Rogers Wants End to False Advertising Laws

[jon]

Cellphone case challenges Competition Act
By Sarah Schmidt, Postmedia News
August 5, 2012

OTTAWA — A company’s right to free expression is up against Canada’s truth-in-advertising rules as Rogers Communications and the Competition Bureau begin to duke it out in court Tuesday over the constitutionality of the Competition Act.

In the first of its kind in Canada, Rogers will ask the Ontario Superior Court to strike down a key provision in the federal law requiring companies to have “adequate and proper” tests of a product’s performance before making performance claims in advertisements. Rogers says this testing requirement violates its right to freedom of expression enshrined in Canada’s Charter of Rights and Freedoms.

The telecom giant will also argue the hefty financial penalties that the Competition Bureau can slap on a company for making a false or misleading claim are unconstitutional because a $10-million administrative penalty is in effect a criminal fine, yet the process does not afford the company the safeguards of the criminal law process guaranteed in the Charter.

The company’s legal manoeuvre comes after the Competition Bureau went to court in November 2010 seeking to levy a $10-million penalty for an alleged misleading advertising campaign involving a discount cellphone carrier of Rogers.

The Chatr advertising campaign, launched with the entry of upstart competitors like Wind Mobile in the market, claimed that Chatr had “fewer dropped calls than new wireless carriers” and its customers have “no worries about dropped calls.”

If Rogers is successful, the case could have ramifications for other laws in Canada — and the advertising industry, Michael Janigan, executive director and general counsel at Public Interest Advocacy Centre, said in an interview.

“At its root, the case effectively advances the proposition that companies that advertise shouldn’t be forced to actually have the facts and evidence on hand before they make a claim and it somehow devalues public discourse if they are forced to do so. With all due respect to that position, it sounds a bit like a Madison Avenue wet dream,” said Janigan, a reference to New York City’s iconic street that housed most ad agencies in the industry’s early years and is now used rhetorically for advertising.

In a statement, Rogers countered that its beef with the Competition Act is a narrow one.

“We’re committed to truth in advertising and support legislation that prevents false claims and protects consumers, including the Competition Act. We’re not challenging that fundamental principle. We’re raising two specific, narrow concerns with the act as it now stands,” spokeswoman Patricia Trott said.

Commissioner of Competition Melanie Aitken says these two provisions dealing with false or misleading representations and the requirement for proper and adequate testing are “essential to the bureau’s efforts to protect consumers and businesses from anti-competitive behaviour.”

Aitken added in a statement that the bureau is “confident” in its legal position.

In launching its case against Rogers, the bureau said it conducted an investigation that involved an extensive review of technical data obtained by a number of sources, and concluded there were “no discernible differences in dropped call rates between Rogers’ discount service and new entrants.”

The bureau relied on an updated provision in the Competition Act brought in by the Conservative government in 2009. It increased the maximum administrative monetary penalty remedy available under the misleading advertising provisions to $10 million for first-time violation corporations, up from $100,000, in effect since 1999. A penalty, considered a civil matter in the act, is different than a fine, reserved for criminal cases.

Under this new regime of higher AMPS, the bureau struck a deal with Bell Canada in June 2011. The company agreed to pay the maximum administrative penalty of $10 million after the bureau concluded that Bell had charged higher prices than advertised for many of its home services.

Janigan said the Tory government’s push for large administrative monetary penalties in other acts, including its signature Consumer Product Safety Act in 2011, means the outcome of the case could have a ripple effect.

“If the court found that the quantum is a mechanism subject to criminal procedure, then it would certainly have a chilling effect on the use of AMPs,” said Janigan.

The court has reserved a full month to hear the case, with time initially set aside for evidence about the constitutionality of key provisions of the Competition Act.

The case is certainly on the government’s radar, according to internal correspondence released to Postmedia News under access to information. Both the offices of Justice Minister Rob Nicholson and Industry Minister Christian Paradis inquired separately with Department of Justice officials about the case after Postmedia published a story in January about the preliminary outline of arguments filed in court by Rogers to support its constitutional validity motion.

Rogers, represented by counsel at Davies Ward Phillips & Vineberg, argued that administrative monetary penalties “of this magnitude are criminal in nature and constitute true penal consequences. Yet the civil proceedings under which Financial Penalties of this nature can be imposed deny respondents many of the procedural and other safeguards of the criminal law process guaranteed by Section 11 of the Charter.”

Those safeguards include: presumption of innocence, the right to a fair trial and to make full answer and defence, and the privilege against testimonial compulsion.

