Competition Bureau fines Sears for deceptive ads

Sears Canada Inc. was ordered to pay $487,000 today, following the Competition Bureau's January ruling that the retailer's ads exaggerated the amount consumers would save when buying tires on sale.

The Toronto Star
April 1, 2005

Competition Bureau fines Sears for deceptive ads
Canadian Press

OTTAWA — Sears Canada Inc. was ordered to pay $487,000 today, following the Competition Bureau's January ruling that the retailer's ads exaggerated the amount consumers would save when buying tires on sale.

The fine includes $100,000 in penalties and $387,000 towards the Competition Bureau's legal costs.

"This kind of deceptive marketing practice hurts consumers, business competitors and competition," Raymond Pierce, deputy commissioner of competition, said in a statement.

"Consumers deserve the truth about prices advertised by retailers."

In late 1999, Sears advertised sales such as "Save 45 per cent" on five types of all-season tires. But the Competition Bureau's quasi-judicial tribunal found that less than two per cent of the tires were actually being sold at the claimed full price before the sale, in violation of the Competition Act's deceptive marketing practices provisions.

Sears, which divested itself of its 49 auto centres last March, had challenged the act, arguing it violates the merchandiser's ``fundamental freedom of commercial expression" under the Charter of Rights. That challenge was unsuccessful.

The company also disputed much of the rest of the Competition Bureau's case before the tribunal, complaining of "arbitrary and inflexible" enforcement. Sears said there was no evidence consumers had been harmed.

The Competition Bureau had been seeking a $500,000 administrative penalty.

Sears shares (TSX: SCC) closed Friday at $22.30, up five cents, on the Toronto Stock Exchange.


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Risks: Competition Act, Canada, Competition Bureau, Deceptive marketing practices, Canada, 20050401 Competition Bureau

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