Ensuring truth in advertising

The Competition Bureau promotes truth in advertising in the marketplace by discouraging deceptive business practices and by encouraging the provision of sufficient information to enable informed consumer choice.

The Competition Act contains criminal and civil provisions to address false or misleading representations and deceptive marketing practices in promoting the supply or use of a product or any business interest.

Under the criminal provisions, the general provision prohibits all materially false or misleading representations made knowingly or recklessly. Other provisions specifically prohibit deceptive telemarketing, deceptive notices of winning a prize, double ticketing, and schemes of pyramid selling. The multi-level marketing provisions prohibit certain types of representations relating to compensation.

Under the civil provisions, the general provision prohibits all materially false or misleading representations. Other provisions specifically prohibit performance representations that are not based on adequate and proper tests, misleading warranties and guarantees, false or misleading ordinary selling price representations, untrue, misleading or unauthorized use of tests and testimonials, bait and switch selling, and the sale of a product above its advertised price. The promotional contest provisions prohibit contests that do not disclose required information.

The Consumer Packaging and Labelling Act, Precious Metals Marking Act and Textile Labelling Act are regulatory statutes. They prohibit false or misleading representations in specific sectors, namely prepackaged consumer products, precious metal articles, and consumer textile articles. These laws set out requirements for basic, standardized labelling information, such as bilingual product descriptions, metric measurement declarations and dealer identity, all of which help consumers to make informed choices.

False or misleading representations and deceptive marketing practices can have serious economic consequences, especially when directed toward large audiences or when they take place over a long period of time. They can affect both business competitors who are engaging in honest promotional efforts, and consumers.

Key information

How is the law enforced?

Under the criminal regime of the Competition Act as well as under the Consumer Packaging and Labelling Act, the Textile Labelling Act, and the Precious Metals Marking Act, certain practices may be brought before the criminal courts, requiring proof of each element of the offence beyond a reasonable doubt. If the results of an investigation disclose evidence that, in the opinion of the Commissioner, provides the basis for a criminal prosecution, the matter may be referred to the Attorney General of Canada. If a referral is made, the Director of Public Prosecution, acting for and on behalf of the Attorney General, determines whether a prosecution should be undertaken. Under the civil regime of the Competition Act, certain practices may be brought for review before the Competition Tribunal, the Federal Court or the superior court of a province. To establish a breach of these provisions, each element of the conduct must be proven on a balance of probabilities.

Not all complaints result in a prosecution or in an application to the court. The Commissioner may employ a variety of instruments to promote and maintain conformity with the law. Depending on the circumstances, a temporary or permanent court order may be sought prohibiting a party from committing an offence or engaging in reviewable conduct. Alternatively, an undertaking - in essence a written promise - which will establish future conduct in respect of a particular practice, may be voluntarily given by a party under investigation. Further, an information letter may be provided in cases where the facts demonstrate a possible contravention of the Act and the alleged wrongdoer is unaware of the relevant statutory provisions.

Due to the large volume of complaints received each year, the Commissioner has established a system for the selection of cases that best meet the objectives of the legislation. In prioritizing enforcement activity, the Commissioner reviews matters in relation to the following criteria: economic impact, the Bureau's enforcement policies and priorities, and the financial and human resources required to pursue a specific matter. These criteria have been developed to ensure that the Commissioner's discretion over enforcement matters under the acts is exercised in an objective and consistent manner.

Some of the economic considerations used in assessing the priority to be given to a complaint include: the nature and scope of the practice, its impact on consumers and competition, and the need for government intervention to restore balance in the market. The enforcement considerations include: the number and source of complaints, the potential value of a case in developing jurisprudence on particular issues, whether the practice was intentional or inadvertent, whether the matter is a national issue and the impact a successful court proceeding would have on the marketplace. Finally, resource considerations include: the availability of human resources to effectively examine the complaint, availability and location of the evidence and the financial cost of gathering evidence.

Enforcement partnerships

The Competition Bureau works with both international and domestic agencies in combatting mass marketing fraud.

International relationships include, among others, those with the Organization of Economic Cooperation and Development, the International Consumer Protection Enforcement Network, the International Mass Marketing Fraud Working Group, and the Messaging Anti-Abuse Working Group.

The emphasis of these working relationships is the sharing of cross-border information concerning mass marketing fraud and seeking ways to promote cross-border enforcement.

Domestic regional partnerships exist across the country with various police forces and government agencies—Canadian and international. The intelligence and law enforcement support obtained through these partnerships is essential to our work both domestically, as well as to our cooperation with international counterparts. The Bureau is active in seven regional law enforcement partnerships: the Toronto Strategic Partnership; the Alberta Partnership Against Cross-Border Fraud; Quebec's Centre of Operations Linked to Telemarketing Fraud; British Columbia's Emptor Telemarketing Task Force; the Vancouver Strategic Alliance; the Saskatchewan Enforcement of Deceptive Marketing Practices Partnership; and the Atlantic Partnership—Combatting Cross-Border Fraud.

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