Deceptive Marketing Practices
What marketers need to know
The Competition Act is a federal law governing most business conduct in Canada. Most importantly for marketers, the Act prohibits misleading and deceptive advertising and marketing.
The Act applies to anyone inside or outside of Canada who is conducting business in Canada, and covers marketing activities such as:
- Promotional contests,
- Testimonials,
- Claims (performance, environmental, etc.),
- Influencer marketing,
- Online reviews,
- Drip pricing, and
- Deceptive telemarketing and more.
False advertising is just one of several types of deceptive marketing. For example, deceptive marketing would occur when a company uses misleading tactics to sell its product or service.
Members can access resources to stay informed and compliant.
- CMA Guide: Contests (Members Only)
- CMA Blog: Tightening of deceptive marketing rules
- CMA Blog: Tips to avoid deceptive marketing
- Guest Blog: Contests 101 - What marketers need to know
- CMA Guide: Truthful Marketing - How to Prevent Deceptive Marketing (Members only)
- Guest Blog: Decoding rules for online reviews, influencer marketing and AI deceptive marketing claims
- CMA Blog: Green spin and enviro-friendly claims
- Guest Blog: Performance claims: Insights for marketers from the Competition Bureau
- CMA Blog: Competition Bureau outlined strategic vision to 2024, enforcement in online marketing a key priority
- CMA Blog: Influencer marketing rules - a primer on what you should know
- CMA Blog: Thinking of running a promotional contest? Start here.
The Act is administered and enforced by the Competition Bureau. In addition to the Competition Act, there are other laws that also include provisions relating to deceptive representations that marketers should know. These include, but are not limited to Canada’s Anti-Spam Legislation, Consumer Protection Acts, and the Consumer Packaging and Labelling Act.
Beyond the misleading advertising and deceptive marketing practices, the Act prohibits certain criminal offences (such as price-fixing and bid-rigging conspiracies, resale price maintenance, price discrimination and predatory pricing), and contains non-criminal provisions which allow the Competition Tribunal to review mergers and certain business practices (such as tied selling, exclusive dealing, refusal to deal and abuse of dominance).
False or misleading representations and deceptive marketing practices can have serious financial consequences. Under the criminal regime, an individual may be fined and/or imprisoned for up to 14 years. Under the civil regime, individuals are liable to penalties of up to $750,000 and corporations are liable to penalties of up to $10,000,000. For subsequent occurrences, the penalties increase to a maximum of $1,000,000 for individuals and $15,000,000 for corporations.
