The Competition Bureau has filed an application with the Competition Tribunal against Aviscar and Budgetcar, and their parent company, Avis Budget Group Inc., alleging deceptive marketing practices contrary to several provisions of the Competition Act. The Bureau’s investigation into the pricing practices of Avis and Budget, two of the largest rental car companies in Canada, uncovered price representations which the Bureau considers to be false or misleading in a material respect, dating back to 1997.
In its Notice of Application, the Bureau submits that the prices advertised to the public by Avis and Budget are “not in fact attainable,” thereby creating a false general impression about prices and discounts. The Bureau submits that actual rental costs could be up to 35% higher than advertised once “non-optional” fees imposed by both companies are included. Although these “non-optional” fees are known to Avis and Budget, the Bureau alleges that the companies choose to exclude them from advertised prices and/or discounts. The Bureau also alleges that the “non-optional” fees, once revealed to the customer, are characterized as charges being imposed on customers by governments or other third-parties, when in fact they are Avis’ and Budget’s own charges related to the cost of doing business.
The representations in question were allegedly made across a broad range of media including print, mobile applications, online, oral representations and electronic messages. Because the Bureau’s case involves allegations of deceptive marketing practices carried on through electronic messages, this proceeding is the Bureau’s first under the new provisions of the Competition Act that were implemented as part of Canada’s Anti-Spam Legislation (CASL) in July 2014.
The relief sought by the Bureau includes an end to the alleged false or misleading price representations, $30 million in administrative monetary penalties ($10 million from each of the three companies), and reimbursements to affected consumers. The Bureau estimates that Avis and Budget have accrued over $35 million worth of “non-optional” fees since March 2009. None of the Bureau’s allegations has been proven before the Competition Tribunal.
Clarity and accuracy in pricing were the core themes in 2011 when the Bureau investigated Bell Canada and ultimately entered into a consent agreement in which Bell agreed to pay a $10-million administrative monetary penalty for making allegedly false or misleading representations in its advertising regarding its home phone, Internet, television, and wireless service prices. Now, almost four years later, the Commissioner of Competition remains focused on the accuracy of pricing claims, stating that "consumers are entitled to clear and precise information when making their purchasing decisions and need to be confident that the information they receive regarding additional fees is truthful and accurate."