Just days after Rogers Communications Inc. sent new and "innocuous" ads to a Competition Bureau lawyer for review in late 2010, a court heard Tuesday, the federal regulator "blindsided" the company with a false-advertising lawsuit demanding a $10-million penalty, and accused the communications giant of being unco-operative.
Kent Thomson, a lawyer for Rogers, laid out the course of events he says unfairly tarnished the company with "spurious" allegations in his closing arguments in the civil false-advertising trial that Rogers is facing over the feisty 2010 ad campaign for its Chatr discount cellphone service, which had initially promised "fewer dropped calls" than other new wireless companies.
The Competition Bureau alleges the company violated Canada's false-advertising rules by publishing "false and misleading" ads, and by failing to ensure its claims were backed up by "fair and adequate tests." Mr. Thomson argued Tuesday that Rogers's network testing was comprehensive – the "gold standard" in the industry – and showed that its claims were "unquestionably true."
After the bureau raised concerns about the first wave of ads, Rogers voluntarily pulled them, and replaced them with a toned-down version that only promised "no worries" about dropped calls. A lawyer for Rogers had sent the new ads to an official at the Competition Bureau on Nov. 9, 2010, but received no response, Mr. Thomson said.
Then, on Nov. 19, 2010, just seven minutes after another exchange of e-mails in which a bureau lawyer promised "an update," the bureau went public with allegations that Rogers had engaged in "egregious conduct" and violated the Competition Act with its ads. Plus, Mr. Thomson told court, Melanie Aitken, the commissioner of competition at the time, said in a broadcast interview that Rogers had refused to sign a consent agreement.
"Every word of that is false," Mr. Thomson said.
Mr. Thomson told court that the bureau had been "actively misled" by the country's upstart wireless companies, Public Mobile, Wind Mobile and Mobilicity, who he says made "false allegations" to the bureau about the Chatr ads and about the way the industry counts dropped calls.
At issue in the case is the testing Rogers did to show its network, which it argues is far superior to those of its smaller rivals, actually had fewer dropped calls. The company says its "drive tests" – which involve driving around in a specially equipped van making cellphone calls on rival networks – are the worldwide industry standard. The tests, he said, showed Rogers network had fewer dropped calls in Toronto, Ottawa, Vancouver, Calgary and Edmonton, on "virtually every test."
The Competition Bureau insists that network or "switch data," gleaned from company computers, is superior, and tells a different story. It also says that Rogers' drive tests were flawed, and that the differences between wireless carriers are too small for consumers to notice, making Rogers' claims "misleading."
But Mr. Thomson said Tuesday that no wireless industry expert agrees that switch data should be used to compare companies, since each network can be configured to count dropped calls differently. In once case, he said, data from Public Mobile excluded a kind of dropped call responsible for 35 to 40 per cent of all such incidents.
Rogers has also challenged the validity of the Competition Act's false-advertising provisions as a violation of the constitutional protection for free expression. The bureau argues that previous cases have upheld the law as constitutional.