September 13, 2009
I. Overview
The federal Competition Act (the “Act”) contains both criminal and civil provisions prohibiting a range of anti-competitive activities, many of which can arise in ordinary commercial dealings (e.g., in the context of distributor/customer relations, trade association activities and in relation to many common commercial agreements including IP license agreements, joint venture and strategic alliance agreements and franchise agreements).
Mail-in rebate.
Competition Bureau, Enforcement Guidelines, Consumer Rebate Promotions (2009): Consumers apply for the rebate after the purchase, by mail-in application, online or by other means. In [these guidelines] the term ‘mail-in rebate’ includes mail-in, Internet and other delayed-payment rebates. Various market participants may be involved in promoting and administering rebates.”
Malware (or “malicious software”).
A fraud term.
CRTC: “Malware, often sent through spam, is software that is installed for harmful purposes. It has many forms, such as viruses, worms, spyware, and keyloggers. Worms and viruses have many evil aims, including slowing down or otherwise interfering with the functioning of your computer or network. Spyware secretly spies on your computer, usually to collect personal information without your knowledge. Through keylogging, a person unknown to you can covertly record and monitor your keystrokes, thus picking up important information such as your online banking password.”
Government of Canada, Get Cyper Safe: “Malicious software that infects your computer, such as computer viruses, worms, Trojan horses, spyware, and adware.”
OnGuardOnline (U.S. Federal Trade Commission): “Malware is short for ‘malicious software.’ It includes viruses and spyware that get installed on your computer, phone, or mobile device without your consent. These programs can cause your device to crash and can be used to monitor and control your online activity. Criminals use malware to steal personal information, send spam, and commit fraud.”
Marketing.
Canadian Marketing Association, Code of Ethics and Standards of Practice: “Marketing is a set of business practices designed to plan for and present an organization’s products or services in ways that build effective customer relationships.”
Mass marketing fraud.
Competition Bureau, Ensuring Truth in Advertising: “Mass Marketing Fraud is defined as fraud committed via mass communication media using the telephone, mail, and the Internet. Provisions under the criminal regime of the Competition Act prohibit materially false or misleading representations made knowingly or recklessly, deceptive telemarketing and deceptive prize notices.”
“Material”.
To violate the criminal or civil misleading advertising provisions under the Competition Act (sections 52 and 74.01) a representation must be made to the public that is “false or misleading in a material respect”. In this regard, “materiality” does not depend on the value of a transaction, but rather has been held by Canadian courts to mean that a representation or claim could lead an average consumer to purchase a product (or otherwise alter their conduct).
Competition Bureau, Enforcement Guidelines, Application of the Competition Act to Representations on the Internet (2009): “To contravene certain provisions of the Act, a representation must be “false or misleading in a material respect”. This phrase has been interpreted to mean that the representation could lead a person to a course of conduct that, on the basis of the representation, he or she believes to be advantageous. It is important to note that omitting relevant information could also be viewed as material.”
R. v. Kenitex Can. Ltd. et al. (1980), 51 C.P.R. (2d) 103: “[A] representation will be false or misleading in a material respect if, in the context in which it is made, it readily conveys an impression to the ordinary citizen which is, in fact, false or misleading and if that ordinary citizen would likely be influenced by that impression in deciding whether or not he would purchase the product being offered”.
Commissioner of Competition v. Yellow Pages Marketing, 2012 ONSC 927 (Ont. Sup. Ct.), citing Canada (Commissioner of Competition) v. Sears Canada, [2005] CCTD No. 1 (Comp.Trib.): “A representation is ‘misleading in a material respect’ where an ‘ordinary citizen would likely be influenced by that impression in deciding whether or not he would purchase the product being offered.’ A misleading representation is material where it is of ‘much consequence of [is] important or pertinent or germane or essential to the matter.’”
Commissioner of Competition v. Chatr Wireless Inc. and Rogers Communications Inc., Notice of Application (November 19, 2010): “… the Representations made by the Respondent are false and misleading in a material respect. Network reliability, including dropped call rates, is a material aspect of wireless telecommunication services and is a component of a consumer’s decision to purchase a particular wireless telecommunication service. The Representations are material because prospective customers would likely be influenced by the Representations in deciding whether to purchase wireless service from Chatr or a new entrant. The Representations mislead consumers to believe there is a meaningful difference in dropped call rates, when that is in fact not the case.”
