On May 6, 2020, the Competition Bureau (Bureau) announced that it has been increasing its enforcement against false and misleading 2019 novel coronavirus disease (COVID-19) related advertising claims (see News Release, Competition Bureau cracking down on deceptive marketing claims about COVID-19 prevention or treatment, Competition Bureau, May 6, 2020).

As the number of false and misleading COVID-19-related claims have been growing, the Bureau has been issuing periodic guidance relating to its enforcement of the false or misleading representation and deceptive marketing practices provisions of the Competition Act, R.S.C. 1985, c. C-34 (sections 52 and 74.01).

The Bureau’s recent guidance has included a Statement on March 20 that during the COVID-19 pandemic it would focus on deceptive marketing practices (for example, false or misleading claims about a product’s ability to prevent, treat or cure the virus) and collusion by competing businesses (for example, illegal agreements about the price of a product or service). See Statement from the Commissioner of Competition regarding enforcement during the COVID-19 coronavirus situation, Competition Bureau, March 20, 2020 and Statement on competitor collaborations during the COVID-19 pandemic, Competition Bureau, April 8, 2020. See also Legal Update, Product Performance Claims: Increased Risk in Making Unfounded Claims During COVID-19 Outbreak.

Consistent with its previous COVID-19-related advertising law guidance, the Bureau indicates that it continues to be focused on both false or misleading COVID-19 product claims (which can violate sections 52 or 74.01 of the Competition Act) and performance claims that are not based on adequate and proper testing (which can violate section 74.01(1)(b) of the Competition Act). For more information, see Practice Notes, Misleading Advertising Under the Competition Act and Performance Claims Under the Competition Act.

Some of the types of specific claims that the Bureau has indicated it is concerned with include that products can prevent COVID-19 infections and performance claims relating to killing or filtering out the virus.

While the Bureau had already announced its COVID-19-related enforcement priorities and that it had “warned a company claiming that its UV and ozone air sterilization systems could kill coronavirus” (see Competition Bureau Post, X, May 1, 2020), its new announcement signals an increased level of enforcement and also an apparently growing impatience with companies making false or misleading COVID-19 product claims.

In this respect, the Bureau disclosed that it issued compliance warnings to a number of companies across Canada to stop allegedly deceptive claims, including to a “major national retailer”, as well as companies in British Columbia, Alberta, Saskatchewan, Ontario, Quebec and New Brunswick.

Importantly, the Bureau is also now reminding companies marketing to Canadians that potential penalties include criminal fines and imprisonment stating that “businesses could face severe financial penalties and jail time if their marketing practices do not comply with the law.” For more information, see Practice Notes, Competition Bureau Investigations and Criminal Competition Law Enforcement.

While the Bureau often commences advertising-related enforcement under the civil deceptive marketing provisions of the Competition Act (for example, under section 74.01), in cases involving clearly intentional or fraudulent deceptive marketing, it has also often proceeded on a criminal track under section 52. For more information about how the Bureau determines whether to proceed on a civil or criminal track, see Practice Notes, Misleading Advertising Under the Competition Act and Criminal Competition Law Enforcement.

The Bureau’s new announcement also includes a checklist for companies to help them comply with the misleading advertising provisions of the Competition Act. See also Misleading Advertising Due Diligence Checklist, Disclaimers and the Competition Act Checklist and Best Practices for Digital Marketing Checklist.

For companies and individuals marketing COVID-19-related products and services, the Bureau’s new announcement signals a heightened risk associated with false or misleading claims and performance claims that are not based on adequate and proper testing.

The Bureau’s announcement also indicates that it is monitoring and warning both larger companies, as well as smaller entities, and is prepared to proceed with enforcement on the criminal track under the Competition Act where warranted.

As such, companies and individuals that are marketing COVID-19-related products are well advised to ensure that their marketing complies with both the Competition Act and federal packaging and labelling law (that is, compliant with the Consumer Packaging and Labelling Act, R.S.C. 1985, c. C-38 and the Textile Labelling Act, R.S.C. 1985, c. T-10).