Responsibility for Representations Under the Competition Act

Below is an excerpt from John McKeown’s June 2015 Mailer.

The weather is quite pleasant so I will make no comment. Following up on misleading advertising it is important to understand the rules for determining who is responsible for the making of alleged misleading representations. The rules are clear but frequently come as a shock to importers of products.

Responsibility for Representations Under the Competition Act

For the purposes of both the criminal and reviewable matters, the Act contains specific rules to clarify the responsibility for the making of representations within the chain of distribution. A representation that is:

a)   expressed on an article offered or displayed for sale, its wrapper or container,

b)   expressed on anything attached to, inserted in or accompanying an article offered or displayed for sale, its wrapper or container, or anything on which the article is mounted for display or sale,

c)    expressed on an in-store or other point-of-purchase display,

d)   made in the course of in-store or door-to-door selling to a person as ultimate user, or by communicating orally by any means of telecommunication to a person as ultimate user, or

e)   contained in or on anything that is sold, sent, delivered, transmitted or in any other manner whatever made available to a member of the public,

is deemed to be made to the public by and only by the person who caused the representation to be so expressed, made or contained and, where that person is outside Canada, a representation described in paragraph (a), (b), (c) or (e) is, for the purposes of the relevant sections of the Act, deemed to be made to the public by the person who imported the article, thing or display into Canada.

Subject to the provisions summarized above, a person who, for the purpose of promoting, directly or indirectly, the supply or use of a product or any business interest, supplies to a wholesaler, retailer or other distributor of a product any material or thing that contains a representation, which is false or misleading contrary to the provisions of the Act, is deemed to have made that representation to the public.

In most cases the impact of the rules are straight forward. However, they frequently come as a significant surprise to importers of prepackaged products or importers who reproduce representations made by their supplier in point of sale material. Importers should consider their potential liability early in the process and act appropriately.

Click here to read the entire mailer.