Competition Bureau Puts Rogers on the Hook for $10 Million over Chatr Ads

by Jordan Richardson on November 22, 2010

Rogers says that it will “vigorously defend” itself against the Competition Bureau‘s findings that could put it on the hook for $10 million.

The $10 million is a penalty that the Bureau is seeking as a result of Rogers’ “misleading” advertisements over its discount brand Chatr. We’ve been covering the whole Chatr story since it developed, of course. Mobilicity filed a formal complaint in September, while WIND Mobile launched formal warnings and a lawsuit against Chatr over “anti-competitive claims.”

It looks like the hullabaloo worked, as the Bureau’s two months of investigation turned up some trouble with Chatr’s claims to have “fewer dropped calls” than its competitors. The Competition Bureau is pursuing legal proceedings against Rogers in the Ontario Superior Court of Justice, stating that the Competition Act forbids these sorts of misleading ads. The Bureau is also requesting that Rogers be forced to stop the ads immediately and pay restitution to customers impacted.

“We take misleading advertising very seriously,” Melanie Aitken, commissioner of competition, said in a release. “Consumers deserve accurate information when making purchasing decisions and need to have confidence they are not being misled by false advertising campaigns.”

The Competition Bureau apparently discovered that there was no “discernible difference” in dropped calls between Rogers’ Chatr and the other new  discount carriers.

“We are obviously very pleased they moved this quickly and this aggressively,” said WIND’s Anthony Lacavera. “Usually people expect these things to have an extended timeline…It may speak to how far offside Rogers really was on this matter.”

Rogers, predictably, is standing by its advertising. They say that they have “completed extensive testing in coverage areas across the country, and there is no question that the testing validates the advertising.” As you may or may not remember, WIND’s Lacavera spoke of a “loophole” in the industry that lets incumbents immediately drop the calls of the new carriers once customers start to roam off-network. There’s no indication that the loophole played any role in the Bureau’s decision, however.

“We commend the Competition Bureau for taking action on the complaints that Mobilicity initiated months ago and we are committed to continuing to lead the way to ensure fair competition,” Mobilicity said, adding to the dogpile.

This is a big victory of sorts for the new carriers. It also reveals that the obvious need for truth in advertising and the need for consumers to do their homework when it comes to the providers and carriers. Trusting the claims of the carriers and their “independent” and “extensive” testing is something that should only be done with the largest grain of salt one can find.

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Court Sides with Rogers over Chatr's “Fewer Dropped Calls” Claims, but Competition Bureau Unsatisfied with Ruling — TheTelecomBlog.com
August 21, 2013 at 6:25 am

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the machine November 28, 2010 at 7:45 pm

… $10 million??? for what? did rogers cause a fatal food poisoning outbreak? did rogers perpetrate a devastating oil spill? $10 million for doing nothing more than boasting about how good its product is in advertising material? that’s all? holy smokes — the crooked federal government of canada really is shot to hell …

… this malicious prosecution was brought not by unsatisifed rogers customers but by the lawless canadian government which is being used by two of rogers’ competitors to unfairly attack the company with hateful litigation. in actual fact, the CUSTOMERS of rogers are COMPLETELY SATISFIED with the product rogers is selling …

… and why has the corrupt canadian government agreed to assist two of rogers’ rivals by undertaking a malicious prosecution against the beloved canadian institution? the reason is because the bankrupt stephen harper government is so broke it will go to any extreme to find easy cash, including by laying false charges against wealthy companies like this charge against rogers communications …

… on the positive side, at least the filthy canadian government is taking rogers to court as opposed to unilaterally declaring the company guilty and then issuing an outrageous fine that can’t be opposed. there is no question in anyone’s mind that when this matter is challenged in court it will be tossed out, just like the stephen harper government should be tossed out …

Jordan Richardson November 28, 2010 at 9:17 pm

$10 million for doing nothing more than boasting about how good its product is in advertising material?

Well, no. $10 million for breaking the rules of the Competition Bureau by making false claims in advertising. This essentially translates to “anti-competitive” behaviour in that it refers to untrue claims made in advertising. But I suppose truth in advertising is irrelevant in “boasting about how good a product is.”

in actual fact, the CUSTOMERS of rogers are COMPLETELY SATISFIED with the product rogers is selling

In actual fact, the customers are Rogers are far from “COMPLETELY SATISFIED” with Rogers’ products. There’s a reason they rate, like ALL of Canada’s other carriers, poorly with the Better Business Bureau. The fact is that Canadians are consistently dissatisfied with their telecommunications options. This has been well-documented on this very website. And these companies are doing little to endear themselves to consumers, whether through pushing to end rural subsidies or through dropping usage limits or through other means.

why has the corrupt canadian government agreed to assist two of rogers’ rivals by undertaking a malicious prosecution against the beloved canadian institution?

I do hope you’re being sarcastic, but it’s a little hard to tell. Rogers is a “beloved Canadian institution?”

Furthermore, this isn’t a “prosecution” at all; it’s an investigation, done by the Competition Bureau. It is a non-partisan investigation, too, one that the Harper Government’s pro-corporate policies would doubtlessly object to in principle. The problem is that the Bureau is an independent law enforcement agency that enforces the laws of Canada with respect to advertising, competition, packaging, warnings, etc. They don’t take political sides. If they did, it’s hard to imagine the Tories backing the “malicious prosecution” of one of Canada’s big corporations.

the reason is because the bankrupt stephen harper government is so broke it will go to any extreme to find easy cash

If you consider the enforcement of the law an “extreme,” I can’t help you. The Bureau is mandated to investigate claims of anti-competitive activity. Should there be enough evidence for a case, the Bureau turns it over to the Attorney General of Canada and the case is tried. The Harper Tories have nothing to do with the architecture of this case and aren’t responsible for the laying of any “charges” external to the operation of Canada’s own legal system in terms of corporations and competitive law. And these laws, now perhaps more than ever, require spirited defence in the troubled telecommunications sector.

there is no question in anyone’s mind that when this matter is challenged in court it will be tossed out

Again, wrong. Rogers will fight the case by placing their own claims of “fewest dropped calls” against the research done by the Bureau. That is where the facts will come into play. If Rogers doesn’t have a leg to stand on, they’ll lose based on the evidence. Simple as that.

I’m not sure what compels you to draw up such a spirited, one-sided defence of one of the corporations responsible for Canada’s ridiculous telecommunications oligopoly but I’m sure Rogers appreciates it.

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