Rogers Communications could face more than $10 million in penalties for allegedly using misleading advertising to promote its talk-and-text discount wireless brand, Chatr.
The federal Competition Bureau said Friday its investigation has determined there is no evidence to support the claim that Chatr’s mobile phone customers experience fewer dropped calls than they would at new rival wireless carriers.
“Consumers are very vulnerable to this sort of misleading representation,” said Commissioner of Competition Melanie Aitken.
“Consumers can’t tell the difference and therefore they don’t have accurate information when they’re trying to make buying decisions.”
The Competition Bureau is asking the courts to order Rogers to immediately stop the advertising campaign and pay an administrative penalty of $10 million–the maximum under the law.
The regulator also wants Rogers to pay restitution to any affected customers and issue a corrective notice to inform the public about the issue.
Rogers said it stands by its claims and will “vigorously” defend them in court.
“We’re surprised by the actions of the Competition Bureau,” said Ken Engelhart, senior vice-president of regulatory affairs at Rogers.
“We have extensive, independent third party testing to validate our claims and we stand by our advertising.”
The move against Rogers comes after a complaint by new wireless carrier Wind Mobile over Rogers’ advertising claims about its network superiority.
Aitken said the bureau had access to “extensive” technical data to determine there is no difference between Rogers’ network and those of the new wireless companies when it comes to dropped calls.
Rogers said it has independent third-party network testing by Score Technologies that validates Chatr’s advertising.
But until the Ontario Superior Court of Justice makes a ruling, Rogers can keep using the ads, Aitken said.
“It’s up to them to decide what to do in the face of our very clear position and our clear indication that we’re going to take this to court.”
Anthony Lacavera, chairman and CEO of Wind Mobile’s parent company Globalive, said he was pleased the bureau was taking action.
“Canadians deserve a real competitive market in telecommunications and this is a positive step forward.” Lacavera said.
Chatr was launched several months ago by Rogers, which also owns Rogers Wireless and Fido, to compete in the talk-and-text market, Meanwhile, Bell relaunched it Solo brand to win these customers.
New wireless carrier Mobilicity has also taken Rogers to the Competition Bureau, alleging that Chatr is too similar to its own talk-and-text services.
