June 11, 2015
The Canadian Competition Bureau has been increasing its advocacy, outreach and compliance efforts since the (relatively) new Commissioner of Competition (John Pecman) took office.
As part of this effort, it appears to be focusing on introducing more new media (and also an increasing range) of communication publications and compliance tools, including business-focused pamphlets, compliance videos, multi-media tools and, most recently, a new advertising law focused publication: the Deceptive Marketing Practices Digest (Marketing Digest).
In reading the Bureau’s new Marketing Digest, several key things struck me that are notable for companies, brands and agencies:
1. A continued increasing focus on the digital economy: Like other major enforcement agencies (notably the U.S. FTC), the Bureau is increasingly focusing on the digital economy.
2. Past and current Bureau enforcement priorities: The Bureau’s Marketing Digest reiterates past and current enforcement priorities for the Bureau – for example, disclaimers, misleading “general impression” issues, failing to disclose the complete price of a product and “drip pricing” (undisclosed additional costs, which is currently at issue with the Bureau’s investigation of several Canadian car rental companies). These issues offer a useful checklist for advertisers, their counsel and agencies to mitigate potential risk.
3. New technologies and enforcement priorities in other jurisdictions: The Bureau’s new publication signals an increasing focus on issues that have emerged as priorities in other major jurisdictions. These include native advertising (e.g., promotional material designed to look like unbiased news articles or headlines) and fake testimonials (i.e., “astroturfing”).
4. Advertising and privacy law: Discussing areas where advertising and privacy law intersect (e.g., behavioural advertising and geolocation).
5. Increasing international cooperation: The Bureau increasingly cooperates with its enforcement and competition policy partners in other jurisdictions (e.g., OECD, International Consumer Protection and Enforcement Network (ICPEN), U.S. FTC, etc.) and pursues key global trends in its own policies and enforcement. As such, it is useful for advertisers, their counsel and agencies to also follow major trends in other major jurisdictions for best practices and risk mitigation.
KEY ADVERTISING LAW COMPLIANCE GUIDELINES
Several more specific compliance guidelines that the Bureau’s new Marketing Digest sets out include:
1. Disclaimers can generally add or clarify information in main or “headline” claims, but should not contradict headline claims.
2. Disclaimers should be plainly worded, clear and free of technical jargon.
3. Advertisers need to consider both the literal meaning and the “general impression” of claims. The Competition Act contains specific civil and criminal sections that provide that the general impression of advertising is to be considered in determining whether an advertisement is materially false or misleading. When I counsel clients on this point, I commonly advise that they need to make sure that the literal meaning of all claims is true, but that they also take a few minutes to review the first/general impression of draft creative to make sure all of the important/material points are clear and that no important information is misleading or omitted. In other words, “step into the shoes of a busy consumer”.
4. Ensure that the material details of a promotion are clear, regardless of the medium (and take care that claims made in traditional media – e.g., print advertising – is reviewed for accuracy and clarity if digital media is also used).
5. Only use/post authentic testimonials.
6. For testimonials, ensure that any material connection between the person providing the testimonial and the brand (e.g., financial or otherwise) is disclosed (e.g., if paid, an employee, etc.). The Bureau indicates that consumers value authentic third party testimonials, so if there is some material connection to the advertiser it should be communicated.
7. Consider whether the general impression of testimonials (e.g., that they represent authentic experiences) is misleading.
In addition to the Bureau’s new Marketing Digest, another important recent Canadian advertising law related development is its recently released new competition law compliance materials. These include guidance on complying with the advertising provisions of the Competition Act and an advertising law compliance related due diligence checklist – see: Corporate Compliance Programs – Appendix C: Due Diligence Checklist.
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