Apotex Inc. v. Hoffman La-Roche Ltd. (2000), 195 D.L.R. (4th) 244 (Ont. C.A.): [Whether a representation is material will depend upon whether it is] “… so pertinent, germane or essential that it could affect the decision to purchase.”
James Musgrove and Dan Edmondstone, “The Shifting General Impression of Disclaimers” (May 12, 2012): “The test as to whether something is materially misleading is generally applied in the context of an average purchaser or average reader or viewer of the advertisement”, citing R. v. Viceroy Construction Co. (1975), 11 O.R. (2d) 485, 1975 CarswellOnt 582 (Ont. C.A.); R. v. Bussin (1977), 36 CPR (2d) 111, 1977 CarswellOnt 1242 (Ont. Co. Ct.); R. v. RM Lowe & Pastoria Holdings Ltd. (1978), 39 C.P.R. (2d) 266, 40 C.C.C. (2d) 529 (Ont. C.A.); R. v. Park Realty Ltd. (1978), 43 C.P.R. (2d) 29, 1978 CarswellMan 2 (Man. Prov. Ct.); Telus Communications Co. v. Rogers Communications Inc., 2009 BCSC 1610, 2009 CarswellBC 3168 aff’d 2009 BCCA 581, 2009 CarswellBC 3424.
Metadata.
Office of the Privacy Commissioner of Canada, Fact Sheet, “The Risks of Metadata”: “Metadata is usually defined as ‘data about data’ or ‘information about information’. Think of it as a hidden level of extra information that is automatically created and embedded in a computer file. An example that you may be familiar with is that of the label on a can of soup. The label contains, in a standardized, structured format, information about the contents of the can (e.g., the type of soup, who made it, the ingredients and nutritional value and so on). In a similar fashion, the metadata associated with a document (in the form of keywords, for instance) can provide information about the contents of the document. Whenever a document is created, edited or saved, metadata is added to a document. This information accompanies the document whenever it is sent in electronic form (e.g., as an attachment to an e-mail) to other groups or individuals, internally or externally to an organization. This metadata may contain potentially sensitive information that could be inadvertently disclosed to unauthorized individuals or groups.”
Misleading advertising.
Competition Bureau, Ensuring Truth in Advertising, Misleading Advertising and Labelling: “The misleading advertising and labelling provisions enforced by the Competition Bureau prohibit making any deceptive representations for the purpose of promoting a product or a business interest, and encourage the provision of sufficient information to allow consumers to make informed choices. The false or misleading representations and deceptive marketing practices provisions of the Competition Act contain a general prohibition against materially false or misleading representations. They also prohibit making performance representations which are not based on adequate and proper tests, misleading warranties and guarantees, false or misleading ordinary selling price representations, untrue, misleading or unauthorized use of tests and testimonials, bait and switch selling, double ticketing and the sale of a product above its advertised price. Further, the promotional contest provisions prohibit contests that do not disclose required information. The Consumer Packaging and Labelling Act, Textile Labelling Act and Precious Metals Marking Act all contain prohibitions regarding false or misleading representations. They also require certain labelling or marking information aimed at assisting consumers in making informed purchasing decisions.”
R. v. David Stucky, 2006 CanLII 41523 (Ont. S.C.): “The essential elements of the [offence of misleading advertising under section 52 of the Competition Act] pre- and post-amendment, are: (a) that representations were made; (b) for the purpose of promoting, directly or indirectly the business interest specified in the indictment; (c) to the public; (d) the representations were false or misleading; (e) in a material respect.”
See also Competition Act, sections 52 and 74.01.
Mobile advertising games.
A mobile game advertising term.
Canadian Marketing Association (CMA): “Mobile advertising games represents the breed of mobile advertising where the brand itself creates a mobile game solely for their marketing strategies. An example of this type of mobile advertising is New Balance’s brand – Brine – lacrosse game app. Brine Shootout app features a game where users flick and slide their finger across their mobile screen to simulate a shot. Brine’s objective with this app was to engage lacrosse players, as well as introduce their line of products, increase brand presence and encourage brand loyalty. Based upon merits and achievements in the app, users are able to unlock and claim real prizes.”
Mobile games sponsorships.
A mobile game advertising term.
Canadian Marketing Association (CMA): “Mobile games sponsorship appeals to brands, as their presence within the app allows the brands to reach their targeted audience; with hopes of leveraging the association of a positive gaming experience. Subway, Samsung and New Balance are some of the many brands that have entered the mobile space via sponsorships, as part of their strategy to increase brand awareness, brand presence and purchase intent. Sponsorships also allow brands to maximize on the opportunities for message delivery. In the situation of a message being broadcast when a user is in a passive state, while leisurely playing a game, messaging is more likely to be received well by the user.”
