On March 11, 2015, the Competition Bureau commenced proceedings against two car rental companies, Aviscar and Budgetcar, for alleged deceptive marketing practices, including false or misleading emails, seeking remedies including a total of $30 million in administrative monetary penalties and refunds to consumers. The Bureau’s claims rely, in part, on provisions of the Competition Act that were added by Canada’s anti-spam law (commonly known as “CASL”) to prohibit false or misleading representations in commercial electronic messages.
CASL creates a comprehensive regime of offences, enforcement mechanisms and potentially severe penalties designed to prohibit unsolicited or misleading commercial electronic messages, the unauthorized commercial installation and use of computer programs on another person’s computer system and other forms of online fraud.
CASL amended the Canadian Competition Act to prohibit a false or misleading representation in any of the following elements of a commercial electronic message, each of which must be assessed independently: (a) sender information (the part of the message that purports to identify the sender); (b) subject matter information (the part of the message that purports to summarize or indicate the content of the message); (c) locator information (information, including a hyperlink/URL, in the message identifying a source of data); and (d) the body of the message.
Violation of the Competition Act prohibitions can result in serious remedies, including administrative monetary penalties of up to $1 million per violation for individuals and up to $15 million per violation for organizations.
Competition Bureau Enforcement Action
On March 11, 2015, the Bureau commenced proceedings before the Competition Tribunal against Aviscar, Budgetcar and their parent company, Avis Budget Group (collectively the “Companies”) alleging that the Companies made false or misleading representations to the public regarding vehicle rental prices. In particular, the Bureau alleges that advertised prices were not attainable due to “non-optional fees” imposed during the rental process, and that the “non-optional fees” were falsely characterized as taxes, surcharges and fees that governments and agencies require the Companies to collect from consumers. The Bureau’s allegations relate to advertising distributed through various channels, including promotional emails that contain alleged misleading subject matter information and content.
The proceeding is the Bureau’s first enforcement action under the Competition Act provisions regarding misleading commercial electronic messages that came into force as part of CASL in July 2014.
The Commissioner of Competition explained: “Consumers are entitled to clear and precise information when making their purchasing decisions and need to be confident that the information they receive regarding additional fees is truthful and accurate.”