Canadian Online Marketing Regulations FAQ

canadian internet lawsWhat is the Canadian Competition Bureau?

The Canadian Competition Bureau is an Independent law enforcement agency that monitors Canadian online marketing regulations. The Competition Bureau is responsible for the administration and enforcement of:

  1. Competition Act
  2. Consumer Packaging and Labeling Act
  3. Textile Labeling Act
  4. Precious Metals Marketing Act

What law governs Canadian online marketing regulations?

Canada’s Competition Act — commonly called C-34 — is the law governing business conduct in Canada including online marketing. C-34 covers both civil and criminal actions.

In general, what does C-34 say about false and misleading advertising online?

C-34 asserts that “any representation in any form, which is false or misleading in a material aspect, is prohibited.” It also states, “A representation is material if it could lead a person to a course of conduct that, on the basis the representation, he or she believes to be advantageous.”

What Canadian online marketing regulations does C-34 address?

The Competition Act addresses issues related to “commercial” websites and email. Though, depending on the circumstances, statements made in chat rooms, news groups and message boards can also fall under the act.

What actions does C-34 prohibit?

Among other things, C-34 prohibits:

  1. Deceptive telemarketing;
  2. Pyramid schemes;
  3. Advertising at bargain price a product not available in reasonable quantities;
  4. Selling a product at a price above the advertised price;
  5. Conducting contests, lotteries or games of chance or skill without making fair and adequate disclosure of, among other things, material facts that could affect winning potential.

Canada’s online marketing law also sets parameters for multilevel marketing plans.

What if I put a disclaimer about a product or service on another page of the website? Will that satisfy Canadian online marketing regulations?

C-34 addresses Internet user behavior. In doing so, the law requires that any disclosure information must appear in close proximity to the thing it is annotating. In the language of the Canadian government:

“Businesses should not assume that consumers read an entire website, just as they do not read every word on a printed page. Accordingly, information required to be communicated to consumers to ensure that a representation does not create a false or misleading impression should be presented in such a fashion to make it noticeable and likely to be read.”

Under Canadian online marketing regulations, who is responsible for an advertisement or website in violation of C-34?

According to Canadian law, “The person who has caused the [false or misleading] representation to be made” can be charged under C-34. While everyone involved in a marketing campaign may not be responsible for an ad violation, officials may consider the roles of:

  1. Designers
  2. Ad agencies
  3. Selling Company
  4. Media outlets
  5. Host/ISPs

Officials look at facts on a “case-by-case basis” when determining causation. Ultimately, courts pin the penalty on the entity that controlled the project. For example, if a company hires an advertising agency to create material, the contracting company has the ultimate say on “whether [or not] the campaign proceeds.” As such, the contracting company would be responsible. Hosts and ISPs would not be held responsible under similar circumstances.

What is the Canadian online marketing regulation “publisher’s defense” rule?

Section 74.07 of Canada’s Competition Act outlines the “publisher’s defense.” It states that anybody who “prints or publishes or otherwise disseminates a representation, including an advertisement, on behalf or another person in Canada” is not responsible for any marketing violations.  But there is a hitch. In order to successfully evoke the publisher’s defense, an entity must have its client’s address to ensure that the publisher is not simply “acting as a conduit” for the business.

C-34 has a section called “Applying the Competition Act On-Line.” What are the main points?

  1. General impression and literal meaning are both considered when reviewing an ad for legal action.
  2. Asterisks are a universally well-known signal of a disclaimer and should be used when possible.
  3. “A disclaimer can only qualify a representation; it cannot give or retract a false or misleading representation.”
  4. Ideally, a disclaimer should appear on the same screen and close to the statement it references.
  5. Writing “see below for eligibility restrictions” is an acceptable way to alert consumers of a related disclaimer; “See below for details” is an unacceptable disclaimer alert.
  6. Consistency with hyperlinks is important.
  7. Pop-ups and links to other pages can be used, but each case is examined individually. Basically, don’t be tricky.
  8. “Hyperlinking a single word or phrase in an advertisement may not be adequate.”
  9. If you use “attention grabbing tools” for disclaimers you can’t use the same tools in the ad, so as not to distract.
  10. Disclaimers must not use similar colors as foregrounds and backgrounds.
  11. Consider how people view and navigate a page and put disclaimers in appropriate places. When fitting, businesses should make clicking through to a disclaimer compulsory.

What disclosures are required according to Canadian online marketing regulations?

Canada’s competition law does not outline each and every disclosure that needs to be made. In some ways the Canadian government expects folks to practice common sense. But C-34 does highlight two types of disclosures that MUST be made:

  1. Section 55 addresses Multi-level Marketing – Multilevel marketing plans must include disclosures regarding earning potentials.
  2. Section 74.06 Contests – Entities must disclose “facts which materially affect the chance of winning.” Additionally, “Notice of a contest should not require an extra step, such as sending an email or placing a phone call.” According to the law, clicking on a hyperlink is not considered an “extra step.” “

Do businesses based in other countries have to adhere to Canadian online marketing regulations?

If a website can be accessed in Canada and/or Canadians can purchase the goods on a given website, then said website must adhere to Canadian law. C-34 states: “The [Competition] Bureau will assert Canadian jurisdiction over foreign entities to the fullest extent authorized by law whenever necessary to protect the Canadian market from false or misleading representations and deceptive marketing practices.”

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