Section 74.01 of the Competition Act (the Act) relates to false or misleading representations and ordinary selling price claims. Enforcement of that section of the Act remains a priority for the Competition Bureau (the Bureau), particularly in the current economic climate. In fact, in March 2009, the Bureau announced that it had resolved concerns relating to s. 74.01 with three retailers – Moores Clothing for Men (Moores), Curry’s Art Store Limited (Curry’s), and The Brick Warehouse LP (The Brick).
The Bureau found that Moores had made misrepresentations to the public when it advertised a “buy one get one free” sale on designer suits without disclosing that the sale only applied to certain suits. The Bureau noted that advertisers must “clearly and conspicuously disclose any limitations or exclusions on their advertisements to ensure that consumer’s can make informed purchasing decisions.” Moores agreed to correct its advertising to disclose that the sale applied to select designer suits.
The Bureau also found that The Brick had engaged in false or misleading representations when it advertised an $80 national mail-in rebate which gave the general impression that consumers would receive a cash or cheque rebate as opposed to a gift certificate to be credited towards future purchases at the store. (For more information on the Bureau’s approach to consumer rebate promotions, see the article, “Competition Bureau Provides Guidance on Rebate Promotions”). The Brick agreed to cancel all advertising featuring this rebate promotion and to provide consumers who were eligible for the rebate with an $80 rebate cheque.
Curry’s was found to have contravened the ordinary price selling provisions of the Act when it ticketed products both with the manufacturer’s suggested retail price and a lower Curry’s price. This practice implied that the difference between the two prices resulted in a greater discount to consumers, despite the fact that the products were never sold at the suggested retail price. Curry’s was fined an administrative monetary penalty of $60,000 and also entered into a 10-year consent agreement. Under the terms of that agreement, Curry’s is required to display a corrective notice, make sure that all future price advertising complies with the Act and create a corporate compliance program to ensure compliance with the Act.