Rogers also argued the “adequate and proper’’ test requirement in the Competition Act, requiring tests be performed before a company makes a performance claim, violated the company’s right to freedom of expression. This section in the Competition Act “prohibits and penalizes entirely truthful claims, including claims made on a reasonably held belief that such claims are entirely accurate and claims that are proven to be entirely accurate through post-claim testing. Not only are these types of claims entirely harmless, but they play an important role in consumer choice and may have a significant positive impact on prices and product innovation,’’ Rogers argued in court records.

Rogers has also previously said that the company stands by the ad campaign and said its claims were backed up by tests.

ref. - http://www.edmontonjournal.com/business ... story.html

[isthisthingon]

In my experience, Rogers never, ever had a problem taking money for airtime from numerous companies and individuals now or recently in big trouble with various provincial Securities Commissions. When I pointed out how obviously crooked some of these get-rich-quick schemes were (ie Dave Jones/Wealthstreet, Shire Investments and other crooks), I was told to shut up and let the sales reps earn their commissions. In the end, Rogers and all the corporations (even the Christian stations) and their reps made plenty of money, while investors - believing that paid financial ads must be vetted at some point (you'd think) - lost tens of millions in savings, houses, cars, jewelry and loans taken to buy into these schemes. Plus the CRA wants their share of the money from before it was stolen. The only ones who profited and came out squeaky clean were Rogers et al.

[Mike Cleaver]

Can you say "up to" when it comes to advertising internet speeds?
Lying is in that companies DNA.
Look at the latest L&W posts where they confirm Robbers wanted them to lie about why they're no longer there.

[Tape Splicer]

"Truth in advertising", "consumers rights", "negative billing", - all of these pieces of legislation or what should be "good business practices" could potentially be wiped out should the courts throw out regulations that have come into being over a number of years. Legislation that has for the most part done a reasonable job of protecting the every day consumer.

If I recall, "negative billing" laws came into existence as a direct result of cable companies (Rogers) in BC cramming multiple tiers down the coax of people who wanted (at the time) basic and a CHOICE of what to add to that basic service. I believe that prior the the "negative billing" laws were brought in: You'd get a free preview of a tier of channels, and if you didn't tell the CATV co. that you wanted the signal cut, you were billed.

Some of the "consumer rights" legislation resulted from door-to-door sales contract that were not worth the paper they were printed on. As a result there is a "cooling off period" (3 days I think) to back out of a contract that is signed at the door.

If some one is selling wigets or gismos on TV or radio, I want to know that what is climed about those wigets or gismos is what I will get - nothing more, nothing less.

The bottom line to all this should be - Conduct your business in an HONEST manor and the consumer will come looking for the product or service you are promoting. Conduct your business in a DISHONEST manor, and the consumer will walk away. It comes down to TRUST.

[Howaboutthat]

However a lot of the time it comes down to greed, gullibility, stupidity and greed.
I can't believe people are still falling for get rich quick scams and various versions of the Nigerian letter.
Many people get what they deserve as there will always be scammers out there and as isthisthingon correctly said, as long as they pay their bill, advertisers will take their money.

[Mike Cleaver]

As far as truth in advertising goes, there's no better example of outright lies than on those infomercials every TV channel runs after 11pm and radio runs on the weekends.
As I've always said, the "product" being sold "works fine on TV but not when you get it home."
As for negative billing, Robbers always will be remembered for that stunt in Ontario as well.
Getting the first bill after the "free" preview was a giant shock for most of their subscribers who could not read the miniscule fine print.
Robbers was thoroughly smacked for that scam but it hasn't stopped them from trying to con and defraud their customers, viewers and listeners.

[Tape Splicer]

This is one time when the "Track Record" of a company, in the area of "honest dealing" should also be taken into account when the court rules - not only the clever arguments of a highly paid, fancy suited, smooth tounged lawyer. Perhaps "blind justus" should not always be so blind.

As for "infomercials" on radio and TV, or phone calls with claims that are too good to be true - If it sounds or looks like it's too good to be true, it is. DON'T bite.

We had one of those "grandson in trouble' calls not long ago - the pitch was to send money to bail the kid out of the clink, and don't tell anybody about it - "CLICK", no calls like that since.

[slowhand]

However a lot of the time it comes down to greed, gullibility, stupidity and greed.
I can't believe people are still falling for get rich quick scams and various versions of the Nigerian letter.
Many people get what they deserve as there will always be scammers out there and as isthisthingon correctly said, as long as they pay their bill, advertisers will take their money.

