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 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.
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:
- reduce the risk of potentially illegal conduct
- protect your brand and reputation
- detect instances of potentially illegal conduct at an early stage
- identify when others might put you at risk
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.
- Written opinions
- Advertising do’s and don’ts
- Price-related representations
- Competition Act, section 74.04
- Bargain hunting season could turn into a wild goose chase (online cancelled discounts)
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