Court Decisions

Court Proceedings, Judgments and Court Orders — 2008

To protect confidential information, the Bureau does not reveal the names of the companies involved unless they were otherwise made public.

• 2009
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• 2001
• 2000

Laser Depot, Corporate Supply Centre and Direct Vision Marketing

Date: 2008-11-10
Event: Guilty Plea / Sentencing
Court: Court of Quebec
Court Number Files: 500-73-002788-079
Parties: 9128-6815 Quebec Inc. operating as Laser Depot; 9070-6136 Quebec Inc., operating as Corporate Supply Center; Marketing Vision Directe Inc., also known as Direct Vision Marketing Inc.; Ronald Macdonald; Emilio Ciciola and Giovanna (Johanne) Marzitelli.
Provision(s): paragraph 52.1(3)(a) of the Competition Act — deceptive telemarketing; paragraph 52.1(2)(a) of the Competition Act — deceptive telemarketing; paragraph 52.1(2)(b) of the Competition Act — deceptive telemarketing
Products or services: Toner Cartridge

Summary:

The Bureau launched an investigation into telemarketers who allegedly convinced Canadian businesses to accept and pay for toner cartridges by misleading them into thinking they were dealing with their regular supplier and creating the alleged impression of a cost saving before an imminent increase in price. On June 8, 2007, criminal charges were laid against three individuals and three companies for engaging in alleged deceptive telemarketing activities in Quebec.

On October 22, 2008, Ronald Macdonald, Emilio Ciciola and Giovanna Marzitelli plead guilty to the charges.

Macdonald received a condition sentence of imprisonment of 15 months, 742.1 Cr.c., a $30,000 fine and a 10-year prohibition order under section 34(1) of the Competition Act prohibiting any form of telemarketing.

Ciciola received a condition sentence of imprisonment of 15 months, 742.1 Cr.c., a $30,000 fine and a 10-year prohibition order under section 34(1) of the Competition Act prohibiting any form of telemarketing.

Marzitelli received an absolute discharge, 730(1) Cr.c., a $4,000 fine to be paid to the Fondation de l’Hôpital Sainte-Justine and a 10-year Prohibition Order under section 34(1) of the Competition Act prohibiting the sale of certain products by means of telemarketing.

The Public Prosecution Service of Canada decided to stay proceedings with respect to the companies charged. The companies were ordered to be dissolved.

News Release: None

(3067785)

Northern Response International Ltd.

Date: 2008-10-21
Event: Registration of Consent Agreement
Court: Competition Tribunal
Court File Number: CT 2008-009
Parties: Northern Response International Ltd.

Provisions: 74.01(1)(a) and (b) of the Competition Act - False or misleading representations and representations as to performance without adequate and proper test.

Product: Velform Sauna Belt

Summary: The Commissioner of Competition registered a consent agreement with the Competition Tribunal which required Northern Response International to pay $350,000 in Administration Monetary Penalties and $50,000 towards the Bureau’s costs. Additionally, Northern Response was required to offer full refunds to consumers who purchased the Velform Sauna Belt, an alleged weight-loss device. The company agreed to broadcast corrective notices on television and to cease using unsubstantiated claims in the sale and promotion of the Velform Sauna Belt.

News Release: October 21, 2008 Competition Bureau Stops Unproven Claims in Weight Loss Infomercials

Court documents: Consent agreement available on the Competition Tribunal’s Web site

(3099907)

Datatech Communications Inc.

Company Name: Datatech Communications Inc., I-Point Media, CommerceCorp Consultants Inc, et al
Date: 2008-03-07
Status: Stay of proceedings
Court: Court of Quebec
Court File Number: 500-73-002784-078
Parties: Bakomichalis, Elias; Brewer, Robert; Bakomichalis, Kyriakos; Macneil, Gregory; Balyta John; SPENCER, Stacey Michael; Delormier, Wayne Matthew; Diabo, Ronald; Said, A. Zack; Quadri, (Sayyid) Shahzanish; Aguba Matthew.
Provision(s): Paragraph 52.1(3)(a) of the Competition Act — deceptive telemarketing; paragraph 52.1(2)(a) of the Competition Act — deceptive telemarketing; and 52.1(9)(a) of the Competition Act — deceptive telemarketing; subsection 52(1) of the Competition Act — false or misleading representations
Products: Business to Business Directory listings

Summary:

On May 22, 2007, the Competition Bureau laid charges against 11 individuals with four counts each under the deceptive telemarketing provisions of the Competition Act for their involvement in a Montreal-based scheme directed toward businesses in the United States. The accused operated under the following names: Datatech Communications Inc.; Liberty Communications; I-Pages America; Infone Publications; I-Point and CommerceCorp.

