The U.S. Federal Trade Commission will be holding a very interesting upcoming workshop on advertising and privacy disclosure in online and mobile media on May 30, 2012 entitled In Short: Advertising & Privacy Disclosures in a Digital World.

The workshop, which will also be webcast, will include the following topics: Mobile Privacy Disclosures, Mobile Advertising Disclosures, Social Media Disclosures and Cross-Platform Advertising Disclosures.

Speakers are to include speakers from the Federal Trade Commission, Berkeley School of Information, NetChoice, National Consumers League, Clorox, Facebook, Word of Mouth Marketing Association, Procter & Gamble, the Interactive Advertising Bureau (IAB), Best Buy and others.

For more information see: In Short: Advertising & Privacy Disclosures in a Digital World

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The Canadian Institute is hosting an upcoming contest conference entitled “Managing Legal Risks in Running Online Contests” on June 21-22 2012 in Toronto.  Their conference will include discussions on topics that include minimizing the risks of operating online contests, online voting contests, operating Facebook and Twitter contests, mobile contests and mitigating risk when online contests go wrong.

For more information about this conference and our promotional contest resources see:

Managing Legal Risks in Running Online Contests

Contests

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The following are a few advertising and regulatory law developments that caught my eye today:

CRTC publishes final regulations to regulate loud television commercials:

CRTC moves a step closer to making loud TV ads a thing of the past

Slaw.ca posted an interesting note by David Canton on the use of social media and Facebook for operating online contests:

Commercial Users of Social Media Need to Check Terms of Use

U.S. FTC publishes tips to protect information and computers from online scammers:

Secure Your Computer

The Minister of Public Safety addressed trade, security and competition in remarks at the Can/Am Border Trade Alliance Conference:

Speaking Notes for the Honourable Vic Toews Minister of Public Safety at the Can/Am Border Trade Alliance Conference

The Globe published an interesting article on fraudulent advertising and phishing in relation to bank log-in websites:

Phishing, other malicious websites soar in Canada

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The National Competition Law Section of the Canadian Bar Association will be hosting a Marketing Practices Committee Roundtable with Competition Bureau officials in Toronto this Thursday.

Bureau representatives are to include Lisa Campbell (Deputy Commissioner of Fair Business Practices) and Brendan Ross (Major Case Director and Strategic Policy Advisor).

For more information see:

CBA – National Competition Law Section

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On April 29, 2012, the Federal Government announced proposed amendments to the Telecommunications Act that, if passed, would allow the CRTC to recover the cost of Do Not Call List investigations and enforcement efforts directly from the telemarketing industry in the form of fees.

In making the announcement, the Government said:

“Today, the Honourable Christian Paradis, Minister of Industry and Minister of State (Agriculture), announced additional action to protect consumers through sustainable funding for the National Do Not Call List.

‘The National Do Not Call List is a successful program that many Canadians rely on to protect them from unwanted telemarketing calls,’ said Minister Paradis. ‘Today’s announcement reinforces our government’s commitment to protecting consumers.’”

This new proposed initiative to assist with the financing of Do Not Call List investigations and enforcement would be implemented through amendments to the Telecommunications Act, introduced as part of provisions in the federal Jobs, Growth and Long-term Prosperity Act, introduced late last week in the House of Commons (see: Bill C-38).

Other proposed changes as part of Bill C-38 include increasing the transparency of Canada’s Investment Canada Act review process (see: Federal Government announces Investment Canada Act changes to add transparency to Canadian foreign investment review process).

The Government also announced upcoming consultations on the proposed new fee structure for Do Not Call List investigations and enforcement, which, if passed, would come into effect in the Spring of 2013.

Canadian enforcement authorities, including the Competition Bureau and the CRTC, have recently been distinctly more aggressive in seeking penalties in a variety of advertising and marketing law cases – for example the recent sweeping enforcement steps taken by the CRTC against 85 companies for violating Canada’s telemarketing rules: 85 companies face CRTC telemarketing enforcement action.

For the Federal Government’s news release see:

Harper Government Takes Action to Protect Consumers

For more about the regulation of telemarketing in Canada see:

Do Not Call List

Telemarketing

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On April 26, 2012, the U.S. Federal Trade Commission (FTC) announced that it negotiated a settlement of about $15.5 million with operators of an allegedly deceptive prize promotion scheme.  In making the announcement, the FTC said:

“The Federal Trade Commission put a stop to an operation that allegedly conned hundreds of thousands of consumers into paying $20 apiece by posing as government agencies and luring them with fake sweepstakes prizes. Under settlements reached as part of the FTC’s ongoing crackdown on schemes that prey on financially strapped consumers, the defendants are banned from the prize promotion business.

According to the FTC’s amended complaint, operators of the scheme sent consumers personalized mailers, some with fictitious government agency names and official-looking seals, with misleading statements such as, “Your identification as recipient for reported cash award entitlements totaling over $2,500,000.00 has been confirmed!” What the mailers did not tell consumers is that they had not actually won any prize. The defendants operated through a network of companies, used multiple business names, and sent dozens of versions of their mailers, according to the FTC’s complaint.”

As in the U.S., contests in Canada are fairly highly regulated.  Contests must comply with the federal Competition Act (which sets out certain mandatory disclosure requirements), the Criminal Code (which contains illegal lottery offences), privacy legislation and the common law of contract (see: promotional contest law in Canada).

In addition, the “general misleading advertising” and deceptive prize notice provisions of the Competition Act also apply to contests.

