Comwave enters into consent agreement regarding internet service ads
Comwave Networks Inc. is a Toronto-based ISP, “that provides a range of communications services to consumers, including internet and home phone services.” It attracted the attention of—and eventually an investigation by—the Competition Commission because of several marketing techniques it began using in 2011. On 19 September 2016 Comwave entered into a Consent Agreement with the Commission which stipulated certain findings. Comwave’s advertising made statements about the prices for its telecommunications services, but in fact it also charged consumers “Non-Optional Fees” which were disclosed in fine print disclaimers. Its telephone intake staff were required to review these various Non-Optional Fees with consumers prior to sale and installation with the services, but the Commission nonetheless concluded that this was not enough to displace the misleading advertising about prices. Similarly, Comwave’s advertising about home phone service offered unlimited local calling, using language such as “The Lowest Price Home Phone line with Unlimited Calling,” but had disclaimers which actually limited home phone service to 3000 minutes per month. It also offered the public special price offerings, such as “6 months free home phone service,” but with terms and conditions attached that would only be explained by the telephone intake staff. Further, Comwave offered unlimited internet services, using phrases like “No caps on downloads,” “Limit free,” and “Now enjoy watching all the movies you want,” but in fact there were disclaimers that imposed a monthly limit on downloads, beyond which the customer’s download speeds would be reduced.
The Consent Agreement notes that Comwave did not admit to the Commissioner’s conclusions but that it did not contest them, and that the Commissioner agreed to more favourable terms “than would otherwise be the case” because of Comwave’s “full and timely cooperation with the Commission’s inquiry.” It is also noted that Comwave had taken various steps to remediate the problematic advertising, such as removing the limiting disclaimers, download limits, etc. In the result, Comwave agreed to post a “Corrective Notice” on its customer portal for three months, in which it outlined that the advertising described above “raised concerns under s. 74.01 of the Competition Act,” and that it had entered into the Consent Agreement. Comwave also agreed to pay $300,000.00 as an administrative monetary penalty and $60,000.00 to defray the Commissioner’s costs; and to establish and maintain a Corporate Compliance Program, which would be monitored by the Commission.