The Competition Act has civil and criminal provisions that target false or misleading representations and deceptive marketing practices in the electronic marketplace.
These provisions make it illegal to promote a product or business interest by sending or causing to be sent false or misleading representations in sender information, subject matter information and electronic messages, as well as making false or misleading representations in a locator (URLs).
In force since July 1, 2014, these provisions came about following the enactment of Canada’s Anti-Spam Legislation (CASL). This legislation aims to protect consumers and businesses from the misuse of digital technology, including spam and other electronic threats. CASL is enforced by the Competition Bureau, the Canadian Radio-television and Telecommunications Commission, and the Office of the Privacy Commissioner of Canada.
Because CASL uses technology-neutral language, all means of telecommunications are captured under the new law: promotional emails, short message services (SMS or text messaging), social media, websites (including direct messages sent via those platforms’ messaging services), applications, blogs, and Voice over Internet Protocol (VoIP). This enables the Bureau to address false or misleading representations and deceptive marketing practices as technologies evolve. In the case of telemarketing, CASL also updated the Competition Act’s existing provision to include “communicating orally by any means of telecommunication.”
When deciding whether marketing information is false or misleading under the Competition Act, the court considers both the literal meaning of the information and the general impression it makes. This is known as the “general impression test.”
Penalties and remedies for non-compliance
The overall intent of CASL is to deter the most damaging and deceptive forms of spam and other electronic threats that affect Canadian consumers and businesses.
In the Competition Bureau’s case, the consequences associated with being found to have engaged in deceptive marketing practices depend on whether the conduct falls under the civil or criminal provisions of the Competition Act.
Civil provision: Making a false or misleading representation (section 74.011 of the Competition Act)
The court may order (among other things) the person: to stop engaging in such conduct, to publish a corrective notice and/or to pay an administrative monetary penalty. For individuals, the penalty can be up to $750,000 for a first-time violation and up to $1 million for subsequent incidents. For corporations, the penalty can be up to $10 million for a first-time violation and up to $15 million subsequently.
Criminal provision: Knowingly or recklessly making a false or misleading representation (section 52.01 of the Competition Act)
Summary conviction: Fine of up to $200,000 and/or imprisonment for up to one year.
Conviction on indictment: Fines are at the discretion of the court and imprisonment can be for up to 14 years.
Having a credible and effective compliance program can provide benefits in dealing with the Competition Bureau to resolve a violation of one of the legislation it enforces. A compliance program can also help:
- reduce the risk of potentially illegal conduct
- protect your brand and reputation
- detect instances of potentially illegal conduct at an early stage
- identify when others might put you at risk
To find out more information on written opinions under section 124.1 of the Competition Act, contact the Bureau’s Information Centre toll-free at 1-800-348-5358 or online. If a written opinion is provided by the Commissioner, a fee will apply based upon the section of the Act the proposed conduct or practice applies to. A written opinion is binding on the Commissioner as long as the facts submitted are accurate, and it remains binding if the facts on which the opinion is based remain substantially unchanged and your conduct or practice is carried out, as proposed. All fees and service standards for written opinions are set out in the Competition Bureau Fee and Service Standards Policy.
- Written opinions
- Competition Act, section 52.01
- Competition Act, section 74.011
- Frequently asked questions about Canada’s Anti-Spam Legislation
- Canada’s anti-spam legislation (Innovation, Science and Economic Development Canada)
- Federal enforcement agencies remind the app industry of their obligations associated with Canada’s anti-spam legislation (Office of the Privacy Commissioner of Canada)
- Video streaming services encouraged to review their terms and conditions