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Competitition - False and Misleading Representations
MORE CASES
Part 2
. Cineplex Inc. v. Commissioner of Competition ['representation']
In Cineplex Inc. v. Commissioner of Competition (Fed CA, 2026) the Federal Court of Appeal dismissed a Competition Act appeal, here brought against a Competition Tribunal finding that the appellant had "engaged in reviewable conduct by making pricing representations to the public that were false or misleading in a material respect" [CA ] - and issued a cease order, an administrative fine and costs.
The court considers the meaning of 'representation', here in this 'deceptive advertising' context:B. The "“Above the Fold”" Question
[39] There was a debate before the Tribunal as to what information should be considered to be "“the representation”" for the purpose of the Tribunal’s analysis. That is, should the Tribunal examine only the pricing information that would appear on a consumer’s screen when the consumer first arrived at the tickets page, without scrolling down, as the Commissioner contends? Or should the Tribunal have regard to the entire body of the webpage, including the text that the consumer would have to scroll down to reach, as Cineplex would have it?
[40] Using language adopted from the newspaper business, the information appearing above the scroll point on a webpage is described as information appearing "“above the fold”". Information only seen by scrolling down through the webpage is described as information appearing "“below the fold”".
[41] This issue is important, as most of the information regarding the Online Booking Fee only appears "“below the fold”".
[42] Appendices 2, 3 and 4 of these reasons contain screenshots from video evidence presented at trial. The selected images show what a consumer would see after they have logged in to complete their purchase, both before they add tickets to their cart (Tickets Page A) and afterwards (Tickets Page B). Appendix 2 illustrates this process on the Cineplex website as accessed through a computer. Appendix 3 shows the website purchase process as seen through a mobile phone. Appendix 4 demonstrates the purchase process through the mobile app.
(1) The Legal Argument
[43] Cineplex argues that the Tribunal erred in law by artificially severing the pricing representations contained on its website and app into two separate parts: the information appearing above the fold and the information set out below the fold.
[44] That is, Cineplex submits that the Tribunal erred by limiting its analysis to the pricing representations that appear above the fold, rather than examining the entire Tickets Page in context, including the "“below the fold”" disclosures and the dynamic price representations on the "“floating ribbon”" that appears at the bottom of the consumers’ screens. Because of the Tribunal’s threshold decision to focus exclusively on content that appeared above the fold, Cineplex submits that its analysis of the pricing information on the Cineplex website and app was "“conducted improperly in an alternate reality”".
[45] Cineplex acknowledges that courts should not review representations "“like a commercial contract”", nor should they "“go […] over every detail to make sure they understand all its subtleties”": citing Richard, above at para. 56. That said, it is an error of law to entirely disregard certain parts of a representation, and "“[t]he entire mosaic should be viewed rather than each tile separately”": The Queen v. Viceroy Construction Co. Ltd., 1975 CanLII 606 (ONCA) at p. 7, citing FTC v. Sterling Drug, Inc., (1963), 317 F.2d 669 at p. 674.
[46] In support of its argument, Cineplex points to a long line of false and misleading advertising cases that have consistently held that a disclaimer is an "“integral part”" of an advertisement and must be considered in the general impression analysis.
[47] Cineplex notes that the Supreme Court has held that in assessing whether a representation is false or misleading, the analysis "“must take account of the entire advertisement rather than merely portions of its content”": Zanin v. Ooma, Inc., 2025 FC 51 at para. 467, citing Richard, above at para. 56. See also R. v. International Vacations Ltd., 1980 CanLII 1828 (ONCA) at pp. 8-9; R. v. Pepsi-Cola Canada Ltd., 1991 CarswellOnt 680 (Ont. Gen. Div.), 40 C.P.R. (3d) 242 at paras. 5, 16. This includes having regard to parts of the document that are not immediately visible when evaluating the literal meaning and general impression of a representation.
[48] According to Cineplex, expecting customers to scroll to the bottom of a webpage is no different than requiring them to look to the fine print at the bottom of a newspaper advertisement (as in International Vacations, above), to turn to the second page of a representation (as in Richard, above), or to turn over a package of potato chips to read the disclaimer printed in small print on the back of the package (as in Pepsi-Cola, above).
[49] Cineplex also notes that in refusing to grant an injunction for an alleged violation of section 52 of the Competition Act, the British Columbia Court of Appeal considered the fact that a television advertisement contained a website address that contained further information: Bell Mobility Inc. v. Telus Communications Company, 2006 BCCA 578 at paras. 27-28. Similarly, in a passing off case, the British Columbia Supreme Court concluded that a "“difficult to read”" disclaimer displayed for seven seconds on a television advertisement was sufficient to dispel any consumer confusion: National Hockey League v. Pepsi-Cola Canada Ltd., 1992 CanLII 2324 (BCSC) at pp. 27-29.
