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Competition Bureau sues Bell, Rogers, Telus over "misleading advertising" about texting services
The Competition Bureau is going after the big three wireless carriers on premium texting services.
Canada's Competition Bureau is suing Bell Canada, Rogers Communications Inc., Telus Corporation, and the Canadian Wireless Telecommunications Association over what it calls "misleading advertising" promoting premium texting services.
In a news release today (September 14), the federal agency announced it has begun legal proceedings in the Ontario Superior Court of Justice, seeking full customer refunds and penalties totalling $31 million.
The proposed administrative penalties would see Bell, Rogers, and Telus pay $10 million each, with $1 million coming from the CWTA.
The bureau also wants the big three wireless carriers to each issue a corrective notice, as well as a "stop to any representations that do not clearly disclose the price and other terms and conditions applicable to premium-rate digital content".
Its allegations have not been proven in court.
According to the bureau, its five-month investigation found that the companies and their industry association "facilitated the sale to their own customers of premium-rate digital content (such as trivia questions and ringtones) for fees that had not been adequately disclosed". The carriers then earned a share of the revenues collected.
"Our investigation revealed that consumers were under the false impression that certain texts and apps were free," Melanie Aitken, commissioner of competition, said in the bureau's release. "Unfortunately, in far too many cases, consumers only became aware of unexpected and unauthorized charges on their mobile phone bills."
In response, the CWTA issued today a news release calling the bureau's actions "alarming".
According to the CWTA, the bureau's actions could disrupt the use of common short codes, which customers use to access public transit schedules, get news alerts, donate to charities, vote on reality TV shows, and update social networks.
This could "significantly slow down – or even reverse – the deployment of e-commerce in Canada", the CWTA claimed.
“It is most unfortunate that the Competition Bureau’s actions could potentially impact the ability of Canadian consumers to access the text messaging services they have come to enjoy and rely on,” CWTA president and CEO Bernard Lord said in the release. “CWTA and our members will do everything we can to ensure our customers can continue to choose to access these services.”
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Comments (2) Add New Comment
Sep 14, 2012 at 7:59 pm
If anyone's harmed the consumer perception of short codes, it is the companies that have surprised end-users with charges for using them. DON'T SHOOT THE MESSENGER! This speaks to the core of what's wrong with "capitalism." In a market where information would be provided to the consumer actively and freely, a good argument could be made that capitalism is justified. The CEOs who regard public access to information as harmful to the market are not doing themselves or the market any favours. Even if the allegations are totally false, the doubt raised by them can only strengthen intelligent consumerism and thereby help to stabilize the economy.
Sep 15, 2012 at 5:08 am
Bravo, the Competition Bureau has the balls to tackle something that the CRTC clearly doesn't have the stomach for, even though it is clearly in their mandate. Canada was at the forefront of communications and digital technology 20 years ago. We now fall behind third world countries in terms of service, choice, and pricing for those services, because the CRTC has allow this small handful of companies to bully the marketplace. They've been allowed to gobble up any and all competitors who offer better service and pricing, allowing them to retain the same onerous multi-year contracts, deceptive advertising and billing practices that would have consumers up in arms in other countries and in other industries. The fact that these same companies have also been gobbling up other media assets and content providers (in addition to distribution/communication networks that they already dominate) is truly alarming as it threatens not only the "free market" (which is bad for consumers and is really the only saving grace for capitalism), but also democracy itself. When a small group controls what we see, what we read, how we communicate, and ultimately what we think, we no longer have a democratic society. This story is just the tip of the iceberg, and the fine is a pittance considering the billions of dollars these companies rake in, but it's a step in the right direction and hopefully one that will shed some light on the bigger picture.
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