Mobile in-game advertising.
A mobile game advertising term.
Canadian Marketing Association (CMA): “Mobile in-game advertising refers to the placement of advertising, brands and associated messages within mobile games. The advertising can be found anywhere within the game that is visible to the user during game play. Static banners, interactive ads and interstitial ads are all examples of the types of ad spaces found in mobile games.”
Multi-level marketing plan.
Competition Act, subsection 55(1): “… a plan for the supply of a product whereby a participant in the plan receives compensation for the supply of the product to another participant in the plan who, in turn, receives compensation for the supply of the same or another product to other participants in the plan.”
See also Competition Bureau, Truth in Advertising, Multi-level Marketing: “Multi-level marketing is a plan for the distribution of products whereby participants earn money by supplying products to other participants in the same plan. They, in turn, make money by supplying the same or other products to other participants. Operators of, and participants in, legitimate multi-level marketing plans should disclose: the different levels of earnings or compensation received by participants in the plan; the amount of money earned by a typical participant; and the time and effort required to reach specific levels of income.”
The Competition Act makes it a criminal offence for operators and participants of multi-level marketing plans to make compensation claims to prospective participants unless certain disclosure requirements are met – i.e., “fair, reasonable and timely” disclosure within the knowledge of the person making the claim is made to prospective participants of the: (i) actual or (ii) likely compensation to be received in the plan (based on a number of prescribed factors). The penalties for contravening the multi-level marketing provisions of the Act include unlimited fines (i.e., in the discretion of the court), imprisonment for up to five years, or both. Multi-level marketing plans that constitute pyramid selling schemes under the Act are illegal. In other words, while multi-level marketing plans are legal provided certain prescribed disclosure requirements are met, pyramid selling as defined in the Act constitutes a criminal offence.
Competition Bureau, Enforcement Guidelines, Multi-level Marketing Plans and Schemes of Pyramid Selling: “Subsection 55(1) of the Act defines an MLM plan as a plan in which a participant receives compensation for the supply of a product to another participant, who in turn receives compensation for the supply of the same or another product to yet another participant in the MLM plan. Subsections 55(2) and 55(2.1) set out certain obligations relating to compensation disclosure by operators of and participants in MLM plans. Failure to comply with these obligations is subject to criminal penalties as set out in subsection 55(3). The full text of these provisions is set out in Appendix A to this bulletin.”
Canadian Consumer Handbook: “Multi-level marketing (MLM) is a system for selling products in which participants get paid for selling products to other participants who, in turn, are paid for selling the same products to yet more participants. This type of marketing is legal in Canada when the plan does not contravene the Competition Act. Referral selling, matrix marketing and binary systems are all similar types of multi-level marketing plans, though some may be illegal under the Criminal Code, the Competition Act and some provincial and territorial laws. Under the Competition Act, MLM plans that make claims about potential compensation must also disclose the amount of compensation typical participants in the plan earn. Pyramid selling is an MLM plan that incorporates the following deceptive practices, which make it a criminal offence under the Competition Act: participants pay money for the right to receive compensation for recruiting new participants; a participant is required to buy a specific quantity of products, other than at cost price for the purpose of advertising as a condition of participation; selling unreasonable amounts of inventory to participants; having an unreasonable product return policy. Pyramid selling is also a criminal offence under the Criminal Code.”
Federal Government, Consumer Information website (www.consumerinformation.ca): “Multi-level marketing is a system for selling products whereby participants are paid for selling products to other participants who, in turn, are paid for selling the same products to yet more participants. This type of marketing must comply with the Competition Act. Pyramid selling is a type of multi-level marketing that is a criminal offence under the Competition Act due to the following deceptive practices: paying money to those who recruit new members (who also pay money for the same right); requiring new recruits to buy products as a condition of participation; selling unreasonable amounts of inventory to participants; and having an unreasonable product return policy. Pyramid selling is also a criminal offence under the Criminal Code of Canada.”
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SERVICES AND CONTACT
We are a Toronto based competition and advertising law firm offering business and individual clients efficient and strategic advice in relation to competition/antitrust, advertising, Internet and new media law and contest law. We also offer competition and regulatory law compliance, education and policy services to companies, trade and professional associations and government agencies.
