On June 28, 2011, Bell Canada entered into a Consent Agreement with the Commissioner of Competition that will require Bell to pay a $10-million administrative monetary penalty for making false or misleading representations in its advertising regarding the prices consumers are required to pay for its Home Phone, Internet, Television, and Wireless services.
Upon completion of its investigation, the Competition Bureau concluded that Bell has, since December 2007, advertised monthly prices which were lower than the actual price it charges consumers for its services. Section 74.01 of the Competition Act prohibits any representation to the public, for the purposes of promoting a product, that is false or misleading in a material respect, and takes into account both the general impression conveyed by a representation as well as its literal meaning.
The Competition Bureau argued that, in order to identify any additional fees (e.g., TouchTone, modem rental and digital television services) applicable to an advertised price, consumers were redirected to other sources, including disclaimers on Bell’s website. The Commissioner found that the representations in Bell’s fine-print disclaimers included additional mandatory fees that were omitted from the advertised prices, and, as such, created a false general impression to consumers regarding the price at which they were able to purchase services.
In the Consent Agreement, Bell Canada has agreed to:
- Pay a $10-million administrative monetary penalty, as well as cost and disbursements to the Competition Bureau related to their investigation;
- Take immediate steps to cease any false or misleading representations regarding its services which are currently being published, disseminated or communicated to the public;
- Not make false or misleading representations in the future in respect of the prices of its services;
- Not make any new representations that convey a general impression which is contradicted by an accompanying disclaimer.
“Bell has agreed to resolve the issue with a consent agreement and move forward rather than going through a lengthy and costly legal challenge,” said Bell spokesperson Jacqueline Michelis, as quoted in the June 30, 2011 issue of the The Wire Report. As Bell agreed to a Consent Agreement, limited information will be made publicly available regarding the Bureau’s investigation. However, the fact that the Bureau sought the maximum AMP under the civil reviewable matter provisions for misleading advertising, $10 million for a company’s first offence, is a clear indication that the Bureau wants to send a message to advertisers at large. Going forward, to avoid running into similar problems with the Bureau, companies may wish to consider moving to “all-in” pricing in their advertisements that include all applicable fees and charges in the advertised price, and should also be cautious in relying on fine-print disclaimers to clarify material limitations in the offers they make to consumers.