Competition Bureau
ToolsRelated topicsResourcesMisleading Representations and Deceptive Marketing Practices
What Is the Competition Bureau?The Competition Bureau is an independent law enforcement agency responsible for the administration and enforcement of the Competition Act, the Consumer Packaging and Labelling Act, the Textile Labelling Act and the Precious Metals Marking Act. Its role is to promote and maintain fair competition so that Canadians can benefit from competitive prices, product choice and quality services. Headed by the Commissioner of Competition, the organization investigates anti-competitive practices and promotes compliance with the laws under its jurisdiction. What Is the Competition Act?The Competition Act is a federal law governing most business conduct in Canada. It contains both criminal and civil provisions aimed at preventing anti-competitive practices in the marketplace. 
Misleading Representations and Deceptive Marketing Practices Provisions of the Competition ActThe Competition Act contains provisions addressing false or misleading representations and deceptive marketing practices in promoting the supply or use of a product or any business interest. All representations, in any form whatever, that are false or misleading in a material respect are subject to the Act. If a representation could influence a consumer to buy or use the product or service advertised, it is material. To determine whether a representation is false or misleading, the courts consider the "general impression" it conveys, as well as its literal meaning. The Competition Act specifically prohibits deceptive telemarketing, deceptive prize notices and schemes of pyramid selling, and sets out the responsibilities for operators and participants in multi-level marketing plans. Also addressed are deceptive marketing practices including, but not limited to, advertising at a bargain price a product that is not available in reasonable quantities; selling a product at a price above the advertised price; and conducting a contest, lottery, or game of chance or skill, without making adequate and fair disclosure of facts that materially affect the chances of winning. Misleading representations and deceptive marketing practices can have serious economic consequences, especially when directed toward large audiences or when they take place over a long period of time. They can affect both business competitors who are engaging in honest promotional efforts, and consumers. What Are the Possible Penalties?The Act provides two adjudicative regimes to address misleading representations and deceptive marketing practices. Under the criminal regime, certain practices are brought before the criminal courts, requiring proof of each element of the offence beyond a reasonable doubt. On summary conviction, the person is liable to a fine of up to $200 000 and/or imprisonment for up to one year. If convicted on indictment, the person is liable to a fine at the discretion of the court and/or imprisonment for up to five years. Under the civil regime, certain practices may be brought before the Competition Tribunal, the Federal Court or the superior court of a province and require that each element of the conduct be proven on a balance of probabilities. The court may order a person to cease the activity, publish a notice and/or pay an administrative monetary penalty. On first occurrence, individuals are liable to penalties of up to $50 000 and corporations are liable to penalties of up to $100 000. These amounts may double for second and subsequent occurrences. The Bureau conducts its investigations in private and keeps confidential the identity of the source and the information provided. However, if someone has important evidence about a contravention under the Act, that person may be asked to testify in court. Advertising Dos and Don'tsThe following "Dos and Don'ts" will help businesses comply with the Competition Act. Dos
Don'ts
How Do I File a Complaint?If you believe that someone has in some way contravened any of the legislation enforced and administered by the Bureau and you want to complain, you can telephone, fax, e-mail or write the Bureau at the numbers listed at the end of this publication. The Bureau conducts its investigations in private and keeps confidential the identity of the source and the information provided. However, if someone has important evidence about a contravention of any of the acts the Bureau administers, that person may be asked to testify in court. Written opinionsThe Competition Bureau facilitates compliance with the law by providing various types of written opinions subject to fees. Company officials, lawyers and others are encouraged to request an opinion on whether the implementation of a proposed business plan or practice would raise an issue under the Competition Act. These written opinions are binding on the Commissioner of Competition when all the material facts have been submitted by or on behalf of an applicant for an opinion and when they are accurate. A specific written opinion will be based on information provided by the requestor and will take into account previous case law, prior opinions and the stated policies of the Bureau.
Cat. No. RG52-29/8-2003 
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Created: 2003-02-11 Updated: 2006-03-02 |
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