Canadian COMPETITION LAW

January 3, 2019

In a recent case handed down by the Ontario Superior Court of Justice, in Rebuck v. Ford Motor Company, the Court confirmed key requirements for commencing Competition Act misleading advertising based class actions in Ontario.  In this case, the plaintiff moved for, and obtained, certification for a class action against Ford Motor Company and its Canadian subsidiary (as well as a dealer) for allegedly misleading purchasers of 2013 and 2014 Ford vehicles in relation to fuel consumption marketing claims.

In particular, the plaintiff claimed that the defendants advertised intentionally understated fuel consumption ratings and that they also failed to disclose material facts relating to the fuel consumption ratings – specifically, that they were based on an older testing method that was being phased out and that did not accurate reflect real world driving conditions. The plaintiff also claimed that the defendants’ fuel consumption marketing created the false general impression that their stated ratings were government-certified and met regulatory requirements.

In approving the plaintiff’s certification motion, the Court discussed the key elements for bringing private actions under sections 52 and 36 of the Competition Act. (Section 52 is the criminal misleading advertising provision; and section 36 is the private action provision, under which Competition Act law private and class actions are commenced). In doing so, the Court summarized the requirements to prove both an intentional false or misleading claim under section 52 of the Competition Act and actual damages suffered as a result of a breach, which is a key requirement of section 36.

In addition, however, the Court also confirmed the lower causation requirement for commencing civil actions based on section 52. In this respect, the Court held, relying on earlier case law, that to satisfy the “double-barreled” requirement to establish both a breach of section 52 and damages, private plaintiffs must also show a causal connection between the breach (i.e., false or misleading claim) and the damages suffered.

The Court clarified that, unlike, for example, the reliance in the usual sense of a common law misrepresentation claim, all that is required for a civil misleading advertising claim under the Competition Act is for the plaintiff to show that a false or misleading claim caused them to acquire less value that they expected to acquire. This lower causation burden allows, for example, damages to be calculated on an aggregate rather than an individualized basis.

Overall, this case is a good general summary of the requirements to obtain certification for Competition Act class actions in Ontario. It is also a reminder that in addition to other provisions of the Competition Act – most commonly, the price-fixing and other conspiracy offences under section 45 – false or misleading advertising claims can also form the basis for civil and class actions.

********************

SERVICES AND CONTACT

We are a Toronto based competition and advertising law firm offering business and individual clients efficient and strategic advice in relation to competition/antitrust, advertising, Internet and new media law and contest law. We also offer competition and regulatory law compliance, education and policy services to companies, trade and professional associations and government agencies.

Our experience includes advising clients in Toronto, across Canada and the United States on the application of Canadian competition and regulatory laws and we have worked on hundreds of domestic and cross-border competition, advertising and marketing, promotional contest (sweepstakes), conspiracy (cartel), abuse of dominance, compliance, refusal to deal and pricing and distribution matters. For more information about our competition and advertising law services see: competition law services.

To contact us about a potential legal matter, see: contact

For more information about our firm, visit our website: Competitionlawyer.ca

Comments are closed.