The Competition Bureau recently announced that Bell Canada had, in a consent agreement filed with the Competition Tribunal, agreed to stop making what the Bureau had concluded were misleading representations about the prices offered for some of Bell Canada's services. A $10 million administrative monetary penalty was also part of the settlement. While Bell Canada did not contest the Commissioner of Competition's conclusions, it did not accept the Commissioner's allegations.

The Bureau's position is that Bell Canada had charged higher prices than those advertised, despite the fact that disclosure of additional mandatory fees were set forth in disclaimers associated with Bell Canada's advertisements.

"I am pleased that Bell cooperated with the Bureau's investigation and is taking steps to correct the misleading advertisements," said Melanie Aitken, Commissioner of Competition. "When a price is offered to consumers, it must be accurate. Including a fine-print disclaimer is no licence to advertise prices that are not available."

The Competition Act prohibits representations to the public that are false or misleading in a material respect. The general impression conveyed by the representation as well as its literal meaning are both to be taken into account in determining whether an advertisement is materially false or misleading. Because of this, the practice of many advertisers has been to use fine-print disclaimers to add clarity to their representations. The issue with these disclaimers is whether the information contained in the "fine-print" is sufficient to balance the general impression conveyed by the overall advertisement. Disclaimers that, in the view of the Bureau, contradict the general impression conveyed by the overall advertisement, rather than clarify it, are likely to encounter Bureau resistance.

Nor is the Bureau's view on the potential inadequacies of some fine-print disclaimers new. In its False or Misleading Representations and Deceptive Marketing Practices pamphlet issued in 2003, the Bureau stated that fine-print disclaimers "often fail to change the general impression conveyed by an advertisement. If you do use them, make sure the overall impression created by the ad and the disclaimer is not misleading." Yet while the Bureau's view may be largely unchanged, it appears that its willingness to take enforcement action has.

In taking action against Bell Canada, the Commissioner has sent a very clear message to Canadian business that, in cases where the Commissioner is of the view that the disclaimer in an advertisement is not sufficient, in her opinion, to offset the general impression of the advertisement, the Commissioner will take action to protect Canadian consumers – an action that could be very costly to the advertiser. 

Nor is the Bureau the only agency in Canada interested in consumers understanding what the total price is for advertised products and services. By way of example, last year Quebec amended its Consumer Protection Act to require that, in advertising that includes the price of goods or services, the total price that the consumer must pay, exclusive of taxes, be emphasized.

Advertisers should also be mindful of exposure to civil actions, including class actions, by private parties to recover losses or damages allegedly suffered as a result of false or misleading advertising.

In light of these developments and risks, Canadian advertisers would be well advised to review their advertisements and their fine-print disclaimers, especially those that relate to price, with their legal advisers before publication.

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