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Misleading Advertising

CANADIAN CONTEST RULES & FORMS

Need contest rules and forms for a Canadian Contest?: I offer a selection of Canadian contest rules and forms for common types of Canadian contests. For more information see: Contest Forms.

OVERVIEW

The federal Competition Act is Canada’s principal legislation governing advertising and marketing.  In addition to the Competition Act, a range of other federal and provincial laws can apply to advertising and marketing, including provincial consumer protection laws, sector-specific legislation (e.g., in relation to telecom, airlines, etc.) and Canadian federal packaging and labeling laws.

The Competition Act contains civil and criminal misleading advertising provisions that apply to false or misleading claims made to promote the supply or use of products, including services.

For a claim to be misleading, it must be proven that: (i) a representation (i.e., an advertising or marketing claim) has been made, (ii) to the public, (iii) to promote a product or business interest, (iv) that is literally false or misleading (or with a false or misleading general impression) and (v) the claim is “material”.  Criminal misleading advertising is substantially similar, but also requires that a claim be made “knowingly or recklessly” (i.e., with intent).

A few key points to note about Canada’s misleading advertising rules include:

1.  The misleading advertising sections of the Competition Act are broad enough to apply to claims made to promote products and services or “any business interest”.  As such, enforcement (or private actions) can be commenced in relation to a broad array of business and investment claims, and Canadian courts have interpreted “any business interest” very broadly.

2.  A representation to a single person may be caught.

3.  Both the literal meaning and “general impression” of a claim are relevant to determine whether a claim is false or misleading.  For example, claims that are literally true may nevertheless be false or misleading if their “general impression” is misleading – for example, where “banner” or “headline” claims strongly suggest one thing where disclaimers with additional information are ineffective in altering the overall general impression.

4.  It is not necessary to show that any person has actually been deceived or misled (or purchased a product or service) as a result of a claim.

5.  It is also not necessary to show that a claim was made to Canadian consumers (i.e., the relevant provisions expressly apply to cross-border marketing to non-Canadians) or was made in a publicly accessible place (i.e., the sections can apply to “private” marketing events, telemarketing or call center activities, etc.).

The Competition Bureau has issued an Information Bulletin (Misleading Representations and Deceptive Marketing Practices: Choice of Criminal or Civil Track under the Competition Act) that outlines its approach to determining whether to pursue the criminal or civil track for misleading advertising.  In general, the Bureau will in most cases follow the civil track unless certain criteria are satisfied including clear and compelling evidence that misleading advertising was engaged in intentionally and a criminal prosecution would be in the public interest.

In addition to the “general” misleading advertising provisions discussed above, the Competition Act also contains a number of other criminal and civil provisions that prohibit or regulate specific types of marketing practices, including deceptive telemarketing, deceptive prize notices, double ticketing, multi-level marketing, pyramid selling schemes, performance claims, ordinary price claims (e.g., in relation to sales), test and testimonial claims, bait and switch selling and promotional contests.

For more about Canadian advertising law visit: Canadian Advertising & Marketing Law.

PENALTIES

The potential penalties for contravening the civil misleading advertising provisions of the Competition Act include Competition Tribunal or court orders to cease the conduct, publish a corrective notice, pay restitution (i.e., compensate consumers) and/or pay “administrative monetary penalties” of up to $750,000 for individuals and $10 million for corporations.

Potential penalties for violating the criminal misleading advertising provisions include up to 14 years imprisonment and/or an unlimited fine (i.e., fines in the discretion of the court).

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SERVICES

Contest Law

I offer a full range of Canadian contest legal services for compliance with the Competition Act, Criminal Code and other relevant laws.  My services include: preparing contests to comply with relevant federal laws, drafting short and long contest rules and statutory disclosure, reviewing promotional contest marketing and advertising materials for Canadian advertising law compliance and winner releases.

Advertising Law

I help clients practically navigate Canada’s advertising and marketing laws and offer Canadian advertising law services in relation to print, online, new media, social media and e-mail marketing.

My Canadian advertising law services include advice in relation to: anti-spam legislation (CASL); Competition Bureau complaints; the general misleading advertising provisions of the Competition Act; Internet, new media and social media advertising and marketing; promotional contests (sweepstakes); and sales and promotions. I also provide advice relating to specific types of advertising issues, including performance claims, testimonials, disclaimers and native advertising.

Competition Law

I offer business and individual clients efficient and strategic advice in relation to competition/antitrust, advertising, Internet and new media law and contest law.  I also offer competition and regulatory law compliance, education and policy services to companies, trade and professional associations and government agencies.

My experience includes counseling clients on the application of Canadian competition and regulatory laws and I have worked on hundreds of domestic and cross-border competition, advertising and marketing, promotional contest (sweepstakes), conspiracy (cartel), abuse of dominance, compliance, refusal to deal, pricing and distribution, Investment Canada Act and merger matters.

To contact me about a potential legal matter: contact.