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Performance claims not based on an adequate and proper test

Under paragraph 74.01(1)(b) of the Competition Act, you cannot make a claim about a product’s performance, its effectiveness, or its length of life, unless you can prove that the claim is based on an adequate and proper test. In addition, the test must have been done before the claim is made.

Performance claims can take many forms, whether it is product labelling, or words, images and design elements on a website or social media. These claims can also include the keywords in website metadata or online advertising campaigns used to attract customers to a website.

To determine if a performance claim is supported by adequate and proper testing, the Competition Bureau looks at various elements related to the general impression an advertisement makes on consumers.

For example, to be considered adequate and proper, the testing must:

Marketers should avoid:

You should always ask yourself: “What is the general impression conveyed by my ad?”, and review your marketing concepts where appropriate.

You should also remember to test the product before you market it.

Remedies for non-compliance

If a court determines that a person has engaged in conduct contrary to this provision, it may order them to stop engaging in such conduct, publish a correction, and/or pay an administrative monetary penalty. For individuals, the penalty can be up to $750,000 for a first-time violation and up to $1 million for subsequent incidents. For corporations, the penalty can be up to $10 million for a first-time violation and up to $15 million subsequently.

Compliance programs

Having a credible and effective compliance program can provide benefits in dealing with the Competition Bureau to resolve a violation of one of the legislation it enforces. A compliance program can also help:

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

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