The Competition Bureau has released the first issue of its Deceptive Marketing Practices Digest (formerly the Misleading Advertising Bulletin). The purpose of the Digest is to present the Bureau’s perspective on advertising and marketing matters in a timely manner.
In the first issue, the Bureau addresses the following online advertising and marketing issues: 1) the use of disclaimers; 2) astroturfing; 3) online behavioural advertising (OBA); 4) geolocation; and 5) drip-pricing. The Bureau notes that these issues present common problems which are not limited to online advertising; notably, the risk of deceiving consumers via false or misleading representations. The Bureau indicates that this problem is due in large part to the inadequate disclosure of information that consumers need to make informed choices. This problem can arise where online information is misleadingly presented as coming from an arms‑length source (also a problem for native advertising and sponsored content). The Bureau notes that this problem can also arise when necessary information (for example, additional costs or additional material conditions) is hidden or buried in disclaimers.
The first issue includes relatively in-depth guidance on the proper use of disclaimers and the problems associated with astroturfing In particular, the Bureau outlines the right way and the wrong way to use disclaimers. The right way to use disclaimers is to expand on, or clarify possible ambiguities in a claim located in the body copy. The Bureau indicates this use of a disclaimer is unlikely to mislead consumers. In contrast, the use of a disclaimer to restrict, or somehow negate a claim in the body copy of an advertisement is not appropriate. However, the Bureau notes that if a claim in the body copy, considered on its own, creates a materially false or misleading general impression, then it is unlikely that a disclaimer will alter this general impression.
On the topic of astroturfing (i.e. making representations that appear to be authentic consumer reviews, but are actually made by a party with a vested interest), the Bureau takes the position that there is ample evidence to conclude that these representations are “material” (as this term is used in the misleading advertising provisions of the Competition Act). Accordingly, the Bureau indicates there is a need to disclose any “material connection” between the party making the representation and the entity/product/service addressed in the representation.
Finally, the Bureau gives a nod to its international consumer protection partners (notably the U.S. Federal Trade Commission, the Australian Competition and Consumer Commission and the U.K. Competition and Markets Authority), indicating it keeps abreast of their law enforcement practices in these areas. On this point, we eagerly await the next issues.