Some suppliers of aftermarket parts and services for the Mk7 are based in Canada. This post highlights some of the guidelines these Canadian suppliers are expected to follow.

This information is provided by the Competition Bureau Canada who states their purpose is:

The Competition Bureau, as an independent law enforcement agency, ensures that Canadian businesses and consumers prosper in a competitive and innovative marketplace. We are a federal institution that is part of the Innovation, Science and Economic Development Canada portfolio.

## Competition Guide

Selected advertising guidelines found on the Competition Guide webpage

Key points to be aware of:

• encouraging the provision of sufficient information to enable informed consumer choice.
• contains criminal and civil provisions to address false or misleading representations and deceptive marketing practices
• Under the criminal provisions, the general provision prohibits all materially false or misleading representations made knowingly or recklessly.
• Under the civil provisions, the general provision prohibits all materially false or misleading representations.
• Other provisions specifically prohibit performance representations that are not based on adequate and proper tests,

## The Competition Act

To contravene the Act, a representation must be “false or misleading in a material respect.” This phrase has been interpreted to mean that the representation leads a person to a course of conduct that, on the basis of the representation, he or she believes to be advantageous. “Material” does not refer to the value of the product to the purchaser but, rather, the degree to which the purchaser is affected by the representation in deciding whether to purchase the product.

#### paragraph 74.01(1)(b) — performance representations not based on adequate and proper tests;

Paragraph 74.01(1)(b) of the Competition Act is a civil provision. It prohibits the making, or the permitting of the making, of a representation to the public, in any form whatever, about the performance, efficacy or length of life of a product, which is not based on an adequate and proper test. The onus is on the person making the representation to prove that the representation is based on an adequate and proper test. Under this provision, it is not necessary to demonstrate that any person was deceived or misled; that any member of the public to whom the representation was made was within Canada; or that the representation was made in a place to which the public had access. Subsection 74.03(5) directs that the general impression conveyed by a representation, as well as its literal meaning, be taken into account when determining whether or not the representation is false or misleading in a material respect.

If a court determines that a person has engaged in conduct contrary to paragraph 74.01(1)(b), it may order the person not to engage in such conduct, to publish a corrective notice and/or to pay an administrative monetary penalty of up to $750,000 in the case of a first time occurrence by an individual and$10,000,000 in the case of a first time occurrence by a corporation.

The onus is on advertisers to ensure that claims about the performance, efficacy or length of life of their products have been substantiated by an “adequate and proper test.” The phrase “adequate and proper test” has not been defined by the legislation in order to preserve flexibility in an increasingly complex and highly technical field of expertise. The test must have been concluded before the representation is made. In other words, a subsequent substantiating test would not exempt an advertiser from liability under this provision.

Paragraph 74.01(1)(b) requires an advertiser to proffer evidence in support of the tests, after which it is open to the Commissioner to lead evidence to show that the testing is not “adequate and proper.” Performance claims that raise a question under the Act fall into two broad categories: those that are inappropriate in relation to the actual test results and those that are based on poorly designed test methodologies.

### 1. Inappropriate claims

If the performance claim is broad, the existence of adequate and proper test relevant to only one portion of the claim or under only one condition of use is insufficient.

Results must not only be significant but must be meaningful.

### 2. Test methodology

The test should indicate that the result claimed is not a mere chance or one-time effect.

Non-repetition of test — it is axiomatic that the reliability of the data resulting from a test is conditional upon the achievement of similar results from a repetition of the test.

User-tests — When consumers are asked to use and evaluate a product, various “test effects” can influence their behaviour. For example, a user testing a gas-saving device may modify his or her driving habits to a degree sufficient to affect the observed results. Furthermore, since such tests are not conducted under “ideal controlled test conditions,” other factors such as climate and location would also have an effect. Unless such weaknesses are controlled, user tests would not be adequate and proper. At minimum, control groups are necessary in such situations.

Most court actions under the former paragraph 52(1)(b) have related to representations made where no tests had been undertaken or where user tests (notably of gas-saving devices) have not been found adequate to substantiate the claims.

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