Competition Bureau's Investigation Leads to $95,000.00 Fine for Multi-Level Marketing Company

OTTAWA, May 18, 2001 — Lifestyles Canada Ltd. was fined $95,000 after pleading guilty, in the Ontario Superior Court of Justice, to four criminal charges under the Competition Act's multi-level marketing plan provisions, the Competition Bureau announced today. A Prohibition Order was also imposed on the company restricting further anti-competitive conduct. Today's ruling comes as a result of the Competition Bureau's investigation of Lifestyles Canada's recruitment practices.

"Enticing new recruits through grossly exaggerated income expectations harms those who join such plans as well as competitors who play fair," said Raymond Pierce, Acting Deputy Commissioner of Competition, Fair Business Practices Branch. "This case again shows the need to warn that if something looks too good to be true, it probably is."

Under the Competition Act, it is illegal to make references to earnings in a multi-level marketing plan without disclosing the income of a typical participant. As part of its recruitment efforts in 1999-2000, Lifestyles Canada and its participants used Internet web sites, pre-recorded telephone messages, promotional material and meetings to highlight participants in their multi-level marketing plan earning hundreds of thousands or even millions of dollars, but failed to disclose that the income of a typical participant was between $399 and $2,000 per year.

Lifestyles Canada pleaded guilty to similar charges in 1994, when it became the first company prosecuted under the amended multi-level marketing provisions of the Competition Act. Lifestyles Canada sells botanical extract blends, vitamins, nutritional supplements, personal care products, household cleaning products and a diet program.

In addition to the fine and prohibition order against Lifestyles Canada, the Ontario Superior Court of Justice also imposed Prohibition Orders against two Ontario participants in the multi-level marketing plan - Pat Ashby of London and Joseph Lau of Toronto. It is anticipated that similar Prohibition Orders will be imposed against two Alberta participants in the near future.

The Competition Bureau is an independent law enforcement agency which ensures that all Canadians enjoy the benefits of a competitive economy. It oversees the application of the Competition Act, the Consumer Packaging and Labelling Act, the Textile Labelling Act and the Precious Metals Marking Act.

Media Enquiries, please contact:

Eric Glaude
Communications Directorate
Competition Bureau
819-994-0349

General Public Enquiries, please contact:

Information Center
1-800-348-5358