Yesterday, the Commissioner of Competition (the Commissioner) entered into a Consent Agreement (the Agreement) with Reebok-CCM (Reebok) requiring the company to stop making certain performance claims in connection with the company’s CCM Resistance hockey helmet.
According to the Competition Bureau’s (the Bureau) press release, Reebok’s ads for the hockey helmets at issue included words, images and videos that created the impression that the helmet would protect players from serious head injuries, such as concussions. According to the Agreement, Reebok-CCM had made significant investments in research and development through its partnership with University of Ottawa’s Neurotrauma Impact Science Laboratory (NISL) with respect to testing of helmet technologies. Although the Commissioner recognized that the company had retained NISL to conduct significant testing on the helmet prior to making the claims, he concluded that the testing was not adequate and proper to support the marketing claims.
The Agreement requires Reebok-CCM to:
- Donate $475,000 worth of sports equipment to a charity that supports youth in sports (in lieu of paying an Administrative Monetary Penalty or AMPs);
- Remove or modify the remaining claims from all marketing material, including packaging and online advertising;
- Implement an enhanced corporate compliance program and take steps to ensure that retailers do not continue to make the Performance Claim; and
- Pay $30,000 toward the cost of the Bureau’s investigation.
The Bureau’s announcement comes almost a year after it took similar enforcement action against helmet manufacturer Bauer for having made similar types of claims regarding its RE-AKT helmet. This recent enforcement action highlight’s the Bureau’s ongoing focus on ensuring the accuracy of health and safety performance claims given their significant impact on consumer purchasing decisions (in particular, with regard to protection against concussions).
Interestingly, the Agreement acknowledged that Reebok-CCM made significant investments in NISL to advance helmet testing research and commissioned it to conduct significant testing on its CCM Resistance helmet prior to making the performance claims in question. Despite this, the Commissioner believed that the claims in question were unsupported by adequate and proper testing. Unfortunately, neither the Bureau’s press release nor the Agreement provide any insight as to whether or how the performance claims by Reebok-CCM went beyond what the NISL testing data. However, this case highlights the significant uncertainty regarding how the Bureau will assess the adequacy of prior testing and how businesses can ensure that meet the “prior adequate testing” threshold – in particular, with respect of product safety claims. This case also suggests that businesses need to take care when extrapolating performance claims from scientific test data.
Additionally, businesses relying on performance claims should assume that their claims will be scrutinized not only by Canadian consumers, but also competitors. It is not uncommon that competitors will submit complaints to the Bureau challenging the accuracy of a performance claim and arguing that it is misleading and/or unsubstantiated. The frequency of firms complaining about the claims made by their competitors reinforces the need for companies to ensure they conduct appropriate testing (e.g., by engaging a third party to conduct testing which are benchmarked to recognized industry standards) prior to making performance claims.