Competition Watchdog Says Rogers Guilty Of Floating Misleading Ads

by Gaurav Kheterpal on August 9, 2012

Barely a month after Rogers got a clean chit from CRTC over the notorious ‘Accidental Throttling‘ controversy, the company is in trouble again – this time against the Competition Bureau.

Two years back, Rogers launched Chatr as a discounted wireless service where subscribers would have “fewer dropped calls than new wireless carriers” and “no worries about dropped calls.” The trouble began for Rogers when Wind Mobile filed a formal complaint with Canada’s Competition Bureau alleging that the assertions were false and misleading.

The bureau subsequently did “an extensive review of technical data” and found Rogers’ claims to be misleading. Rogers, though, is defending itself citing ‘freedom of speech‘.

The Competition Bureau has alleged that Rogers did not conduct adequate tests to support its claim on Chatr’s superior service. Tom Curry, a lawyer representing the Competition Bureau argues that the claims are misleading as Rogers claims are based on a small set of sample data and it does not cover several new wireless carriers or all of the cities where the service was offered before making the claim.

Therefore, the Bureau subsequently asked the Ontario Superior Court of Justice to order Rogers to pay a $10 million penalty, pay restitution to affected customers, stop the Chatr advertisements, and issue a public apology.

On the other hand, Rogers claims an independent third-party has conducted testing that validated Chatr had fewer dropped calls in each market where Public Mobile, Wind Mobile, Mobilicity and Videotron operated. The carrier says it acted “fairly and responsibly” and it stands by the advertisements as they were true and accurate. It is expected that Rogers might question Canada’s Competition Act and seek the removal of the clause that requires “adequate and proper” tests of a product’s performance before making advertising claims about it.

In hindsight, Rogers is no stranger to branding controversies.  The company had trouble over its “Beyond 4G” advertising slogan when the Ottawa-based Public Interest Advocacy Group said that the claim is misleading. Back then, our very own Jordan Richardson emphatically summed up the ‘Beyond 4G’ debate stating

“So “Beyond 4G” doesn’t really mean anything with respect to going above and beyond actual 4G standards after all, which gives Rogers an awful lot of leeway. It is a case of marketing more than anything else, I’d venture, and that’s hardly new. Much like saying something is “beyond a phone” when it’s really still truly just a phone, “Beyond 4G” is a “figure of speech” used to confuse consumers into signing up with Rogers’ slightly superior networks. All’s fair in love and 4G – or so they say.”

Perhaps, Rogers should adopt a more watchful approach in its future marketing campaigns. But for now, the company is sticking to its stand. If Rogers comes out on top out of this mess, It would be interesting to see how the whole debate around ‘misleading advertising’ would impact marketing campaigns in Canada.

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Written by: Gaurav Kheterpal. Follow TheTelecomBlog.comby:RSS,TwitterFacebook, or YouTube.

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