1. FBP Role

The Fair Business Practices Branch (FBP) of Industry Canada is the federal agency whose "mandate is the marketplace". Its job is to:

• Promote equity and fair competition in the Canadian marketplace,
• Protect consumers against false or misleading representation by establishing, administering and enforcing standards for trade in commodities, and
• Make sure consumers have basic and accurate product information so they can make informed purchasing decisions.

FBP administers and enforces:

• the Consumer Packaging and Labelling Act,
• the Textile Labelling Act,and
• the Precious Metals Marking Act.

FBP also oversees voluntary industry guidelines concerning:

• environmental labelling and advertising,
• textile care labelling, and
• the marketing of diamonds, coloured gemstones and pearls.

2.Software Market

In Canada, the Information Technologies sector of the economy is an important contributor to Canada's information and technologies' infrastructure. This sector's total revenues for 1993 were $50 billion, contributing 7% of Canada's GDP. It has been reported that the global market for information technology products and services exceeds US $1 trillion and is expected to double by the year 2000.

A report entitled "Information Technologies Statistical Review Working Document of Industry, Science and Technology" stated that total imports of information technology products were $19.2 billion in 1992, with a domestic market for those products for the same year at $54.3 billion, 11.2% of which was for software and services.

A Statistics Canada publication provides an industry profile which states that in 1992, there were 12,350 establishments engaged in computer and related services which was an increase from 7,001 establishments in 1986. Of these establishments, 2% were located in the Atlantic, 22% in Quebec, 49% in Ontario, 14% in the Prairies and 13% in the Pacific.

According to The Future Letter (John Kettle), 18% of homes owned a computer in 1990, whereas 30% of homes owned a computer in 1995. Based on the experience of household adoption to VCR technology, it is projected that the number of homes with computers will increase from 30% to 80% over the next ten years.

3.National Survey

In 1996, as part of its claims investigation priority, the Consumer Products Directorate decided to undertake a survey across Canada on software claims. Early this year, 140 different Canadian and imported software packages available to consumers (including household, educational, business/office, information and game products), were tested to determine the validity of the claims provided on the software packages.

This report outlines the results of the evaluation made on claims that were broken down as claims related to system requirements, features and bonus offers. The labelling information required under the Consumer Packaging and Labelling Act, such as the dealer identity and the product's common name, was also verified.

In accordance with Section 7 of the Consumer Packaging and Labelling Act which prohibits a dealer from applying to a prepackaged product a label containing any false or misleading representation that relates or may reasonably be regarded as relating to the product, this survey was conducted with the objective to evaluate compliance of claims made on software packages and to determine what, if any, further information should be provided on the label of such products to allow the consumer to make an informed purchase decision.