Our experience includes advising clients in Toronto, Canada and the United States on the application of Canadian competition and regulatory laws and we have worked on hundreds of domestic and cross-border competition, advertising and marketing, promotional contest (sweepstakes), conspiracy (cartel), abuse of dominance, compliance, refusal to deal and pricing and distribution matters. For more information about our competition and advertising law services see: competition law services.
To contact us about a potential legal matter, see: contact
For more information about our firm, visit our website: Competitionlawyer.ca
September 6, 2009
Overview
In many cases trade association activities serve legitimate pro-competitive purposes, such as industry lobbying, education, promoting an industry or profession and setting standards. However, because trade association activities by their nature involve the interaction of direct competitors, they can also raise significant competition law issues. Because of the potential competition risk associated with some trade association activities, the following are twenty things for trade associations to know about Canadian competition law.
Label.
Canadian Food Inspection Agency: “includes any legend, word or mark attached to, included in, belonging to or accompanying any food, drug, cosmetic, device or package.” See also Food and Drugs Act.
Libel.
Foulidis v. Ford, 2012 ONSC: “The plaintiff must prove four things on the balance of probability to prove a libel in this case: (1) that the defendant spoke the words in issue; (2) that the defendant published the words in issue to one or more third parties; (3) that the words in issue referred to the plaintiff; (4) that the words in issue were defamatory of the plaintiff.”
Canadian Bar Association, “Defamation: Libel and Slander” (online): “Libel is the type of defamation with a permanent record, like a newspaper, a letter, a website posting, an email, a picture, or a radio or TV broadcast. If you can prove that someone libeled you, and that person does not have a good defence … then a court will presume that you suffered damages and award you money to pay for your damaged reputation. But going to Supreme Court is expensive and even if you win, you may not get as much as it costs you to sue. In deciding on damages, the Court will consider your position in the community. For example, if you are a professional, damages may be higher.”
Lift letter.
R. v. David Stucky, 2006 CanLII 41523 (Ont. S.C.): “A lift letter is a promotional technique, routinely used in direct mail promotions, urging further consideration of the initial offer before its expiration.”
Like-baiting.
A type of spam. Facebook, “News Feed FYI: Cleaning Up News Feed Spam” (April 10, 2014): “’Like-baiting’ is when a post explicitly asks News Feed readers to like, comment or share the post in order to get additional distribution beyond what the post would normally receive.”
Literal meaning.
Generally speaking, advertising or marketing in Canada can be misleading under federal (e.g., the federal Competition Act) or provincial (e.g., consumer protection legislation) where a representation or advertising claim is either literally false or misleading (the latter which may take into consideration the “general impression” of an advertising claim). With respect to the literal meaning of an advertising claim, the Supreme Court has held: “The phrase ‘literal meaning of the terms used therein’ [for the purposes of the Quebec Consumer Protection Act] does not raise any interpretation problems. It simply means that every word used in a representation must be interpreted in its ordinary sense” (Richard v. Time Inc., 2012 SCC 8).
********************
SERVICES AND CONTACT
We are a Toronto based competition and advertising law firm offering business and individual clients efficient and strategic advice in relation to competition/antitrust, advertising, Internet and new media law and contest law. We also offer competition and regulatory law compliance, education and policy services to companies, trade and professional associations and government agencies.
Our experience includes advising clients in Toronto, Canada and the United States on the application of Canadian competition and regulatory laws and we have worked on hundreds of domestic and cross-border competition, advertising and marketing, promotional contest (sweepstakes), conspiracy (cartel), abuse of dominance, compliance, refusal to deal and pricing and distribution matters. For more information about our competition and advertising law services see: competition law services.
To contact us about a potential legal matter, see: contact
For more information about our firm, visit our website: Competitionlawyer.ca
Coming soon.
********************
SERVICES AND CONTACT
We are a Toronto based competition and advertising law firm offering business and individual clients efficient and strategic advice in relation to competition/antitrust, advertising, Internet and new media law and contest law. We also offer competition and regulatory law compliance, education and policy services to companies, trade and professional associations and government agencies.
Our experience includes advising clients in Toronto, Canada and the United States on the application of Canadian competition and regulatory laws and we have worked on hundreds of domestic and cross-border competition, advertising and marketing, promotional contest (sweepstakes), conspiracy (cartel), abuse of dominance, compliance, refusal to deal and pricing and distribution matters. For more information about our competition and advertising law services see: competition law services.
