The Competition Bureau isn't satisfied with a court ruling throwing out allegations of misleading advertising against Rogers' Chatr cellphone brand, which claimed fewer dropped calls than its new wireless competitors when it launched in 2010.
The Competition Bureau said Tuesday that it was reviewing the Ontario Superior Court of Justice decision and may appeal.
"We are disappointed that the court did not agree that Rogers' claims were misleading to consumers and we are currently considering our next steps in this matter," John Pecman, commissioner of competition, said in a statement.
Three years ago, the Competition Bureau asked the courts to order Rogers to immediately stop the advertising campaign and pay an administrative penalty of $10 million — the maximum under the law.
At that time, new competitor Wind Mobile had filed a complaint with the Competition Bureau over Rogers' claims that Chatr had fewer dropped calls and a better network than its new competitors.
Rogers' talk-and-text Chatr brand was launched at the time to compete with new entrants Wind Mobile, Mobilicity, Public Mobile and Quebecor's Videotron (TSX:QBR.B).
The Competition Bureau alleged that network performance claims for Chatr weren't based on "adequate and proper tests," adding that Rogers dismantled the advertising campaign within a month of the Bureau filing its application in November 2010.
Rogers Communications Inc. (TSX:RCI.B) said it was pleased the court has confirmed that Chatr's advertising of fewer dropped calls was fair and accurate.
"We support clear, accurate and consumer-friendly advertising," Rogers said in a statement. "There is no doubt that Rogers' network performed better than networks of new wireless carriers and we believed it was important that consumers had that information."
"The court also confirmed that the drive testing used by Rogers is the best method for comparing network performance and is universally accepted, both in Canada and internationally," Rogers said of testing the network by making calls from a vehicle.
Wind Mobile couldn't immediately be reached for comment.
The court agreed with Rogers about fewer dropped calls.
"I am satisfied that the general impression given by the fewer dropped calls claim is that the advantages of fewer dropped calls and a more reliable network were available to consumers in each Chatr zone," Justice Frank Marrocco said in the decision.
Also on Tuesday, the Competition Bureau said it was pleased the court had dismissed the constitutional challenges by Rogers to key provisions of the Competition Act. The Competition Bureau also said the court agreed with its position that Rogers did not conduct adequate and proper testing beforehand to support its claims about dropped calls in some Canadian cities.
"The bureau successfully argued that the requirement for adequate and proper testing before making a claim about the performance of a product is justified."
Competition Bureau spokesman Phil Norris said the court noted that Rogers failed to do adequate network testing before its advertising campaign about fewer dropped calls in Calgary, Edmonton, Toronto and Montreal.
"That would be subject, at the court's discretion, to a penalty," Norris said of a possible fine for Rogers at a later date.
Rogers said the court found that it should have done additional testing in the urban markets noted before the launch and said this testing was completed shortly afterward.
The decision also agreed with the Competition Bureau's position that monetary penalties it can ask for are "not criminal in nature," the Competition Bureau said.
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