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Court Drops Misleading Advertising Case Against Rogers

Man on cell phoneRogers’ advertising claims that customers of its Chatr brand experienced fewer dropped calls than customers of new entrants, including Wind Mobile and Public Mobile, were not false or misleading, the Ontario Superior Court held in dismissing, in large part, an application by the Commissioner of Competition.

The court did find, however, that Rogers did not conduct adequate and proper tests before making certain representations in Calgary, Edmonton, and Montreal, thus breaching paragraph 74.01(1)(b) of the Competition Act.

Other highlights of the decision include:

  • Drive testing is capable of adequately and properly testing the fewer dropped calls claim.
  • The court applied the “credulous and technically inexperienced consumer” standard. This standard was derived from the decision of the Supreme Court in Richard v Time Inc.
  • The Competition Act’s civil misleading advertising provision (specifically, s. 74.01(1)(b)) does not violate the Charter of Rights and Freedoms. Although the provision infringes s. 2(b) (freedom of expression), it is a demonstrably justifiable and reasonable limit that is saved by s. 1 of the Charter.
  • Administrative monetary penalties (AMPs) of up to $10 million ($15 million for subsequent violations) provided for in the Competition Act’s civil deceptive marketing practices provisions are not “true penal consequences”, and thus they do not engage the protections afforded in criminal proceedings under s. 11 of the Charter.

The Commissioner of Competition, John Pecman, expressed his disappointment in a statement: “We are disappointed that the Court did not agree that Rogers’ claims were misleading to consumers, and we are currently considering our next steps in this matter. Nevertheless, we are pleased that the Court has dismissed the constitutional challenges brought forth by Rogers, and has agreed with our position that Rogers did not conduct adequate and proper testing beforehand to support its claims about dropped calls in some Canadian cities.”

We expect to post an analysis of this important decision soon.

W. Michael G. Osborne
Affleck Greene McMurtry LLP

W. Michael G. Osborne

Michael Osborne is a former Partner of Affleck Greene McMurtry LLP

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