The general misleading advertising provisions prohibit materially false or misleading representations to the public for the purpose of promoting products (or business interests more generally).  The potential penalties can be severe and include civil fines of up to $750,000 (for individuals) and $10 million (for corporations) and court orders to cease the conduct, publish corrective notices or compensate consumers (restitution).

The deceptive prize notice provisions of the Competition Act prohibit prize notices sent by electronic or regular mail that give the general impression that a recipient has won (or will win) a prize and requires a payment (or incurring another cost) unless the recipient actually wins a prize and certain required disclosure is made (including the number and approximate value of prizes, regional allocation of prizes and odds of winning).

Based on these various requirements, it is important for contest organizers to review their rules and advertising materials for compliance with the Competition Act and Criminal Code and take steps to draft enforceable rules that anticipate potential issues and contingencies.

In some cases, it is also prudent to consider intellectual property or other issues – for example, where third party logos or trade-marks are to be used for prize illustrations (which may require consent) or entrants’ materials are to be used or reproduced (e.g., in skill contests).

For the FTC’s news release see:

FTC Settlement Bans Swindlers from Prize Promotion Business

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The Federal Government appears to be enhancing its online anti-spam legislation resources in advance of Canada’s new Anti-spam Act coming into force.  One of the latest examples of this is its new spam and fraud related glossary available at: Glossary.  The Government’s new glossary includes definitions of many spam, fraud and Internet crime related terms.

For more about Canada’s new anti-spam legislation see: Anti-spam Act.

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Manitoba’s Consumer Protection Office has announced that new consumer protection laws for fair and clear cell phone contracts will come into effect later this year (on September 15, 2012).

According to the Consumer Protection Office, the new rules “focus on ensuring that contracts are clear and provide all important information for consumers” and to ensure that “cell phone contracts are fair to both consumers and businesses”.

The new legislation will: (i) require companies to provide a copy of the contract to consumers before the contract begins, (ii) require companies to fully disclose and explain all charges fees and terms, (iii) restrict companies from making unilateral changes to contract terms, (iv) allow consumers to cancel contracts at any time, for a reasonable cancellation fee, (v) require the minimum monthly cost to be included in advertisements, and (vi) restrict automatic contract renewals.

Manitoba’s decision to introduce stricter regulation of cell phone contracts and disclosure follows similar recent enforcement actions, including by the Competition Bureau (see: here), CRTC (see: here, here, here and here) and Canadian Transportation Agency (see: here), as well as a number of recent cases where significant or novel penalties were imposed, including a recent landmark Supreme Court of Canada misleading contest case in which punitive damages were awarded (see: here, here and here).

These cases and initiatives also appear to signal an increase in the regulation of advertising in Canada in general and heightened scrutiny of price advertising and disclosure in particular (see e.g.: Is the Price Right? Increased Regulatory Scrutiny and Class Actions for Representations Involving Price).

For the news release and related documents see:

New cell phone contract laws

For more about Canada’s federal misleading advertising laws see:

Misleading Advertising

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In anticipation of Canada’s new Anti-spam Act coming into force, the federal Government has launched another tool for Canadian consumers and businesses – a “Fight Spam Quiz”.

The quiz (or rather quizzes – one for consumers and another for businesses and organizations) include questions about scareware, phishing, Wi-Fi and security, spambots, malware, spam, viruses, corporate Internet and e-mail usage policies, VPNs (virtual private networks) and Denial of Service (DoS) attacks.

To take the quiz see: Fight Spam Quiz

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Earlier today, the Retail Council of Canada (RCC) issued a news release and submission to the Standing Committee on National Finance regarding retail pricing in Canada.  The Committee commenced a study of the reasons for price differences in Canada and the United States last fall, and has heard from a wide spectrum of witnesses, including from government (the Competition Bureau, Canadian Heritage, Transport Canada, CBSA and Department of Finance), the private sector, academics and industry associations and groups.

In addressing the Committee, the RCC’s President Diane Brisebois urged them to “help set the record straight about the real causes of price differences in Canada versus the United States”.

According to the RCC, Canadian retailers are confronted by the following factors that impact retail pricing in Canada: (i) import duties on finished goods, (ii) supply management affecting food product prices (i.e., marketing boards that impact the prices of dairy, poultry and other products), (iii) vendor pricing (i.e., higher prices for Canadian retailers) and (iv) regulatory harmonization (e.g., in the book industry).  The RCC emphasized particularly emphasized existing “outdated” tariffs for adversely impacting Canadian retail prices.

The RCC’s submission discusses, among other things, the Canadian retail industry and suggested areas for government action (in relation to country pricing, duty remission on imported consumer goods, supply management and regulatory harmonization/red tape reduction).

Interestingly, the RCC did not address any competition or marketplace concentration issues in its submission, which is interesting given the high level of consolidation in many Canadian industries (including in some retail segments), except to comment on increased foreign competition:

“These soft demand conditions will, combined with a number of other elements, change the competitive dynamic in Canada’s retail industry. Growing consumer use of the internet has greatly increased price transparency. Parity with the U.S. currency has encouraged consumers to compare prices across the border, and indeed to shop in the U.S.. New foreign competitors continue to enter the Canadian market, bringing world-class competitive capabilities. Slightly more than half of the members that participated in RCC’s research expect their retail prices overall will be lower than in 2011. Only one-third expect their retail prices will rise. For the latter group, commodity costs are sighted as the reason for higher prices (e.g., food, building materials, etc.). Many of the respondents have planned further initiatives to reduce costs and improve efficiencies which should help retailers keep prices competitive. Retailers will be helped further by a manageable pace of inflation in other operating costs such as transportation, occupancy, and labour costs.”

For the Retail Council’s news release and submission see:

News release

Submission

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