[50] Cineplex contends that having regard to the entirety of a representation is especially important in drip pricing cases that increasingly turn on representations made in dynamic digital environments. As noted earlier, drip pricing occurs when a vendor advertises one price for a good or service but later reveals other charges as shoppers go through the purchasing process: citing Zanin, above at para. 433; Gomel v. Ticketmaster Canada LLP, 2019 BCSC 2178 at para. 15; Abihsira c. StubHub, 2020 QCCS 139, at para. 21.
[51] Cineplex says that drip pricing prohibitions are not intended to police price representations that appear "“in a one-time splash on a single page”": Zanin, above at para. 433. According to Cineplex, the Tribunal impermissibly read the dynamic Tickets Page as being comprised of two static representations—those appearing above the fold and those below. In so doing, the Tribunal artificially manufactured a dripping effect even though the Tickets Page is not a static representation but is, rather, a dynamic webpage.
[52] It is important to start by observing that much of the jurisprudence that Cineplex relies on in support of its contention that the entire webpage must be considered in determining whether a representation is false or misleading or amounts to drip pricing, relates to representations made in the context of print media or packaging and does not involve dynamic, web-based representations.
[53] For example, Richard involved a document described as a two-page "“Official Sweepstakes Notification”" that took the form of a letter supposedly signed by the manager responsible for the sweepstakes. The back side of the letter informed consumers (including Mr. Richard) that they would qualify for a $100,000.00 bonus prize if they validated their entry within five days. The mailing also contained a coupon and a return envelope on which the official rules of the sweepstakes appeared in small print. The question before the Supreme Court was whether, by mailing a document entitled "“Official Sweepstakes Notification”", the respondents had engaged in a practice prohibited by the Consumer Protection Act, R.S.Q., c. P‑40.1.
[54] It was in this context that the Supreme Court held that the analysis must consider the entire advertisement and not just portions of its content: Richard, above at para. 56. In Richard, this included both pages of the letter, as well as the coupon and the return envelope.
[55] Similarly, the representation at issue in Zanin, above, involved an advertisement published in a magazine produced by Costco, whereas the representation at issue in International Vacations appeared in a newspaper advertisement and the representation at issue in Pepsi-Cola was contained on a package of potato chips.
[56] The question for the Tribunal in this case was whether this jurisprudence was equally applicable to representations made in dynamic, interactive media such as websites and mobile apps.
[57] In submitting that cases arising in the internet context are distinguishable from those arising in print media, the Commissioner referred to the decision of the Ontario Superior Court of Justice in Bell Canada v. Cogeco Cable Canada, 2016 ONSC 6044. In Cogeco, Bell Canada sought an interlocutory injunction against Cogeco in connection with an advertising campaign that Cogeco had launched on the internet, which contained two allegedly false and/or misleading representations.
[58] In issuing an interlocutory injunction restraining Cogeco from making one of the representations in issue, the Court observed that the case raised a question as to what constitutes "“looking at the advertisement as a whole”" in the internet context. While it was not necessary to finally resolve this question for the purpose of the motion, the Court stated that it did not accept Cogeco’s submission that it should "“proceed on the basis that the entirety of what a consumer can scroll down to or link to should be considered”": both quotes from Cogeco, above at para. 26.
[59] The Court observed that Cogeco’s homepage consisted of "“five pages of text, graphics and hyperlinks and two pages of terms and conditions in the seemingly inevitable fine print”": at para. 26. The Court had some difficulty accepting Cogeco’s submission that the consumer would or should view all of this material, observing that "“[t]his sort of Internet homepage is not comparable to an ad published within a single page of a print newspaper or magazine”", citing Richard, above, as an example of this latter type of representation: Cogeco, above at para. 26.
[60] Thus, while not finally deciding the question, the Court nevertheless found in Cogeco that it was at least arguable that what the consumer would see on a single screen should be considered in deciding whether a representation is false or misleading in a material respect: at para. 27.
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(5) Conclusion with Respect to the "“Above the Fold”" Issue
[119] I understand the parties to agree that while there is jurisprudence dealing with representations made in print media as well as in radio and television advertisements, there is little jurisprudence directly addressing representations such as those displayed on the Cineplex website and app, apart from the Cogeco decision referenced earlier. That said, and as discussed above, the Tribunal made a series of factual findings with respect to the design and operation of the Cineplex website and app that support its determination that consumers are unlikely to see the information about the Online Booking Fee below the fold.
[120] These findings include the fact that Cineplex has control over its website and each of its webpages, including the information that is presented on each page, the order in which it is presented, the flow as the customer navigates through the website, the design of each page, and what is presented above and below the fold: Tribunal reasons at para. 293(a).
[121] The Tribunal further found that as a commercial website, cineplex.com is specifically designed to operate as a "“funnel”", with objectives that include assisting users in identifying movies of interest and then converting them into customers by purchasing one or more tickets. The website was also designed to facilitate a user’s easy and speedy movement through it and to encourage the user’s conversion into a ticketholder: Tribunal reasons at para. 293(b).
