Administrative monetary penalties (Competition Act)

A franchisor, seller or broker can meet this term if marketing claims about a business, a product or a business interest are questioned. The Competition Bureau says a court that finds a violation of the civil provisions may order the person to stop the conduct, publish a corrective notice and/or pay an administrative monetary penalty. Under s. 74.1, the application is made by the Commissioner or by a person granted leave under s. 103.1. This entry covers penalties for deceptive marketing under s. 74.1 only; other parts of the Act, such as s. 79 on abuse of dominance, set their own. See also how broker marketing material can overpromise.

How the amount is set

Section 74.1(1)(c) caps the amount at the greater of two limbs, set separately for individuals and corporations: a fixed amount, which is higher for each subsequent order, and an amount tied to the value of the benefit derived from the deceptive conduct (for a corporation, one tied to its revenues where that benefit cannot be reasonably determined). The figures sit in the section and on the Bureau’s penalties page. Under s. 74.1(5), the court takes into account evidence such as the reach of the conduct within the relevant geographic market, its frequency and duration, the materiality of any representation and the person’s history of compliance with the Act. Under s. 74.1(4), the terms of the order are determined with a view to promoting conduct by that person that is in conformity with the purposes of this Part and not with a view to punishment.

What to check or ask

• Whether any earlier order or conviction has been made against the business, because s. 74.1(6) defines when a later order counts as a subsequent one
• Whether the business can show the steps it took to prevent the conduct, since s. 74.1(3) bars an order under paragraphs (1)(b), (c) or (d) if the person establishes due diligence
• Which claims the business makes to the public, and what supports each one; see reviewable conduct