The Competition Bureau has provided misleading advertising guidance in its new Deceptive Marketing Practices Digest. The Digest is being reintroduced on a pilot basis and will offer the Bureau’s enforcement perspective on current issues in advertising and marketing.
The issue released on June 10 focuses on key marketing issues in the digital age as the Bureau responds to the reality that "digital media has changed the way that commercial representations are designed, distributed and consumed." This issue discusses such topics as online advertising, the use of disclaimers in digital media, and the complexities surrounding "astroturfing,"—the practice of disguising independent reviews as online ads.
While the general legal issues that can arise in the digital world may not be novel, they require "extra care" given unique features of the medium, such as ads viewed on mobile devices rather than in print and the use of online reviews and testimonials.
Disclaimers may be less relevant in digital advertising
The Bureau provides guidance on the challenges associated with advertising on digital formats where ads "unfold" through a series of steps or pages and are frequently viewed on smartphones. One major issue the Bureau identifies is that disclaimers may have less utility, and offer advertisers less protection, in effectively qualifying the general impressions of an online advertising campaign.
- Businesses should be aware that simply reproducing valid disclaimers from their print ads may not be a sufficient safeguard in the digital context.
Regulatory authorities turning attention to online reviews and "astroturfing"
The issue also focuses on the growth of consumers seeking to research a product or service using online reviews, including on social media sites. The Bureau noted that fake consumer reviews that are created or commissioned by companies as a form of advertising (i.e., "astroturfing") are more likely to be found misleading by the Bureau the more they are disguised as authentic reviews. The Bureau believes that online consumer reviews significantly influence buying decisions, citing global enforcement examples of the seriousness of the issue.
- Any sponsored or employee testimonials (even if voluntary) could result in serious questions from enforcers if the material connection, financial or otherwise, is not disclosed in the ad.
In summary, while the Bureau recognizes both the importance of online commerce to the new economy and the new complexities that digital advertising strategies can also raise for businesses. The Digest provides some welcome guidance for advertising in the digital age.
To discuss these issues, please contact the author(s).
This publication is a general discussion of certain legal and related developments and should not be relied upon as legal advice. If you require legal advice, we would be pleased to discuss the issues in this publication with you, in the context of your particular circumstances.
For permission to republish this or any other publication, contact Janelle Weed.
© 2021 by Torys LLP.
All rights reserved.