BUSINESS

Rogers False Advertising Case Heads Towards Close

05/14/2013 04:49 EDT | Updated 05/14/2013 04:49 EDT
CP

A legal battle between Canada’s Competition Bureau and Rogers Communications over allegations of false advertising is coming to a close.

Lawyers for the Competition Bureau filed closing arguments in a Toronto courtroom Monday, alleging that Rogers violated false-advertising rules in 2010 ads for its wireless sub-brand Chatr, the Globe and Mail reported.

The case sparked controversy last year when it was reported Rogers planned to argue that sections of the 2009 Competition Act violate the company’s Charter rights to freedom of expression.

As part of its argument, Rogers said a requirement that it carry out “adequate and proper” testing of competitors’ products before making claims about them essentially bars the company from making claims about competitors.

The Competition Bureau levied a maximum $10-million fine against Rogers in November, 2010, after finding Rogers’ Chatr wireless brand had engaged in “misleading advertising” with its claims that Chatr users experience "fewer dropped calls than new wireless carriers" and have "no worries about dropped calls".

After reviewing technical data, the bureau concluded that “there is no discernible difference in dropped call rates between Rogers/Chatr and new entrants.”

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In closing arguments, a lawyer for the Competition Bureau said the difference in dropped calls between various wireless services amounts to about one call in 500.

But Rogers’ ads — which featured wireless customers at Chatr competitors losing their calls as Chatr customers kept talking — suggested a “meaningful” difference in dropped calls, the Globe reported.

None of that is actually true,” Competition Bureau lawyer Tom Curry told the court.

Rogers maintains that the ads are true. It says it gleaned its data on dropped calls from drive testing — an industry practice of making calls from specially equipped vehicles to test the reliability of competitors’ networks.

The Competition Bureau disputed the results, saying its own data from wireless carriers contradicts the numbers provided by Rogers.

Rogers argued the standard for what constitutes an acceptable test of competitors’ networks is so onerous that it would effectively keep the company from making any claims about competitors’ technology, which in turn violates its freedom of speech.

According to Rogers' submission to the Superior Court of Ontario, the testing rule "prohibits and penalizes entirely truthful claims ... Not only are these types of claims entirely harmless, but they play an important role in consumer choice and may have a significant positive impact on prices and product innovation.”

In other words [Rogers is saying that] companies should be able to say whatever they want on the chance that their claims might be true. And if they aren't, well so what?” quipped ex-CBC and Winnipeg Sun journalist George Stephenson in a blog post.

Consumers advocacy group OpenMedia described Rogers’ strategy as essentially asking the court for “approval to lie to the Canadian public.”

For its part, Rogers has said it supports truth-in-advertising regulations, despite its objection to the testing requirement.

"We have done extensive third party tests that have substantiated our claims," Rogers spokesperson Patricia Trott told the CBC. "We are confident that the claims we have made are true and backed up by testing."

With earlier reporting