To contact us about a potential legal matter, see: contact
For more information about our firm, visit our website: Competitionlawyer.ca
Coming soon.
********************
SERVICES AND CONTACT
We are a Toronto based competition and advertising law firm offering business and individual clients efficient and strategic advice in relation to competition/antitrust, advertising, Internet and new media law and contest law. We also offer competition and regulatory law compliance, education and policy services to companies, trade and professional associations and government agencies.
Our experience includes advising clients in Toronto, Canada and the United States on the application of Canadian competition and regulatory laws and we have worked on hundreds of domestic and cross-border competition, advertising and marketing, promotional contest (sweepstakes), conspiracy (cartel), abuse of dominance, compliance, refusal to deal and pricing and distribution matters. For more information about our competition and advertising law services see: competition law services.
To contact us about a potential legal matter, see: contact
For more information about our firm, visit our website: Competitionlawyer.ca
Identity fraud.
RCMP, Identity Theft and Identity Fraud: “Identity fraud is the actual deceptive use of the identity information of another person (living or dead) in connection with various frauds (including for example personating another person and the misuse of debit card or credit card data).”
Identity theft.
RCMP, Identity Theft and Identity Fraud: “Identity theft refers to the preparatory stage of acquiring and collecting someone else’s personal information for criminal purposes. As of January 8, 2010, Senate Bill S-4 became law, making it illegal to possess another person’s identity information for criminal purposes.”
Illegal lottery.
In addition to the standalone promotional contest provision in the federal Competition Act (section 74.06), criminal illegal lottery provisions of the federal Criminal Code also apply to contests in Canada (sections 206 and 207). These provisions prohibit certain types of gaming activities unless an exemption is available or one or more elements of the relevant offence is removed. While the relevant provisions of the Code are complex and somewhat archaic, they generally codify, although inconsistently, the former common law elements for illegal lotteries: (i) a prize, (ii) chance and (iii) consideration.
Re: Earth Future Lottery: “… Parliament does not happily abide gaming activities of any sort in Canada. The little it tolerates, it does so grudgingly. Section 206 [of the Criminal Code] is prohibitive in nature, not regulatory. The purpose of Parliament in enacting it was generally to outlaw gaming and lotteries, not just to ensure they would be run honestly. Subsection 206(1) creates a number of indictable offences proscribing a comprehensive range of gaming and gaming-related activities. Subsection 206(4) makes it a summary conviction offence to buy, take or receive a lot, ticket, other device mentioned in 206(1). Although s. 207 allows some tightly circumscribed exceptions to s. 206, it too contains a broad prohibition. Subsection 207(3) makes it an offence to do anything for the purpose of the conduct, management, operation of, or participation in a lottery scheme unless the doing of it is authorized by or pursuant to some provision of 207. Thus, even permitted lotteries must strictly adhere to the limits imposed by the terms and conditions of s. 207.”
Canadian Better Business Bureau, BBB Code of Advertising: “No contest, drawing or other game of chance that involves the three elements of prize, chance and consideration should be conducted since it constitutes a lottery [under the federal Criminal Code] and is in violation of provincial statutes.”
For more information about Canadian contest/sweepstakes law, see: Contests, Contests and CASL, Contest FAQs, Contest Tips and Contests and Social Media.
For information about the Canadian contest/sweepstakes precedents (template rules) and checklists that we offer for sale, see: Canadian Contest Forms/Precedents.
Image advertising.
Competition Bureau, Ensuring Truth in Advertising: “The term ‘image advertising’ is used to describe all forms of non-product advertising. The fact that an advertisement does not specifically mention the advertiser’s product does not automatically transform it from a commercial attempt to expand or retain the advertiser’s market into an altruistic exercise in social responsibility. To the extent that any such advertisement could materially misrepresent or falsely portray market information, it would be subject to the same prohibitions under the [Competition Act] as are the more familiar product claim advertisements, as long as it promotes, directly or indirectly, a business interest.”
Incentivized network.
A mobile advertising network term.
Canadian Marketing Association (CMA), “The Truth about Mobile Ad Networks”: “Incentivized networks showcase ads that incentivize users to download an app, or complete a call-to-action option dictated by the advertiser in exchange for a benefit (i.e. virtual currency, points towards a reward system, coupons, etc.). Advertisers have the ability to be particularly specific in regards to the type of mobile applications they run their ads through, and target campaigns by geography, device and demographic. These networks can be blind or transparent and pricing models are usually performance based (Pay-Per-Install and Pay-Per-Click), where a publisher only has to pay when a conversation/action is executed.”
