Annual Report of the Commissioner of Competition for the year ending March 31, 2003

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Appendix I: Discontinued Cases

Bait-and-Switch Selling and Ordinary Price Representations

The Bureau received complaints that a large retailer was engaging in bait-and-switch selling, contrary to the misleading advertising and deceptive marketing practices provisions of the Competition Act. The Bureau began an inquiry on May 14, 2001, and expanded it on May 27, 2002, to include reviewable conduct under the ordinary price provisions of the Act.

The Bureau discussed the allegations with company officials, who voluntarily provided a considerable amount of information. After reviewing the information, the Bureau found that the evidence was not sufficiently compelling to warrant further action.

The inquiry was discontinued on February 18, 2003.

Deceptive Marketing Practices

Air Emissions from an Electricity Power Generation Company

Following complaints, the Bureau initiated an inquiry into a misleading environmental claim about the reduction of air emissions by electricity power generation plants. The complainants alleged that the claim was contrary to the deceptive marketing practices provisions of the Competition Act, since the company used the all-encompassing term air emissions in its claim of reductions only of emissions of nitrogen oxides and sulphur dioxide. These representations could be open to misinterpretation by consumers. The Bureau discussed the issue with company officials, who agreed to use detailed and specific language to describe emission types in future advertisements, review the company's internal advertisement approval process, and ensure that advertisements are accurate and fair both in specific content and general impression.

The inquiry was discontinued on January 22, 2003.

Aboricultural Services

This inquiry was initiated on August 22, 2002, following an application alleging that a printed advertisement placed by a business to promote its aboricultural services included a false or misleading representation about the qualifications of its staff. Section 74.01 of the Competition Act prohibits the making of materially false or misleading representations to the public.

The Bureau investigated the business' marketing practices and obtained information indicating that the representation at issue appeared in one edition of a community directory. Upon request, the company submitted the advertisement planned for the 2002-2003 edition of this directory to the Bureau, which concluded that the revised representation no longer raised an issue under the Act.

The inquiry was discontinued on October 16, 2002.

Deceptive Telemarketing

The Bureau initiated an inquiry on December 10, 2001, following complaints from small and medium-sized business about the telemarketing practices of two office supply companies selling toner cartridges. Complainants alleged that company telemarketers failed to disclose their identities, and the nature and price of the product or business interest being promoted. They further alleged the telemarketers made false or misleading representations that left the impression they had an existing business relationship with the companies, that they had already placed an order, or that there was a special deal on prices.

The Bureau's examination revealed some evidence that the companies' telemarketers had failed to meet disclosure requirements under section 52.1 of the Competition Act and had made representations that could raise issues under the Act. However, the inquiry also revealed that one of the companies ceased operations in April 2001 and its successor followed suit in January 2002. While monitoring the principals behind the two companies, the Bureau noted that a third related company generated one similar complaint in August 2002.

Given that the companies under inquiry no longer exist and that the only known related company had generated only one complaint, the Bureau concluded that it would not be in the public interest to pursue the matter further.

The inquiry was discontinued on February 4, 2003.

Unsolicited Game Card Mailings

The Bureau initiated an inquiry on October 12, 1999, after receiving complaints from consumers from all provinces except Quebec about unsolicited game cards they had received in the mail. The complainants alleged that the cards gave them the impression they had won the $5000 grand prize listed on the cards, when in fact the vast majority of the recipients had actually won the least valuable prize, ostensibly $45, but in reality much less. The complainants further alleged that the cards encouraged them to call a 1-900 number at a cost of $24 per call before taxes to learn which prize they had won.

A Bureau examination revealed that the representations in question could have raised an issue under the general misleading representation provisions of the Competition Act. However, in the fall of 1999, Bell Canada stopped offering its 1-900 telephone services to companies that were mailing cards for the purpose of generating revenue from calls made to these numbers. As a result, the company under inquiry ceased operations.

Given that the conduct had stopped, the Bureau concluded that it would not be in the public interest to pursue the matter further.

The inquiry was discontinued on April 24, 2002.

Deceptive Marketing Practices and Bait-and-Switch Selling

This inquiry was initiated on February 18, 2000, following an application alleging that a regional home audio and visual retail chain was doing the following:

• making false and misleading representations regarding product performance;
• advertising product warranties that were in fact unavailable; and
• regularly advertising bargain priced products for sale without making a reasonable supply of the products available for purchase.

Section 74.01 of the Competition Act prohibits making of a materially false or misleading representation to the public. Subsection 74.04(2) prohibits bait-and-switch advertising.

The marketing practices of the retail chain were investigated and, on reviewing the information gathered, the Bureau's assessment was that there was insufficient evidence to proceed further, either under the bait-and-switch provisions or the misleading representations provisions of the Act.

The inquiry was discontinued on July 25, 2002.