Canada’s Competition Bureau sues 3 wireless giants

Sep 14, 2012, 7:03 PM

Associated Press Writer

TORONTO (AP) – The Canadian Competition Bureau said Friday it is suing the country’s three biggest wireless carriers and an industry association for US$31.79 million (CA$31 million) in customer refunds over what it called “misleading” advertising of texting services.

“Our investigation revealed that consumers were under the false impression that certain texts and apps were free,” said bureau commissioner Melanie Aitken. She said many only discovered the fees when they got their phone bills.

The federal agency said it is seeking US$10.25 million (CA$10 million) each from Telus Corp., Rogers Communications Inc., and Bell Canada.

The three companies control 95 percent of the telecom market. The lack of competition means Canada has some of the world’s highest cell phone rates.

The bureau said its investigation concluded that Bell, Rogers and Telus, in conjunction with the association, facilitated the sale of premium-rate digital content, such as trivia questions and ringtones, for fees that had not been adequately disclosed.

The premium-rate digital content can cost up to US$10.25 (CA$10) per transaction. The agency said the telecom companies pocketed a share of the revenues.

The agency said it also seeking US$1.3 million (CA$1 million) from the Canadian Wireless Telecommunications Association, the industry’s main lobby group.

In a statement, the association said it had approached the Competition Bureau a year ago to seek guidance on how to make sure third-party advertisers are being honest with consumers. It said the wireless carriers don’t make or control the text messaging services in question but manage the billing on behalf of third parties.

“We were therefore extremely disappointed to receive an ultimatum to either enter into a specific settlement agreement or face immediate litigation,” the statement said.

Bell spokeswoman Jacqueline Michelis said the company was not commenting directly on the lawsuit, adding that the association’s comments speak on behalf of the industry.

Rogers and Telus did not immediately respond to calls for comment.

The legal proceedings are before the Ontario Superior Court of Justice.

(Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

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Canada’s Competition Bureau sues 3 wireless giants