Competition Bureau reaches settlement with federal auction service in advertising case

Company pays $25,000 for falsely representing it was selling government assets

OTTAWA, March 10, 2005 – A Brampton, Ont. company which coordinates and conducts auctions across Canada has agreed to stop making false representations that items put up for auction were previously seized by customs or recovered from the proceeds of crime. Federal Auction Service and its president, Amir Durrani, will pay a $25,000 penalty, according to a Consent Agreement registered today by the Competition Bureau.

The Competition Bureau has concluded that in 1999, Federal Auction Service began making misleading representations in newspapers across Canada and at auction sales, giving consumers the false impression that certain items on sale were disposed federal and other government assets. It is a violation of the deceptive marketing practices provisions of the Competition Act to make representations that are false or misleading in a material respect.

Once contacted by the Bureau, Federal Auction Service took immediate steps to correct its advertising practices in order to conform with the law. This cooperation permits an outcome which satisfies the Bureau's concerns without costly litigation.

"Consumers are particularly vulnerable when it comes to false claims that lead them to believe that a product is being sold by, or on behalf of, a government department," said Raymond Pierce, Deputy Commissioner, Competition Bureau.

According to the Consent Agreement, Federal Auction Service and Mr. Durrani have agreed to:

• pay an administrative monetary penalty in the amount of $25,000;
• clearly identify the volume and the source of each item for sale at auction;
• publish corrective notices in newspapers and on their Web site; and
• implement a formal company compliance policy regarding the use of advertisements and other promotions.

The Competition Bureau is an independent law enforcement agency. We contribute to the prosperity of Canadians by protecting and promoting competitive markets and enabling informed consumer choice.

A copy of the Consent Agreement is available on the Competition Tribunal Web site at: www.ct-tc.gc.ca.

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