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Marketing practices

The Competition Act contains several 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, the Precious Metals Marking Act and the Textile Labelling Act are criminal statutes. They prohibit false and misleading representations in specific sectors (prepackaged consumer products (non-food); precious metal articles; and textiles and apparel). These laws also prescribe basic, standardized labelling requirements, such as bilingual product descriptions, metric measurement declarations and dealer identity, which allows consumers to make informed choices.

False or 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 competitors who are engaging in honest promotional efforts and consumers.

For more information on the above provisions

False or misleading representations

The Competition Act, the Consumer Packaging and Labelling Act, the Textile Labelling Act and the Precious Metals Marking Act prohibit representations that are false or misleading.

Deceptive telemarketing

The Competition Act prohibits the making of false or misleading representations in order to promote 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 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.

Price-related representations

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

Promotional contests

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.