What do you propose? No regulation or laws against any of this? Some scammers are extremely good at their job and can fool even the smartest of us. With nothing to threaten them, this would only get worse.

[RogersMary]

Hi All - This is Mary from Rogers Social Media team. Typically, we try to help customers online with any issues/questions they may have and we are also available on Twitter via @RogersHelps. In this case, I just wanted to point out that the headline of the thread is not accurate. Rogers is not trying to end false advertising laws.

We strongly support clear, accurate and consumer friendly advertising. We’re committed to truth in advertising and support legislation that prevents false claims and protects consumers, including the Competition Act. I wanted you all to know that we are not challenging that fundamental principle. We are not asking for truth in advertising protections to be struck from the Act.

Our position in this case is that the advertisements of Chatr were true and accurate in every respect and were supported by adequate and proper testing. Our argument is that two specific provisions of the Competition Act being relied upon by the Competition Bureau in this proceeding are constitutionally invalid.

Appreciate your time - thanks.
Mary
@RogersMary

[Tape Splicer]

RogersMary: It took some courage to respond with the corporate view - In fact you were very gracious with your response. Your statement was clear and to the point - Your response reminded me of a line from "The Desiderata" which reads: ".... As far as possible without surrender be on good terms with all persons. Speak your truth quietly and clearly; ...." I suspect that the headline for this thread " Rogers Wants End to False Advertising Laws" was written to attract the reader. The articles headline; "Cellphone case challenges Competition Act" was also designed to attract readers attention. Both got your attention and elicited a response. Thank you

[jon]

In the first of its kind in Canada, Rogers will ask the Ontario Superior Court to strike down a key provision in the federal law requiring companies to have “adequate and proper” tests of a product’s performance before making performance claims in advertisements. Rogers says this testing requirement violates its right to freedom of expression enshrined in Canada’s Charter of Rights and Freedoms.

Seems pretty clear to me. Unless what is written in these two sentences is incorrect, Rogers is asking the Ontario Superior Court to rule that "freedom of expression" trumps the need for scientific proof of a technical performance claim in advertising.

If Rogers wins this case -- or, better stated, the version of this case that gets to the Federal Supreme Court -- it will set the precedent that allows anyone to make a claim of technical performance without anything other than "Gee, I thought it did that" with no proof to back it up. On the grounds that their advertising is protected by the Charter's Freedom of Expression clauses.

And, since when did the Charter protect Corporations?

[RogersMary]

Thank you Tape

Jon - I'll try to provide a bit more context. In this case, we've raised two specific, narrow concerns with the Act as it now stands.

1. We believe that the 2009 increase in the fines to $10 million and to $15 million for subsequent events makes this provision effectively criminal in nature (not civil) and so the rights and protections guaranteed under the Charter for criminal proceedings should apply.... for example, the presumption of innocence. We believe that is inappropriate to permit such large penalties under the civil provisions of the Act when parties don’t have the same rights and protections guaranteed under criminal proceedings. Those safeguards include: the presumption of innocence, the right to a fair trial and to make full answer and defense. Many commentators have raised concerns about this provision for this reason.

2. The requirement for what is called an `adequate and proper test', which requires such tests be performed before a company makes a performance claim. This has meant that advertisers, not just Rogers but also the individual business person as well as larger companies, could be prohibited from making perfectly true factual claims that are substantiated by well-established scientific principles, just because they hadn’t done testing.

Just to reiterate my previous point, we're not challenging that fundamental principle or asking for truth in advertising protections to be struck from the Act.

I'm not sure what more I can contribute to this conversation but again I do appreciate the opportunity to put it out there. Thanks all

[jon]

This clarification gets to the root of the disagreement:

This has meant that advertisers, not just Rogers but also the individual business person as well as larger companies, could be prohibited from making perfectly true factual claims that are substantiated by well-established scientific principles, just because they hadn’t done testing.

In Science, "perfectly true factual claims that are substantiated by well-established scientific principles" are known as Scientific Theories. "testing" is known as Scientific Experiments. The third and final step of "proof" from a scientific point of view is Peer-Reviewed Publication of the results of those Experiments. If the Scientist survives that third step unscathed, only then is the original Theory accepted as Fact.

I speak from experience, having a Bachelor of Science degree from UBC, and putting scientific principles into practice in a three decade career.


Nice to see a large corporation take a more modern approach to social media. Participating in the discussion rather than the traditional approach of trying to shut it down by having the local manager get a lawyer to phone the owner of the social media outlet.