Bait and Switch Selling

The Competition Act prohibits engaging in bait and switch selling. Bait and switch selling occurs when a product is advertised at a bargain price, but is not available for sale in reasonable quantities even though the nature of the market, the nature and size of the  business, and the nature of the advertisement suggest there should be available stock at a reduced price.

The Act also provides specific circumstances where it would not apply. In essence, if the business that advertise the product can show:

  • that despite having taken reasonable steps to obtain reasonable quantities of the product, the business was unable to do so due to events that were beyond its control, and that such events could not have been reasonably anticipated
  • that the business, in relation to the nature of the advertisement, obtained reasonable quantities of the product but was unable to meet the demand which surpassed reasonable expectations
  • that, following a situation where the business was unable to provide the product, it undertook to supply the same product, or an equivalent product of equal or better quality, at the bargain price, and within a reasonable time, to all persons who requested the product and were not supplied with it during the time when the bargain price applied

Remedies for non-compliance

If a person is found to have contravened the bait and switch provision of the law, this person may be ordered to stop engaging in such conduct, to publish a corrective notice, and/or to pay an administrative monetary penalty.

For individuals, the penalty for first-time violations is up to the greater of:

  • $750,000 ($1 million for each subsequent violation); and
  • three times the value of the benefit derived from the deceptive conduct, if that amount can be reasonably determined.

For corporations, the penalty for a first-time violation is up to the greater of:

  • $10 million ($15 million for each subsequent violation); and
  • three times the value of the benefit derived from the deceptive conduct, or, if that amount cannot be reasonably determined, 3% of the corporation’s annual worldwide gross revenue

Compliance programs

Commissioner’s opinions

To find out more information on written opinions under section 124.1 of the Competition Act, contact the Bureau’s Information Centre toll-free at 1-800-348-5358 or online. If a written opinion is provided by the Commissioner, a fee will apply based upon the section of the Act the proposed conduct or practice applies to. A written opinion is binding on the Commissioner as long as the facts submitted are accurate, and it remains binding if the facts on which the opinion is based remain substantially unchanged and your conduct or practice is carried out, as proposed.  All fees and service standards for written opinions are set out in the Competition Bureau Fee and Service Standards Policy.

Further reading