Effective February 11, 2019, Ad Standards has developed and implemented a new competitor advertising dispute procedure, making significant changes to the process that came before.

Ad Standards is Canada's industry self-regulatory body, and administers the Canadian Code of Advertising Standards (the "Code"), which sets out the criteria for truthful, fair and accurate advertising. Ad Standards also offers dispute-resolution mechanism for consumers, special interest groups and advertisers. The Advertising Dispute Procedure (the "Procedure") provides a forum for advertisers to challenge another party's advertising for contravening one or more provisions of the Code. Prior to the modified Procedure, parties would first be required to participate in a mandatory mediation session. If a complaint was not resolved in mediation, it would go to a hearing at which both parties would submit oral arguments in front of a panel.

The historical process has been on hiatus since last fall, in anticipation of the new changes. In late 2018, Ad Standards sought input from its members, and canvassed other self-regulatory frameworks in other jurisdictions, to look for ways to make the process more efficient and effective. Launched in February, there are some significant changes under the new Procedure. Critically, however, Ad Standards has maintained the confidentiality of the Procedure, which has been a distinguishing feature of the Canadian process when compared to similar forums in other jurisdictions.

The following are some key changes under the new Procedure:

  • No more surprises

    The complaining advertiser must demonstrate that it made a good faith attempt to resolve the dispute before bringing it to Ad Standards.
  • Voluntary mediation

    While it still remains an option for parties upon mutual agreement, the mandatory resolution meeting is no longer a requirement to participate in the Procedure.
  • Written submissions only

    The parties will each submit written arguments for and against the alleged Code violation. Only the written submissions will be considered although, if desired, either party may request a voluntary in-person resolution meeting to attempt to resolve the dispute.
  • Revised panel composition

    The three-person panel considering the submissions will be chaired by a lawyer with expertise in advertising and marketing law, joined by two members of the advertising, communications, and media industry.
  • Case summary reports

    While it is intended that the Procedure remain confidential, Ad Standards may now release case summaries. The summaries are intended to provide information to the advertising industry and public about the complaints without identifying the advertisers or campaign in question.
  • No appeals

    All decisions are now final, and there will no longer be recourse to appeal a decision under the Procedure. Noncompliance with the decision of an Ad Dispute Panel may result in Ad Standards releasing a public statement, whether through a more detailed case summary, a notice to the exhibiting media, and/or referring the matter to the Competition Bureau, which is the independent law enforcement agency that enforces misleading advertising legislation in Canada.

The updated Procedure is likely to continue to be a popular option for advertisers wishing to resolve disputes in a quicker and more cost effective manner than litigation. The move to a panel of adjudicators will result in a broad range of expertise to inform decision-making. It remains to be seen whether the publication of case summaries will truly maintain the confidentiality of the Procedure, particularly since the interpretation of the Code requires an assessment of the campaign at issue. By publishing the case summaries, however, Ad Standards will be introducing significant transparency into the Procedure, and they are likely to grow into a valuable body of precedents.

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