Free Speech for False Advertising?

http://www.cbc.ca/news/business/story/2012/08/08/rogers-chatr.html

Rogers is hit by a lawsuit after falsely claiming their Chatr cell service is superior to new entrants into the cell phone market. After court analysis of technical data shows there is no discernable difference between Chatr and other discount brands. (I believe this case is separate from that of Rogers deliberately dropping competitor calls which is also illegal)

Rogers will argue that "Canada's Competition Act that requires companies to undergo "adequate and proper" tests of a product’s performance before making advertising claims about it" is against their constitutional right to free speech.

How did they claim it was superior? If they just said it's better, that's a matter of opinion. If they mentioned specific ways it was better that are demonstratably not true . . . well, knowingly spreading false information is usually considered outside the realm of free speech. Only thing that seems to make this fuzzy is the company says it never bothered testing its claims of superiority, so technically they didn't know their claims weren't true.

Best is Average, Better is Best in action.

I don't believe that freedom of speech has ever been construed as allowing the right to knowingly make false claims to sell a product.

Loophole Abuse says fooey to that!

As I understand it, the company says it didn't truly know it's claims were false, it had just never bothered to find out whether they were false or not. I'd say it should still be illegal, but King Zeal is right that they might win via Loophole Abuse.

It was and wasn't loophole abuse, there's just multiple laws regarding this. The loophole for false advertising specifically is that they didn't know whether or not Chatr dropped more calls than competitors or not. However the Competition Act requires them to find out before making any claim. It's on the second law that their competitor is suing them for, since they were specifically named in the lawsuit.

The maximum fine is pretty low though, just a few million dollars, so Rogers doesn't care THAT much either way.

This Competition Act would fall under industry regulation, then, and wouldn't really be a free speech issue at all.

But it would also mean constitutional rights trump laws, thus why they are arguing under charter rights to have the law struck down.

edited 8th Aug '12 10:44:16 AM by breadloaf

But by getting a license to practice a business, you give up certain rights. Like if you want to produce food products, you have to surrender your right of privacy and let government health inspectors look around your factory as much as they want.

Well, I completely agree that Rogers should lose this case super fast but I'm merely saying that if the courts don't believe it is a "reasonable law" then the Charter takes precedence. I really don't see how this isn't reasonable though.

Yeah, seems like it should be open and shut, though you never know when the defendant has enough money to throw around.

He'll probably win. It's not false advertising if the company didn't actually know it was wrong.

Can somebody who knows Canadian law explain what leg Rogers has to stand on?

It can count as "false" either if the company did not know it was wrong or if it failed to do any research to find out one way or another. This is where the U.S. FDA and FCC are getting on the case of a lot of "herbal supplement" manufacturers for making claims like "burns fat three times faster" or "improves memory" when they haven't done any reputable testing to find out if that's true.

It comes down to the principle that free speech does not mean that you have the ability to speak in ways that incite or inflict direct harm. Advertising that some boiled swamp grass will cure cancer has as much potential to inflict harm as yelling "Fire!" in a crowded theater.

edited 8th Aug '12 12:29:09 PM by Fighteer

This was in Canada, though, so the wording of the laws and established legal precedent may be different.

Okay so they're arguing for a "Charter Right", which is that they have the constitutional right to advertise falsely. They are being dinged on the Canada Competition Act which requires companies to verify any claim they make. It does not matter if you knew, ignorance is not a defence. Either you can prove it, or it is false advertising.

Worse, actual data that does exist refutes their claim, making it even worse for Rogers.

The Canadian Charter has this:

And the Canada Competition Act is going to have to run on...

The "demonstrably justified" is a bit confusing but there's a few general guidelines on it. Basically, the essence of it is whether the law provides good governance and improves the quality of lives of Canadians than if it did not exist. Then it is a reasonable limit on a right.

Our (Dutch) constitution has a rather Obvious Rule Patch to prevent situations like this. Take a look at Article 7, which covers free speech:

Problem solved. Maybe Canada's constitution should have something similar?

edited 13th Aug '12 4:53:06 AM by MidnightRambler

It might not be necessary so long as the court decides it was a reasonable limitation on free speech.