Good afternoon everyone.
Thank you, Mr. Chair, for inviting the Competition Bureau to appear before the committee to discuss Bill C-27, a legislative initiative that targets spam.
It is rare that one finds an idea or a point of view that almost every Canadian can agree upon. Unsolicited electronic communication, or spam, is one of the most universally reviled features of the Internet age. While its most malicious forms may be designed to spread viruses or facilitate identity theft, a significant proportion of spam involves the false or misleading promotion of products or services, particularly in the health and financial sectors.
For those less familiar with the Bureau, our mandate is to protect and promote competitive markets and to enable informed consumer choice in Canada. Our principle statute, the Competition Act, allows us to carry out both civil and criminal enforcement against, among other things, deceptive marketing practices.
With the passage of Bill C-10, the law implementing the federal budget, the penalties for deceptive marketing practices under the Competition Act were strengthened, both in terms of the monetary penalties and through the introduction of restitution orders to get victims their money back. These amendments were designed to harmonize the act with our international counterparts and to improve the bureau's ability to promote truth in advertising.
The proposed legislation before you, Bill C-27, the Electronic Commerce Protection Act, would amend the Competition Act to allow the Bureau to more effectively combat false or misleading advertising in electronic communications and better protect the integrity of electronic commerce in Canada.
Along with the CRTC and the Office of the Privacy Commissioner, the bureau would be one of three partners carrying out responsibilities under this initiative.
The 2005 report of the Task Force on Spam established by the Minister of Industry identified “gaps in current Canadian law that must be filled”. As it stands now, the Competition Act contains both civil and criminal provisions to curb the use of false or misleading advertising.
However, Canada still has no equivalent to laws found in other industrialized countries that relate specifically to electronic commerce, such as the CAN-SPAM Act in the United States or the Spam Act in Australia.
The additions to the Competition Act outlined in Bill C-27 would help to clarify more precisely what cannot be done in electronic messaging and how competition laws would apply in cyberspace.
Specifically Bill C-27 would add more targeted civil and criminal provisions with respect to false and misleading advertising in electronic messages. It would provide authority for court injunctions to restrain conduct that falls within these new provisions and make certain that the act is technologically neutral. False or misleading representations in header information, such as subject lines or sender names in e-mails, in the content of the communication itself, or in locators, such as web addresses or URLs, would now be more broadly covered.
An example of a message that we have all received is one in which the subject line suggests that the message is a greeting from a familiar friend or trusted business, but whose content turns out to be an advertisement for a dubious product from a less than reputable source. This activity would fall under the new provisions as a false or misleading header.
An e-mail or text message advertising a bogus fuel additive, for example, falsely claiming to double your car's fuel efficiency, would be an example of a false or misleading representation made in the content of a message.
Similarly, a Canadian website that chooses a domain name or search terms to suggest that it is a source of job opportunities when it is merely a collection of links and vague advice would be caught under the “false or misleading locator” provisions.
While these examples may be covered to some extent under the current act, Bill C-27 would make it clear that they are, thus making it simpler and faster to take enforcement action against these forms of misleading advertising.
In addition to administrative monetary penalties and potentially even criminal prosecution, Bill C-27 proposes to expand court injunctive powers. The bureau will be able to seek court injunctions against spammers based in Canada or using Canadian equipment to engage in false or misleading advertising, and also against those persons and businesses supplying the spammers with the equipment and services used to carry out false or misleading advertising.
To ensure that the Competition Act remains in step with technological innovation, Bill C-27 amends definitions in the Competition Act to ensure that the act applies broadly to new technologies. For example, voice-over-Internet protocol, or VoIP, and text messaging would now clearly be within the scope of the Competition Act.
Furthermore, the framework provided for in the new Competition Act civil provisions serves as the basis to empower those affected by false or misleading spam to launch private actions under the remedial scheme in the Electronic Commerce Protection Act.
This means that enforcement will be coming from all angles, not just the Bureau or its government partners. In addition to a statutory per-message amount of damages, this scheme also allows plaintiffs to sue specifically for losses incurred as a result of the deceptive communications, ensuring that victims of scams, false advertising claims and other forms of deception have a potential way to get their money back.
In these difficult economic times, we can expect to see an increase in messages targeting not only consumers but also small and medium-sized businesses, which may suffer serious financial harm if they fall prey to misleading or false advertising messages contained in spam. It is the job of the Competition Bureau to protect Canadians from this kind of activity in all economic environments and to foster confidence in an honest marketplace.
The Competition Bureau has decades of experience in conducting investigations into false and misleading advertising and working with our domestic and international partners to achieve common enforcement objectives. For example, the bureau recently launched Project False Hope, an education and enforcement initiative that targeted false or unproven cancer cure claims found online. The project has resulted in 98% of those websites targeted by the bureau changing or removing the claims at issue in order to comply with the Competition Act. As part of the initiative, the bureau worked in collaboration with the Canadian Cancer Society to produce an awareness campaign and an informative pamphlet that has reached tens of thousands of individuals.
In other collaborative efforts, the bureau has worked with domestic and international partners, such as Health Canada, the U.S. Federal Trade Commission, and the U.S. Food and Drug Administration, to combat false or misleading claims surrounding weight loss and diabetes treatments. The bureau successfully took action against almost 100 Canadian-operated websites, with the vast majority changing or removing the claims at issue in order to comply with the Competition Act.
Cooperation is key to ensuring deceptive marketers cannot hide from authorities, in any jurisdiction. Experience conducting investigations, in both the on and offline world, combined with established cooperation networks, provides the right foundation to take action against spam.
Technological progress is a positive and powerful economic driver, but it comes with new ways to engage in deception, and Canadian law must keep pace. The new provisions, combined with the current provisions in the Competition Act, will provide a more complete framework to facilitate more effective and timely enforcement against deceptive conduct in the electronic marketplace in all of its forms.
Canada has been without anti-spam legislation and is lagging behind our major international trading partners. These changes allow the bureau, together with its partners, to more confidently and effectively enforce the law in an undeniably problematic but complex area.
We at the bureau are enthusiastic about the prospect of Bill C-27 becoming law. I welcome the opportunity to discuss the bureau's role and respond to any questions the committee members may have.