Beware When You Advertise

A decision rendered by the Ontario Supreme Court on September 26, 2016 in a dispute between Bell Canada (Bell) and Cogeco Cable Canada (Cogeco) could have potential ramifications for your business and the way that you advertise. Bell and Cogeco directly compete for Internet customers in many Ontario communities. Cogeco commenced an advertising campaign in August 2016 using the slogan “the best Internet experience in your neighbourhood”.  Apparently, this slogan had the desired effect with customers gravitating to Cogeco (advertising works).  However, Bell offered packages with internet download speeds of up to 940 megabytes per second (Mbps), whereas the highest download speed offered by Cogeco was 250 Mbps.  Bell commenced legal proceedings under section 52(1) of the Competition Act, which reads:
52 (1) No person shall, for the purpose of promoting, directly or indirectly, the supply or use of a product or for the purpose of promoting, directly or indirectly, any business interest, by any means whatever, knowingly or recklessly make a representation to the public that is false or misleading in a material respect.
Historically, Courts have been slow to intervene in disputes over advertising in part because it is understood that advertising often involves a certain amount of exaggeration, referred to as “puffery”.  Bell argued that the claim of “best Internet experience” required substantiation.  Cogeco argued that there were a number of factors, other than just speed, that go into how a customer experiences their service and the reference to “best” should be considered to be mere “puffery”.   After considering the facts, the Court granted Bell an injunction, which forced Cogeco to discontinue its advertising campaign.  The Court did so on the basis that the public is not sophisticated in these matters.  Cogeco had altered the marketplace by claiming to be the “best”.  The representation made by Cogeco to the public was false and misleading.  There is no question that the strong public response to the advertising campaign was a factor in the Court’s decision to grant the injunction.  If you are launching an advertising campaign, you must be cognizant of the types of representations you are making in your advertising.  If your competitor launches an effective advertising campaign with representations that you consider to be false or misleading in a material respect, you may have recourse.