Who's Afraid of a Big Bad AMP?
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Who's Afraid of a Big Bad AMP?
Who's Afraid of a Big Bad AMP?
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Big companies are most likely to get caught for misleading consumers. Little companies? Not so much By Ava Chisling — a media lawyer and longtime editor based in Montreal
Canada's Competition Bureau makes its stance on advertising very clear: if you mislead the public, the Bureau will find you and they w fine you. To make sure the public receives this message, in the past eight months, the Bureau has handed out two 10-million dollar administrative monetary penalties (AMPs) – the maximum amount allowed by law to first-time corporate offenders. The AMPs went to of Canada’s biggest players: Bell and Rogers (although Rogers is contesting the allegation) for various infractions of the Competition A Even if your business has little to do with compliance in advertising, the severity of these penalties is likely to get your attention – and is the whole point.
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In her October 2011 speech at the CBA Annual Competition Law Conference, the Commissioner of Competition Melanie L. Aitken said, "I believe that through both our words and our actions to date, our message is being heard… We will hold to account companies that take advantage of Canadians." The question is, should all businesses pay careful attention to the Bureau's "comply or we will find you" message or does the warning only apply to the largest players? It is probably the latter because the only people who will likely be deterred by million dollar AMPs are those with millions of dollars – and those most likely to get caught. "It’s the classic criminal law deterrent," says John McKeown, a partner at Cassels Brock in Toronto and the author of Fox, Canadian Law of Copyright and Industrial Designs and Brand Management in Canadian Law. "They make an example of the big player. A slap on the wrist doesn't mean anything. It has to be significant." And a 10-million dollar fine fits the bill perfectly. McKeown says that the public is interested in high profile cases because of the size of the businesses the Bureau is catching. "The fact that both Bell and Rogers are in a market that is expanding – cellphone services – means that complaints about their advertising are likely coming from their competitors. And because they are big players, they are also more likely to get caught."
Asked to comment, Bell lawyer Fabien Fourmanoit provided the following statement:
"Unfortunately, I am unable to comment on the applicable law and the Bureau's approach specifically. However, I can tell you that Bell is one of the largest advertisers in Canada and in order to advertise our products and services, we have in place a multi-layered approval process. Bell goes through various rounds of approvals, including technical experts, marketing, communications, branding, and legal. What we have done, and continue to do, is ensure that everyone, from the technical folks to the marketing to communication departments, understands they are part of that greater compliance objective. That means giving all parties involved the right tools so they understand the law, and how it applies to the work they do."
McKeown's colleague at Cassels Brock, Chris Hersh, agrees. Hersh is a partner in the Competition, Antitrust and Foreign Investment Group. He has extensive experience in advising on and litigating in competition law. He says the Competition Bureau's focus on the hi AMP, high-profile misleading advertising cases leads to a two-tier system of enforcement. "Yes, competition law applies to everyone equally, but practically speaking, there are effectively two sets of rules – and this is the problem with the whole notion of enforcement. you are a big retailer like The Bay or a big company like Bell or Nivea, you have to abide by the rules. But if you own a little shop down street, you can do what you want because nobody cares. No one is going to bring a case against you as long as you are not engaging fraud."
The Bureau has neither the time, personnel or budget to catch and prosecute the vast majority of violators in this country. And in any c there would be little value in bringing every company with misleading claims of "Big Markdowns!" to court. "An ad is deemed 'misleadin it is misleading in a material way, which means it was relevant to a consumer's decision to go ahead with the purchase," says Hersh. "What is the societal value in bringing costly cases – and they are costly – to court or penalizing people for behavior that may or may n be misleading, where people may or may not be harmed?"
And therein lies the problem. "If you're a big business, you have to invest money and time in compliance," says Hersh. "But if you’re a business, you probably don’t even know that these kinds of cases exist so you don’t think about it. In some ways, this puts the big companies at a disadvantage because they have to market a certain way while their small competitors get to market a different way because they are just too small for the Bureau to bother with."