Indexing.
“Indexing” is an online / Internet advertising term which refers to publishing an article on multiple pages on the web. Indexing allows for more web space for advertising and also has the additional potential benefit of increasing website traffic (i.e., resulting in more traffic on a website and in particular more “page views”).
Injunction.
An injunction is a type of court order where a court orders conduct to stop, for example, on a temporary or permanent basis. Injunctions are available to stop conduct under the Competition Act.
See e.g.: TELUS Communications Company v. Mobilicity, 2012 BCSC 1933 (B.C. Sup. Ct.): In the 2009 Telus litigation, it was argued in the Court of Appeal (although not before me) that this Court does not have jurisdiction to grant an interlocutory injunction, as section 36(1) of the Act appears to limit the remedy available to a private party to compensatory damages. The Court of Appeal concluded at para. 44 that the inherent jurisdiction of the Supreme Court of British Columbia to grant an injunction was not displaced by any of the provisions of the Competition Act. The Court went on to say this: ‘While we are of the view that the Supreme Court has jurisdiction to grant an interlocutory injunction in a claim brought under s. 36 of the Competition Act, the scheme of the Act, and its concentration on damages as the appropriate final remedy are important considerations for the court in considering whether interlocutory relief ought to be granted. In particular, the court should be careful in considering whether the plaintiff can make out a case for “irreparable harm” in the analysis of the test for an interlocutory injunction. [Emphasis original.]’ The parties do not dispute the applicable law [to obtain an interlocutory injunction]. The test has been discussed as both a two-pronged test (British Columbia (A.G.) v. Wale (1986), 9 B.C.L.R. (2d) 333 (C.A.), aff’d [1991] 1 S.C.R. 62; Bell Mobility Inc. v. Telus Communications Co., 2006 BCCA 578, 27 B.L.R. (4th) 194), and a three-pronged test (RJR-MacDonald Inc. v. Canada (A.G.), [1994] 1 S.C.R. 311). The first prong is whether the applicant’s claim raises a fair question to be tried. The cases make it clear that this is a relatively low threshold. The second prong is whether the balance of convenience favours the granting of the injunction. One of the factors to be considered in this regard is whether either of the parties will suffer irreparable harm from allowing or denying the application. In the three-pronged test, irreparable harm is considered separately from the balance of convenience, but in either event we are warned to view the picture as a whole, rather than concentrate on its individual components. Other factors include, but are not limited to, which of the parties has acted to alter the balance of the relationship so as to affect the status quo, and matters affecting the public interest. Also to be considered in assessing the balance of convenience is the strength of the applicant’s case, particularly where the extent of in-compensable disadvantage to each party would not differ significantly. See, for instance, Canadian Broadcasting Corp. v. CKPG Television Ltd. (1992), 64 B.C.L.R. (2d) 96 (C.A.).”
Inquiry.
The Competition Bureau can conduct informal or formal investigations of potential violations of the Competition Act. Where the Bureau intends to conduct a formal investigation of a matter, it will commence an “inquiry”. Under section 10 of the Competition Act, the Commissioner of Competition is required to commence an inquiry where: (1) a “six resident complaint” is made under section 9 of the Act (and the application formalities under that section are satisfied), (2) the Commissioner has “reason to believe” that (a) a person has violated an order under the Act, (b) grounds exist to make an order under Parts VII.1 or VIII of the Act (deceptive marketing and reviewable matters) or (c) an offence under Parts VI or VII has been (or is about to be) committed (criminal offences) or (3) where the Minister of Industry directs that an inquiry be commenced. The significance of the Bureau commencing an inquiry is that once initiated, the Bureau has a number of enforcement powers available to it including obtaining section 11 orders (compelling an oral examination, the production of records and/or a written return under oath), wire-taps or search warrants (which can be obtained in relation to both criminal offences and civil “reviewable matters” under the Competition Act).
Competition Bureau, Complaint Process (Bureau website): “For complaints under the Competition Act, the information will be examined to determine whether a formal inquiry should be commenced. All inquiries are conducted in private. If an inquiry is opened, the Bureau may contact other customers or competitors to obtain more information. During the inquiry stage, Bureau staff may use many tools at their disposal to determine the facts of the situation. They can apply for authorization from a court to search premises, examine or seize records, and question witnesses under oath.”
Instant rebate.
