commentary on this always important subject. Authored by two of Canada’s leading intellectual property experts, it clearly delineates the law governing patents of invention in Canada, as codified by the Patent Act, as well as the law pertaining to trade secrets and industrial design.”
For more information and ordering details see: Canadian Food and Drug Legislation and Patents, Trade Secrets and Industrial Designs.
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CANADIAN CONTEST RULES/PRECEDENTS
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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In my inbox this morning was a newsletter with what I thought was a rather good note by Dale Joerling (Thompson Coburn LLP – St. Louis) on avoiding issues when running a sweepstakes in the U.S.
When I’m out chatting to clients and industry groups about competition and advertising law, some of the most frequently asked questions after gasoline pricing relate to airline pricing – and in particular, why the “price” for flights never seems to be the actual price.
Well, as many folks that work in the competition, advertising or marketing law areas know, there has been increasing pressure recently by enforcement agencies (and a number of regulatory efforts afoot in several industries) to ensure that the advertised price is the price, the price and nothing but the price. Period.
One such initiative is the long anticipated, but slightly slow to come into effect, reforms to airline pricing.
In this regard, late last week, the Canadian Transportation Agency announced that Canadians have two weeks (a bit less since I am writing this over the long weekend) left to comment on proposed airline price advertising regulations.
In making the announcement, the CTA said:
“There are only two weeks remaining to review and comment on the proposed regulatory amendments to the Air Transportation Regulations (ATR) pertaining to the advertisement of the price of air services.
Input received by nearly 3,600 stakeholders and Canadians who participated in the online consultation held in February informed the development of the Agency’s proposed ATR amendments. The proposed amendments were pre-published in Part I of the Canada Gazette on July 3, 2012 to give various interested groups and individuals, as well as Canadians in general, a final opportunity to review and comment. Comments received from interested parties by September 13, 2012 may result in changes to the proposed regulatory amendments. It is anticipated that the final amendments will be published in the Canada Gazette, Part II this winter.
Templates/precedents and checklists to run promotional contests in Canada
Templates/precedents and checklists to comply with Canadian anti-spam law (CASL)
