Competition Bureau
Tools
Related topicsResourcesMarketing practices - ProhibitionsThe Bureau is responsible for the administration and enforcement of the Competition Act, a law of general application governing most business conduct in Canada as well as three laws promoting fair representation in the marketing of consumer products: namely the Consumer Packaging and Labelling Act, the Textile Labelling Act, and the Precious Metals Marking Act. The Competition Act contains criminal and civil provisions to address false or misleading representations and deceptive marketing practices in promoting the supply or use of a product or any business interest. Under the criminal regime, the general provision prohibits all materially false or misleading representations made knowingly or recklessly. Other provisions specifically prohibit deceptive telemarketing, deceptive notices of winning a prize, double ticketing, and schemes of pyramid selling. The multi-level marketing provisions define the responsibilities of operators and participants in multi-level marketing plans. Under the civil regime, the general provision prohibits all materially false or misleading representations. Other provisions specifically prohibit performance representations not based on adequate and proper tests, misleading warranties and guarantees, false or misleading ordinary selling price representations, untrue, misleading or unauthorized use of tests and testimonials, bait and switch selling, and the sale of a product above its advertised price. The promotional contest provisions set out the requirements for conducting a contest, lottery, or game of chance or skill. The Consumer Packaging and Labelling Act, Textile Labelling Act and the Precious Metals Marking Act are criminal statutes. They prohibit false or misleading representations in specific sectors (prepackaged consumer products (non-food), precious metal articles, and textiles and apparel). In addition, this legislation prescribes basic, standardized labelling information, such as bilingual product descriptions, metric measurement declarations and dealer identity, which allows consumers to make informed choices. How is the law enforced?Under the criminal regime of the Competition Act as well as under the Consumer Packaging and Labelling Act, the Textile Labelling Act, and the Precious Metals Marking Act, certain practices may be brought before the criminal courts, requiring proof of each element of the offence beyond a reasonable doubt. If the results of an investigation disclose evidence that, in the opinion of the Commissioner, provides the basis for a criminal prosecution, the matter may be referred to the Attorney General of Canada, who determines whether a prosecution should be undertaken. Under the civil regime of the Competition Act, certain practices may be brought for review before the Competition Tribunal, the Federal Court or the superior court of a province. To establish a breach of these provisions, each element of the conduct must be proven on a balance of probabilities. Not all complaints result in a prosecution or in an application to the court. The Commissioner may employ a variety of instruments to promote and maintain conformity with the law. Depending on the circumstances, a temporary or permanent court order may be sought prohibiting a party from committing an offence or engaging in reviewable conduct. Alternatively, an undertaking - in essence a written promise - which will establish future conduct in respect of a particular practice, may be voluntarily given by a party under investigation. Further, an information letter may be provided in cases where the facts demonstrate a possible contravention of the Act and the alleged wrongdoer is unaware of the relevant statutory provisions. Due to the large volume of complaints received each year, the Commissioner has established a system for the selection of cases that best meet the objectives of the legislation. In prioritizing enforcement activity, the Commissioner reviews matters in relation to the following criteria: economic impact, the Bureau's enforcement policies and priorities, and the financial and human resources required to pursue a specific matter. These criteria have been developed to ensure that the Commissioner's discretion over enforcement matters under the acts is exercised in an objective and consistent manner. Some of the economic considerations used in assessing the priority to be given to a complaint include: the nature and scope of the practice, its impact on consumers and competition, and the need for government intervention to restore balance in the market. The enforcement considerations include: the number and source of complaints, the potential value of a case in developing jurisprudence on particular issues, whether the practice was intentional or inadvertent, whether the matter is a national issue and the impact a successful court proceeding would have on the marketplace. Finally, resource considerations include: the availability of human resources to effectively examine the complaint, availability and location of the evidence and the financial cost of gathering evidence.
False or misleading representations The Competition Act prohibits knowingly or recklessly making, or permitting the making of, a representation to the public, in any form whatever, that is false or misleading in a material respect. The Consumer Packaging and Labelling Act requires that prepackaged consumer products bear accurate and meaningful labelling information to help consumers make informed purchasing decisions. The Textile Labelling Act requires that consumer textile articles bear accurate and meaningful labelling information to help consumers make informed purchasing decisions. The Precious Metals Marking Act provides for the uniform description and quality marking of precious metals articles (articles made with gold, silver, platinum or palladium) to help consumers make informed purchasing decisions. The Competition Act prohibits the making, or the permitting of the making, of materially false or misleading representations in promoting the supply of a product or a business interest during person-to-person telephone calls. Deceptive notices of winning a prize The Competition Act prohibits notices that give the general impression that you have won a prize or any other benefit, and asks or gives you the option to pay money or incur a cost in order to obtain the prize or benefit. Multi-level Marketing and Pyramid Selling The Competition Act explains the differences between multi-level marketing plans and schemes of pyramid selling, and sets out the responsibilities for operators and participants in these types of plans. Multi-level marketing, when it operates within the limits set by the Competition Act, is a legal business activity, while a scheme of pyramid selling is illegal as defined by the law. Performance representations not based on adequate and proper tests The Competition Act prohibits any representation in the form of a statement, warranty or guarantee of the performance, efficacy or length of life of any given product, not based on adequate and proper testing. The onus is on the person making the representation to prove that the representation is based on an adequate and proper test. Several provisions of the Competition Act deal with price representations: - False or misleading ordinary selling price representations - Bait and switch selling - Sale above advertised price - Double ticketing The Competition Act prohibits any promotional contest that does not disclose the number and approximate value of prizes, the area or areas to which they relate and any important information relating to the chances of winning such as the odds of winning. Misleading warranties and guarantees The Competition Act prohibits any representation that purports to be a warranty or guarantee of a product, or a promise to replace, maintain or repair an article, or any part of an article, where it is materially misleading or where there is no reasonable prospect that the warranty, guarantee or promise will be carried out. Untrue, misleading or unauthorized use of tests and testimonials The Competition Act prohibits the unauthorized use of tests and testimonials, or the distortion of authorized tests and testimonials. The provision also prohibits a person from allowing such representations to be made to the public.
In the News:Telemarketer Sentenced to Jail Competition Bureau Participates in Boiler-Rooms Take-Downs Competition Bureau seizes sunglasses with misleading claims Competition Bureau Challenges Weight Loss Claims Made by Quebec Companies 
|
|
Created: 2005-03-31 Updated: 2005-09-30 |
 Top of Page |
Important Notices |