Competition Bureau, Enforcement Guidelines, Consumer Rebate Promotions (2009): “Consumers receive the rebate at the time of purchase. The rebate is generally available to anyone who purchases the product, without further condition.”
Instant win contest.
A type of contest in which entrants are immediately notified whether they have won (as opposed to, for example, waiting for notification by e-mail, phone or mail).
For more information about Canadian contest/sweepstakes law, see: Contests, Contests and CASL, Contest FAQs, Contest Tips and Contests and Social Media.
For information about the Canadian contest/sweepstakes precedents (template rules) and checklists that we offer for sale, see: Canadian Contest Forms/Precedents.
Insured contest.
An “insured contest” is a contest in which a contest promoter has obtained insurance to cover the, usually remote, possibility that a winner wins a significant prize where the odds of winning are significant (i.e., in which it is unlikely that any entrant will win).
For more information about Canadian contest/sweepstakes law, see: Contests, Contests and CASL, Contest FAQs, Contest Tips and Contests and Social Media.
For information about the Canadian contest/sweepstakes precedents (template rules) and checklists that we offer for sale, see: Canadian Contest Forms/Precedents.
Intellectual property.
Intellectual Property Institute of Canada (IPIC): “Patents, trade-marks, copyright, industrial designs and similar rights are referred to as ‘intellectual property’. These rights are ‘property’ in the sense that they are based on the legal right to exclude others from using the property and in that ownership of the rights can be transferred. The rights are ‘intellectual’ in the sense that they protect intangible subjects, usually arising out of some form of human creativity. Patents protect inventions, such as machines, devices, methods and compositions of matter. Trade-mark rights protect words, designs, numbers, two-dimensional or three-dimensional forms, sounds or colors (or a combination of two or more of these elements) used to distinguish the products or services of one trader from those of others in the marketplace. Copyright protects literary (including computer programs), artistic, musical and dramatic works. Related rights include trade secrets, industrial designs, integrated circuit topographies, plant breeders’ rights, and personality rights such as the right to the image.”
Interactive video ad.
A mobile app advertising term.
Canadian Marketing Association (CMA), “The Truth about Mobile Ad Networks”: “Video ads that combine sounds, visuals and touch screen capabilities that engage users from launching a mobile application, clicking on a banner, etc. Videos may feature a call-to-action, whereby the user can exit out of the app to find more information about the ad.”
Interest-based advertising (IBA).
Association of Canadian Advertisers: “Interest-based advertising (IBA), or online behavioural advertising, is the collection of online data and web-viewing behaviours from computers or devices over time and across non-affiliate websites designed to predict user preferences or interests in order to deliver ad messages based on those inferred preferences. With IBA, benefits accrue to advertisers (effective and efficient means of reaching potential consumers), publishers (they receive premium rates that allow them to continue to provide quality content for free) and consumers (who receive more relevant advertising).”
Internal do not contact list.
Canadian Marketing Association, Code of Ethics and Standards of Practice: “A list of current customer, consumer or business contact information of those persons or businesses who have requested that they not be contacted by the marketer’s organization. It is used to cross-reference and purge that information from any list to be used for any marketing campaign by that organization. Often referred to as an ‘internal deletion list’, this Code requires that internal do not contact lists must be maintained by every organization that markets for every channel by which they market and that the information must be retained on the list for three years.”
Interstitial ad.
A mobile app advertising term.
Canadian Marketing Association (CMA), “The Truth about Mobile Ad Networks”: “Interstitial ads are interactive ads that are placed within an app, where the ads are showcased during app engagement. A common example of an interstitial ad would be an ad placed between game play (like Words with Friends). Commonly, with news literature apps, an interstitial ad may execute after launching the app and before accessing the article.”
Inventory loading.
Section 55.1 of the Competition Act makes pyramid selling schemes a criminal offence. Section 55.1 defines a pyramid selling scheme as a multi-level marketing plan (as defined under the Act) that has one or more prescribed features, including knowingly supplying product to participants in commercially unreasonable quantities (i.e., “inventory loading”).
Competition Bureau, Enforcement Guidelines, Multi-level Marketing Plans and Schemes of Pyramid Selling: Sections 55 and 55.1 of the Competition Act (2009): “Paragraph 55.1(1)(c) of the [Competition Act] defines a scheme of pyramid selling as those situations in which an operator or a participant in an MLM plan supplies products to participants in amounts that he or she knows are commercially unreasonable. In other words, there can be no inventory loading. The amount considered ‘commercially unreasonable’ is based on considerations such as: the type of product; the selling price of the product; the size of the market; the number of participants; the number of competitors; and the sales history of the products.”
