Until recently, the Ontario courts would prosecute marketers under s.52 of the Competition Act (Act) for false or misleading representations made to foreign individuals only if some of the victims were located in Canada so as to establish a real and substantial link between the offence and Canada. On February 17, 2009 the Ontario Court of Appeal, in R. v. Stucky, held that a real and substantial connection exists when the alleged false or misleading representations are initiated in Canada and the associated profits are similarly received in the country, despite the fact that the representations were made to people outside of Canada. Relying largely on Canada Criminal Code jurisprudence and the statutory principles of interpretation, the court held that s.52 of the Act is not domestically oriented and, thus, should not be restricted in meaning to the Canadian public. The court concluded that the criminal prosecution of fraudulent marketers which target foreign individuals will protect the reputation and business of law-abiding Canadian companies engaged in international marketing. Such prosecution will also support the agreements made between Canada and the United States to combat cross-border deceptive marketing practices.
This decision mirrors sections of Bill C-10, the Budget Implementation Act, which received First Reading in the House of Commons on February 2, 2009. The Bill proposes (among other things) significant amendments to the criminal and civil provisions of the Act that would create a more robust regime dealing with misleading advertising matters. The Bill states that, in determining whether a person has engaged in reviewable conduct or has made criminally false or misleading representations, it is not necessary to establish that any member of the public to whom the representation was made was in Canada. For more information on Bill C-10, click here.