The Competition Bureau of Canada’s recent decision to impose a $10-million monetary penalty against a telecommunications company for misleading advertising has the advertising industry in a wary state. The Bureau’s decision, which marked the first time that the maximum  

administrative monetary penalty allowed for corporations under the Competition Act was imposed, made abundantly clear the Bureau’s resolve to punish severely the misleading use of fine print and disclaimers in advertising. In this instance, the corporation was fined for charging higher prices than those advertised and hiding additional mandatory fees in fine-print text.

Asterisk users, take heed: the use of disclaimers or fine print will not protect you in cases where such information contradicts the overall impression conveyed by an advertisement, particularly where such representations relate to price. Consumers must be able to purchase advertised products or services at their advertised price, without additional or mandatory hidden fees. The Competition Bureau has long stressed the importance of transparency and truth in advertising and denounced the use of fine print in advertising to mask additional fees.

Earlier in the year, the Bureau brought charges against another telecommunications company over its claim that its clients experienced “fewer dropped calls” than users of other wireless carriers. In this case the Bureau is again seeking the maximum monetary penalty of $10 million. It appears that the Bureau is now willing to undertake steps to actively curtail deceptive advertising practices using the increased monetary penalties available under the Competition Act.