Goldman, C.S. and J.D. Bodrug, eds., Competition Law of Canada, 2 volumes, looseleaf (New York: Juris, 1988 – ): “It is also contrary to the [Competition Act] for an operator to supply a product to the participant in amounts that are commercially unreasonable. This is a practice known as inventory loading. The determination of what is commercially unreasonable will be based on such factors as the type of product, the selling price, the size of the market, the number of participants, the number of competitors and the sales history of the product.”
Investment Schemes.
Canadian Department of Justice, Report of the Canada – United States Working Group on Telemarketing Fraud (Updated December 1, 2011): “Victims are sold ‘investments’ in a wide range of merchandise or securities that appear to offer high profit-margins. The fraud lies in misrepresenting the true value (or actual existence) of what is being sold, and/or the true extent of the risk in buying it. Common ‘opportunities’ have involved stocks or securities, investment-grade gemstones, precious or strategic metals or minerals, and business opportunities such as oil and gas ventures, pizza ovens, and ostrich farms. These schemes commonly defraud victims more than once (see ‘reloading’, below). Once funds have been committed, the victim can be induced to make additional payments to increase the value of the ‘investment’ or avoid its loss (e.g., ‘margin calls’). Since legitimate investments normally tie up assets for extended periods, victims often do not realize for some time that they have been defrauded.”
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SERVICES AND CONTACT
We are a Toronto based competition and advertising law firm offering business and individual clients efficient and strategic advice in relation to competition/antitrust, advertising, Internet and new media law and contest law. We also offer competition and regulatory law compliance, education and policy services to companies, trade and professional associations and government agencies.
Our experience includes advising clients in Toronto, across Canada and the United States on the application of Canadian competition and regulatory laws and we have worked on hundreds of domestic and cross-border competition, advertising and marketing, promotional contest (sweepstakes), conspiracy (cartel), abuse of dominance, compliance, refusal to deal and pricing and distribution matters. For more information about our competition and advertising law services see: competition law services.
To contact us about a potential legal matter, see: contact
For more information about our firm, visit our website: Competitionlawyer.ca
History sniffing.
A behavioural advertising term.
U.S. Federal Trade Commission, news release, “FTC Settlement Puts an End to ‘History Sniffing’ by Online Advertising Network Charged With Deceptively Gathering Data on Consumers” (December 5, 2012): “An online advertising company agreed to settle Federal Trade Commission charges that it used ‘history sniffing’ to secretly and illegally gather data from millions of consumers about their interest in sensitive medical and financial issues ranging from fertility and incontinence to debt relief and personal bankruptcy. The FTC settlement order bars the company, Epic Marketplace Inc., from continuing to use history sniffing technology, which allows online operators to ‘sniff’ a browser to see what sites consumers have visited in the past. It also bars future misrepresentations by Epic and requires the company to destroy information that it gathered unlawfully. Consumers searching the Internet shouldn’t have to worry about whether someone is going to go sniffing through the sensitive, personal details of their browsing history without their knowledge,’ said FTC Chairman Jon Leibowitz. ‘This type of unscrupulous behavior undermines consumers’ confidence, and we won’t tolerate it.’ Epic Marketplace is a large advertising network that has a presence on 45,000 websites. Consumers who visited any of the network’s sites received a cookie, which stored information about their online practices including sites they visited and the ads they viewed. The cookies allowed Epic to serve consumers ads targeted to their interests, a practice known as online behavioral advertising.”
********************
SERVICES AND CONTACT
We are a Toronto based competition and advertising law firm offering business and individual clients efficient and strategic advice in relation to competition/antitrust, advertising, Internet and new media law and contest law. We also offer competition and regulatory law compliance, education and policy services to companies, trade and professional associations and government agencies.
Our experience includes advising clients in Toronto, across Canada and the United States on the application of Canadian competition and regulatory laws and we have worked on hundreds of domestic and cross-border competition, advertising and marketing, promotional contest (sweepstakes), conspiracy (cartel), abuse of dominance, compliance, refusal to deal and pricing and distribution matters. For more information about our competition and advertising law services see: competition law services.
To contact us about a potential legal matter, see: contact
For more information about our firm, visit our website: Competitionlawyer.ca
Templates/precedents and checklists to run promotional contests in Canada
Templates/precedents and checklists to comply with Canadian anti-spam law (CASL)
