OTTAWA – After a two month investigation, the Competition Bureau announced today it has begun legal proceedings against Rogers Communications to stop what the Bureau says is misleading advertising of Rogers’ Chatr discount wireless brand.
The company’s national campaign for new discount brand Chatr promises "fewer dropped calls than new wireless carriers" and have "no worries about dropped calls”. The new wireless carriers didn’t care for the new Rogers brand, or the campaign – and they have launched various legal proceedings on their own. Wind Mobile actually filed the complaint that led to this investigation and outcome.
The Bureau’s investigation, which it said involved an extensive review of technical data obtained from a number of sources, showed there is no discernible difference in dropped call rates between Rogers/Chatr and new entrants.
"We take misleading advertising very seriously," said Melanie Aitken, Commissioner of Competition, in the press release. "Consumers deserve accurate information when making purchasing decisions and need to have confidence they are not being misled by false advertising campaigns."
The 2008 spectrum auction and the launch of new competition it spawned “was intended to enhance competition in the wireless sector," added Aitken. "New entrants attempting to gain a foothold in the market should not be discredited by misleading claims made by their competitors."
In a statement to the press, Rogers says it will fight this. "We’re surprised by the actions of the Competition Bureau," said Ken Engelhart, Rogers’ senior vice president of regulatory. "We have extensive, independent third party testing to validate our claims and we stand by our advertising. We will vigorously defend this action in court.
"We’ve completed extensive testing in coverage areas across the country and there’s no question that the testing validates the advertising in market," said Todd Stone, president and CEO, Score Technologies, in the Rogers release. Score specializes in network testing for leading wireless carriers across North America.
The legal proceedings are being brought before the Ontario Superior Court of Justice under the misleading advertising provisions of the Competition Act. The Bureau is asking the court to order Rogers to:
• immediately stop the advertising campaign and refrain from engaging in similar campaigns;
• pay an administrative monetary penalty of $10 million dollars;
• pay restitution to affected customers; and
• issue a corrective notice to inform the general public about the nature and provisions of the order issued against them.
“(W)e are very pleased that the Competition Bureau has come to this conclusion and we applaud its decision to stand up for Canadian consumers and their right to accurate information," said Anthony Lacavera, Chairman of Wind Mobile, in his press release.
Added Dave Dobbin of Mobilicity: “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… Today alone, Rogers was hit with a massive lawsuit by the Competition Bureau and they even called the police on Mobilicity’s Magenta Militia singing dance troupe.”
(Ed note: The troupe, pictured here in a handout photo from Mobilicity, was dancing right outside Rogers’ Toronto headquarters.)
The Competition Bureau, as an independent law enforcement agency, ensures that Canadian businesses and consumers prosper in a competitive and innovative marketplace.
Click here for the full Bureau release.
– Greg O’Brien
