Major Consumer Electronics Retailer - After Rebate/Credit Pricing

The Competition Bureau initiated an inquiry on August 1, 2002 after receiving complaints that a major consumer electronics retailer engaged in misleading marketing practices. The complaints alleged that the retailer did not adequately disclose the actual out-of-pocket costs to consumers for products where rebates and/or credits are advertised.

For example, taxes payable are based on the
pre-rebate and/or pre-credit price. Also, in some cases, credits or rebates are applied to the additional cost of purchasing a network service when necessary for the product to be operative, but are not applied to the hardware component itself. Prominently featured after-rebate "prices" are thus artificial and unattainable in real dollar terms.

During the course of the inquiry, it became evident to the Bureau that the information disclosed to consumers had since been prominently displayed by the retailer. As a result, a reduction of complaints has occurred, indicating that consumers are more aware that service contracts must be purchased in order to utilize certain electronics products. The Bureau concluded that it would not be in the public interest to continue the inquiry into this company's advertising practices under the Competition Act.

The inquiry was discontinued on January 8, 2004.

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