Law Times

Page 10 September 21, 2015 • Law timeS www.lawtimesnews.com FOCUS price for a substantial period of time before or immediately after making the representation. In this case, the bureau al- leged Michaels didn't ensure it had offered certain products for sale in good faith before pro- moting them at discounts. The seminal case in the area is the 2005 decision of the Competi- tion Tribunal in Commissioner of Competition v. Sears Canada Inc. It established the guiding princi- ples for determining an ordinary or regular price. The tribunal imposed an administrative mon- etary penalty of $100,000. Michaels paid 35 times as much, albeit in an era where the maximum penalty for a first- time offence has increased to $10 million. "The magnitude of the [penalty] imposed here makes it evident that the bureau is quite serious about ordinary price representation enforce- ment," says Banicevic. James Musgrove of McMillan LLP in Toronto says the $3.5-million penalty was high. "The Competition Bureau is not shy about AMPs," he says. "But an AMP of this magnitude causes me to continue to be- lieve that sooner or later a court will say that certain AMPs are penalties and unconstitutional [as criminal law] despite the recent Supreme Court of Canada hold- ing [in Guindon v. Canada] to the contrary." Before the Michaels case, enforcement around ordinary price representations had been below the radar for some time. Still, its emergence doesn't sur- prise Banicevic. "Sears provided companies with a clear understanding of how ordinary price claims should work," she says. "Then the marketplace corrected itself, we had a quiet period, and now we're starting to see more en- forcement activity again." According to Musgrove, the bureau began ramping up ad- vertising enforcement about two or three years ago, but the size of the penalty in the Michaels case has brought the issue to the fore. "Things tend to go in waves, and I think somebody's got to get a good whack before people start paying attention anew," he says. Enforcement has ramped up in other advertising-related ar- eas as well. Since Bell Canada agreed in 2011 to pay a $10-million ad- ministrative monetary penalty, the maximum allowed under the legislation, for misleading representations about its prices by failing to disclose additional mandatory fees, the bureau has been consistent in its focus on those types of cases. "Virtually every sector has been struggling with how to disclose additional fees in a way that complies with the legisla- tion," says Banicevic. The tribulations of one of Canada's largest car rental com- panies, Avis Budget Group. Inc., are a case in point. In March 2015, the bureau filed an application with the Competition Tribunal alleging that the advertised prices of the group's subsidiaries, Avis and Budget, were "not attainable due to additional fees imposed during the rental process." The bureau also alleged the com- panies improperly character- ized the additional fees as taxes, surcharges, and amounts that governments and agencies re- quired them to collect from consumers. The additional fees, the bureau stated, had increased rental costs by up to 35 per cent and amounted to more than $35 million since 2009. Consequently, the regulator is seeking $30 million in ad- ministrative monetary penalties and refunds for consumers from the three corporate entities in- volved. Of particular interest in these cases is the bureau's reliance on recent amendments designed to address false or misleading commercial representations on- line. "Many of the alleged misrep- resentations were made online and that has allowed the bureau to focus on the subject line in the communications," says Ban- icevic. "What's interesting about that is that the amendments don't require materiality in the misrepresentations that were al- legedly made online." In response, Avis and Bud- get take the position that they disclosed the additional fees at some point in the rental process. "The hot point is whether that is enough or does disclo- sure of the additional fees have to be incorporated in every rep- resentation?" says Banicevic. "My view is that it is suffi- cient if disclosure is made at any time before payment." Also ongoing are contested actions initiated by the bureau in 2013 against Leon's Furniture Ltd. and the Brick Ltd. regard- ing the companies' promotions that allow customers to buy now and pay later. In proceed- ings brought before the Ontario Superior Court of Justice, the bureau alleged they improperly required many customers to pay upfront administration or pro- cessing fees. "Canadian consumers must receive clear and accurate infor- mation about what must be paid at the time of purchase, and what the actual cost of a particular item is if they use a deferred payment option," said John Pecman, com- missioner of competition, in a 2013 press release. "Retailers cannot hide details of additional fees in lengthy dis- claimers." Despite all of the activity re- cently, it's not clear that Pecman's regime is any tougher on the ad- vertising front than that of his predecessor, Melanie Aitken. "Generally speaking, the previ- ous regime adopted an aggressive enforcement stance and Pecman has continued it," says Musgrove. "This having been said, there is definitely more outreach and co-operation from the current regime." LT An essential reference for professionals who work with children, Children's Law Handbook, Third Edition provides quick access to expert guidance on the most relevant, important and up-to-date legal points, issues and consequences you need to know to make confident, sound decisions. New in this edition • Review of child protection legislation across Canada dealing with the issue of domestic violence • Updated and revised discussion of children giving evidence in court: Children's Aid Society of Toronto v. C. (J.) (2013, Ont.C.J.); Children's Aid Society of Haldimand and Norfolk v. P. (K.) (2013, Ont.S.C.) • New section reviewing mechanisms for enforcing custody / access orders and alternative dispute resolution regarding custody and access • Charter rights and medical treatment orders in child protection proceedings: Manitoba (Director of Child & Family Services) v. C. (A.) (2009, S.C.C.); Children's Aid Society of Toronto v. P. (L.) (2010, Ont.C.J.); Alberta (Director, Child, Youth and Family Enhancement Act) v. L. (D.) (2012, Alta.Q.B.) • Review of 2012 amendments to the Youth Criminal Justice Act following the enactment of the Safe Streets and Communities Act (S.C. 2012, c. 1): R. v. A.A.Z. (2013, Man.C.A.); R. v. S.N.J.S. (2013, B.C.C.A.); R. v. Z.R.K. (2013, Man.C.A.) • Expanded section on cyber-bullying and discussion of recent case law: A.B. v. Bragg Communications Inc. (2012, S.C.C.) New Edition Children's Law Handbook, Third Edition Mr. Justice Marvin A. Zuker and Lynn M. Kirwin Available risk-free for 30 days Order online: www.carswell.com Call Toll-Free: 1-800-387-5164 In Toronto: 416-609-3800 Order # 986674-65203 $125 Softcover approx. 860 pages July 2015 978-0-7798-6674-8 Carswell 00229XV-A50427 Shipping and handling are extra. Price(s) subject to change without notice and subject to applicable taxes. Untitled-3 1 2015-09-17 2:05 PM Enforcement of advertising rules ramped up Continued from page 9 'Virtually every sector has been struggling with how to disclose additional fees in a way that complies with the legislation,' says Anita Banicevic.

• Cover