The charges stem from a Bureau investigation of complaints it received from small and medium-sized businesses in the U.S. alleging that they had received deceptive telemarketing calls from the accused and their companies. The victims were led to believe they were receiving a call from their existing supplier of business directories to renew a subscription, when in fact the American companies had never dealt with the accused previously. As part of the alleged scam from 2000 to 2004, telemarketers contacted their victims, claiming that they were updating information in their business directory listings. The telemarketers implied that the business had ordered a listing in the past and that someone in the company had already authorized an order.

On March 7, 2008, the Public Prosecution Service of Canada (PPSC) decided to stay proceedings in this case having regard to all relevant circumstances.

(3016242)

Imperial Brush Co. Ltd. and Kel Kem Ltd. (c.o.b. as Imperial Manufacturing Group)

Date: 2008-02-07
Event: Court Decision
Court: Competition Tribunal
Court File No: CT-2006-010
Parties: Imperial Brush Co. Ltd. and Kel Kem Ltd. (c.o.b. as Imperial Manufacturing Group)
Provisions: Paragraph 74.01(1)(b) of the Competition Act – Adequate and Proper Testing
Product: Creosote Reducing Products

Summary: On February 7, 2008, Justice Phelan of the Competition Tribunal issued an order against Imperial Brush Co. Ltd. and Kel Kem Ltd. (c.o.b. as Imperial Manufacturing Group) pursuant to the Competition Act’s deceptive marketing practices provisions.

The Commissioner of Competition alleged in this application that the respondents had engaged in reviewable conduct by making representations to the public that were not based on proper and adequate tests. The representations at issue were found on the labels of four stove and fireplace maintenance products. According to some of these representations, the products were said to eliminate creosote, reduce creosote to an ash, react with chimney deposits to reduce their adhesiveness, or help prevent chimney fires. The Commissioner submitted that the respondents had failed to perform proper and adequate tests before making these representations to the public.

The respondents denied the Commissioner's allegations and asserted that the representations were based on proper and adequate tests. They further submitted that paragraph 74.01(1)(b) infringed section 2(b) of the Canadian Charter of Rights and Freedoms and was not justified under section 1.

The Tribunal found that paragraph 74.01(1)(b), while infringing section 2(b) of the Charter, was justified under section 1.

The Tribunal also concluded that the respondents' representations were not based on adequate and proper tests before they were made to the public. Justice Phelan provided the following non-exhaustive list of factors to be considered in determining whether a test is "adequate and proper":

• depends on the claim made as understood by the common person;
• must be reflective of the risk or harm which the product is designed to prevent or assist in preventing;
• must be done under controlled circumstances or in conditions which exclude external variables or take account in a measurable way for such variables;
• are conducted on more than one independent sample wherever possible (e.g. destruction testing may be an exception);
• results need not be measured against a test of certainty but must be reasonable given the nature of the harm at issue and establish that it is the product itself which causes the desired effect in a material manner; and
• must be performed regardless of the size of the seller's organization or the anticipated volume of sales.

The Tribunal issued a cease-and-desist order and also ordered the respondents to pay an administrative monetary penalty of $25,000.00.

On May 14, 2008, the Tribunal ordered that the respondents insert a notice of the Tribunal's findings in one English and one French national newspaper and that they pay the applicants' costs in the amount of $40,000.00.

Court documents

2005-04-01 – Reasons and Order
2005-01-11 - Reasons for Order and Order Regarding Public Notice and Costs

News Releases

2008-02-11 - Competition Bureau Wins Court Order Against Chimney Products Company
2008-02-11 - Competition Tribunal Imposes Terms of Order Against Imperial Manufacturing Group