As discussed in our previous blog post, on November 17, 2022, the Honourable François-Philippe Champagne, Minister of Innovation, Science and Industry, launched the much anticipated public consultation on the second stage of potential amendments to the Competition Act (the “Act”).
As part of this consultation process, the Department of Innovation, Science and Economic Development (“ISED”) issued a discussion paper, titled The Future of Competition Policy in Canada (the “Discussion Paper”), which considers numerous issues and potential areas of reform, including in the mergers, unilateral conduct, competitor collaboration, deceptive marketing and administration/enforcement context. The Discussion Paper does not include any particular recommendations or proposed amendments to the Act. Rather, it simply sets the stage and invites feedback from interested stakeholders on the issues and potential areas of reform, which can be provided on or before February 27, 2023.
To help businesses better understand the issues and potential areas of reform included in the Discussion Paper, we’re releasing a series of blog posts discussing these issues and potential areas of reform on a topic-by-topic basis. This is the fourth blog post in the series, which is focused on deceptive marketing in Canada.
Deceptive Marketing
According to the Discussion Paper, new technologies and digital platforms give “rise to the potential for novel deceptive marketing practices”, which in turn raises the question of whether the Act requires amendments in order to better protect consumers in the face of these novel practices. For instance, the Discussion Paper specifically refers to “an added incentive to ensure that … price appears to be the lowest by any means possible in this dynamic environment” which may result in misleading marketing conduct. An example is advertising prices that are unattainable as they do not include additional compulsory fees – referred to as “drip pricing”. Other types of potentially deceptive conduct identified in the Discussion Paper are: the blurring of what is advertising through native advertising, influencer marketing and online reviews; hiding the true cost of a product or service through, for example, fine print disclosures; and, inadequate disclosure of terms and conditions, including subscription traps, misleading free trial offers, and deceptive consumer data collection. In light of these and other concerns, the Federal Government is considering possible reforms and would welcome input on the deceptive marketing-related topic listed below, as well as input on reforms to the deceptive marketing provisions more generally.
- Adopting additional enforcement tools suited for modern forms of commerce, given the nature and ubiquity of digital advertising. For example, further amendments to better define false or misleading conduct, such as the 2022 drip pricing amendments, could be considered. By way of background, as part of Bill C-19, the Budget Implementation Act, 2022, No. 1, the Act was amended to define drip pricing and explicitly recognize that, for the purpose of both the civil and criminal false and misleading advertising provisions in the Act, drip pricing constitutes a false or misleading representation. The Discussion Paper seeks comments on whether the Act may benefit from further clarifications such as this and/or additional enforcement tools to address new or modified forms of deceptive marketing on digital platforms.
Timing of Submissions
As noted above, interested stakeholders have been invited to provide submissions by February 27, 2023. This can be done using the online consultation form on ISED’s website.
If you have questions about the ideas and proposed areas of reform included in the Discussion Paper, or if you would like assistance in preparing a submission in response to the Discussion Paper, you can reach out to any member of Fasken’s Competition, Marketing & Foreign Investment group. Our group has significant experience advising clients on all aspects of Canadian competition law.
The information and guidance provided in this blog post does not constitute legal advice and should not be relied on as such. If legal advice is required, please contact a member Fasken’s Competition, Marketing & Foreign Investment group.