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Misleading Advertising (Inquiry #4)

Backgrounder

July 01, 1996

Complaint

One of the six-resident applications for inquiry alleged that Ultramar's Value Plus marketing campaign in the Province of Quebec misled the public because it gave the general impression that a "supposed" rationalization was at the origin of the efficiency gains achieved by the company and that the company's intention was to pass on these gains to consumers. The applicants alleged that the company was misleading the public in presenting a false image of itself and that its real intention was to eliminate competitors.

Competition Act (Misleading Advertising)

Paragraph 52 (1) (a) of the Act makes it an offence to make a representation to the public that is false or misleading in a material respect. If the representation could influence a consumer to buy the product or service advertised, it is material. To determine whether a representation is misleading, the courts consider the "general impression" it conveys, as well as its literal meaning.

Evidence

Ultramar Canada's Value Plus campaign received a great deal of publicity in the Province of Quebec, particularly because of the major gas war that resulted from introduction of the program. The company's advertisements made several claims: that the company had made efficiency gains in its processes and wanted to lower the price of premium gasoline to its customers; and that its prices would be "unbeatable."

The investigation established that the statements made by Ultramar were not misleading: efficiency gains contributed to the price reductions that were made; Ultramar lowered the retail price of premium gasoline as claimed; the company had a mechanism to verify and adjust prices upon request by participating stations or consumers; and Ultramar did match lower prices of its competitors.