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Rogers Facing $10 Million Penalty for Misleading Wireless Ad Claims

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Friday November 19, 2010
The Competition Bureau has come down hard on Rogers over wireless advertisements that claiming fewer dropped calls than the new entrants.  The Bureau is seeking a $10 million penalty and an immediate end to the campaign. The Bureau could find no evidence for the claims, noting that "the spectrum auction was intended to enhance competition in the wireless sector. New entrants attempting to gain a foothold in the market should not be discredited by misleading claims made by their competitors."  The decision is stunning (and expensive) rebuke to Rogers and indicative of the ongoing effort to combat the successful entry of new competition into the Canadian wireless marketplace.
Comments (7)add comment

Anon-K said:

Roger appeal?
They may have grounds for appeal. Chatr connects into the Rogers main network by the looks of the coverage map at their website. So, if the claims were related to travelling, then they may have grounds... after all, most of the new entrants have spotty coverage (and little to no coverage between major centres).

I've not seen any of the ads, so I don't know the specifics of the claims.
November 19, 2010

Adeel Khamisa said:

Will the fine pass down onto consumers?
Although I'm happy to see the competition bureau finally "come down hard" on Rogers, but as a customer I'm worried that this cost will pass down onto me a user. If there were a financially sensible alternative, I would switch at any increase in fees after this.
November 19, 2010

Paul said:

It is true
To Anon-K,
You are incorrect, and showing that Rogers false advertising (or the new entrants lack of good advertising) is working.

A. For at least Wind Mobile, when you are out of their coverage area, you are roaming on the Rogers Network, so there is nothing spotty there. (coincidently, for less money then Fido charged me for Long Distance to call wherever it was I was calling).

B. I have never had a dropped call on Wind. What a lot of people are complaining about is spotty coverage. This is true, but it is not dropped calls. Those are too different things (see AT&T in the US. Full signal strength yet you get disconnected).

To Adeel Khamisa,
10 Million is nothing compared to the cost of starting up the Chat-R brand to begin with. Trust me, you're already paying through the nose for it.



What really gets me about this ruling though, is that it's for the wrong thing. Chat-R is so obviously a fighting brand, that that is what the Competition Bureau should have fined them with, not this silly advertising campaign.
November 19, 2010

Graham said:

Half agreed
Paul: "What really gets me about this ruling though, is that it's for the wrong thing. Chat-R is so obviously a fighting brand, that that is what the Competition Bureau should have fined them with, not this silly advertising campaign."

I totally agree, but at least it's a start. I also believe that two separate claims were made to the competition bureau: the first was about the "fighter brand" status and the second was about this campaign. There is hope yet.
November 19, 2010

Anon-K said:

@Paul
I'll concede Wind Mobile, but what about other new entrants?

However, would (could) most consumers differentiate between a call being dropped because you've moved out of the coverage area and because of loss of signal even if in the coverage area, if, for instance, you are blocked on entering a building? You are correct in that the latter is more technically a dropped call, but to the average consumer they were talking, and then they weren't. At the end of the day it comes down to how wide your definition is for the term "dropped call". Sort of like the use of the terms ASA and Aspirin. Technically they are not the same, but most people I know have come to associate the term "Aspirin" not with the brand but with an ASA tablet.

Mind you, I am NOT saying that they should win the appeal, just that they may have sufficient grounds to get one heard.

@Adeel Khamisa: Expect it to be passed down. Rogers is a publicly traded company; they exist to make money for the shareholders, providing you with cellular service is just one means to doing that. Imagine the hit to the share price if they announced they were going to take a $10M hit on the books in order to pay the fine... This would affect the pay of the company executives.
November 19, 2010

B. Real said:

Same old
In the Montreal Gazette Rogers said they were going to fight this in court, as expect.

But let's be honest here. This was just a ruling to make the public believe they care about truth in advertising. The competition bureau hasn't given a damn about anything or anyone in a decade.

It's a pretend branch of Industry Canada that pretends to work every now and then.
November 20, 2010

the mechanic said:

the government of canada has fallen ...
… $10 million??? for what? did rogers cause a fatal food poisoning outbreak? did rogers perpetrate a devastating oil spill? $10 million for doing nothing more than boasting about how good its product is in advertising material? holy smokes! since when is that illegal? the crooked federal government of canada really is shot to hell …

… this malicious prosecution was brought not by unsatisfied rogers customers but by the lawless canadian government which is being used by two of rogers’ competitors to unfairly attack the company with hateful litigation. in actual fact, the CUSTOMERS of rogers are COMPLETELY SATISFIED with the product rogers is selling …

… and why has the corrupt canadian government agreed to assist two of rogers’ rivals by undertaking a malicious prosecution against the beloved canadian institution? the reason is because the bankrupt stephen harper government is so flat broke it will go to any extreme to find easy cash, including by laying false charges against wealthy companies like this fabricated charge against rogers communications …

… on the positive side, at least the filthy canadian government is taking rogers to court as opposed to unilaterally declaring the company guilty and then issuing an outrageous fine that can’t be opposed. there is no question in anyone’s mind that when this matter is challenged in court it will be tossed out, just like the stephen harper government should be tossed out …
December 14, 2010

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