[122] In addition, the Tribunal found that the presence of a countdown clock on the floating ribbon suggests to the ordinary consumer that there is some degree of urgency or the necessity to proceed swiftly with the transaction, and that a customer who purchases tickets on the Cineplex website spends about three minutes in total on the site: Tribunal reasons at paras. 293(c) and (d). The speed at which the transactions proceed is enhanced by the relatively small amount of money involved in purchasing theatre tickets: Tribunal reasons at para. 293(e).
[123] Finally, the Tribunal found that Cineplex has made it difficult for consumers to find or process information about the Online Booking Fee on its website and app. That is, the website and app were specifically designed to "“shroud”" or obfuscate information with respect the Online Booking Fee by placing that information "“below the fold”", where the customer would be unlikely to see it: Tribunal reasons at paras. 170, 406.
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[129] The Tribunal made extensive factual findings with respect to the design and operation of the Cineplex website and app that justified its conclusion that information appearing "“below the fold”" was hidden from consumers. This was the product of features that were deliberately designed by Cineplex to funnel consumers quickly towards the completion of the ticket purchase. These factual findings provided a clear and logical basis for the Tribunal’s conclusion that for the purposes of the general impression analysis, the four corners of "“the representation”" should be confined to the pricing representations appearing on the Tickets Page above the fold and without scrolling, and that the earlier jurisprudence dealing with print media (and the importance of the entire representation) was not applicable in modern dynamic digital environments.
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[131] The legal test for the literal meaning of a representation is uncontroversial. The Tribunal must look at what is said and interpret the words in their ordinary sense: Tribunal reasons at para. 242, citing Richard, above at para. 47. . Cineplex Inc. v. Commissioner of Competition [interpretation]
In Cineplex Inc. v. Commissioner of Competition (Fed CA, 2026) the Federal Court of Appeal dismissed a Competition Act appeal, here brought against a Competition Tribunal finding that the appellant had "engaged in reviewable conduct by making pricing representations to the public that were false or misleading in a material respect" [CA ] - and issued a cease order, an administrative fine and costs.
The court considered how to interpret the term 'deceptive advertising', here in the context of a film advertising representation where the appellant argued that their consumers could be expected to be sophisticated wrt internet advertising:A. The Characteristics of the Consumer to Whom the Representation was Directed
[30] The Tribunal noted the Commissioner’s submission that the attributes of a consumer looking at an advertisement are a fundamental issue in any misrepresentation case: Tribunal reasons at para. 245.
[31] The Tribunal thus spent considerable time discussing the characteristics of the consumer to whom Cineplex’s representations were directed. It concluded that it should not adopt the "“credulous and inexperienced”" consumer standard espoused in Richard v. Time Inc., 2012 SCC 8 (a case brought under provincial consumer protection legislation) as the legal standard to be used for the general impression test under section 74.01 and subsection 74.03(5) of the Competition Act. In coming to this conclusion, the Tribunal held that the legal standard should be appropriate in light of the objectives of the Competition Act and the purposes of the deceptive marketing provisions in it: Tribunal reasons at para. 278.
[32] This led the Tribunal to conclude that "“[t]he legal perspective for the general impression test should remain that of the ordinary consumer of the product or service, which may be refined according to the nature of the representation at issue, the characteristics of the members of the public to whom the representation was made, directed or targeted, the nature of the product or service involved, and the particular circumstances of the case”": Tribunal reasons at para. 278.
[33] While the characteristics of the consumer to whom the representation was directed was a matter of some debate before the Tribunal, the issue was narrowed significantly before us, with Cineplex’s submissions focusing primarily on whether the average consumer would be tech-savvy enough to know that they should scroll to the bottom of the page to see additional pricing information.
[34] Cineplex notes that in addressing the attributes, characteristics and skill level of consumers using its website and app, the Tribunal referred to past cases which had described the "“ordinary citizen”" as "“possessing the ordinary reason and intelligence and common sense that such a cross-section of the public would inevitably reveal...”": Tribunal reasons at para. 251, citing Sears Canada, above at paras. 325-327; Commissioner of Competition v. Gestion Lebski inc., 2006 Comp. Trib. 32 at paras. 153, 191.
[35] Cineplex submits that in the modern digital environment, the "“ordinary citizen”" ought to be understood as having some experience with the internet, and to understand the concept of scrolling through a website or app. This is particularly true, Cineplex says, for the consumers in this case, as customers will have had to navigate several webpages on the cineplex.com website prior to arriving at the tickets page, and that these earlier webpages would require some optional scrolling, for example, to identify and select the preferred movie title and theatre location.
[36] Cineplex contends that its argument does not offend the principle described in the case law of the ordinary citizen "“lacking any relevant expertise”". While acknowledging that the ordinary citizen may not have expertise in e-commerce, Cineplex submits that treating the ordinary citizen as having no experience at all in navigating websites or apps is inappropriate in the Competition Act context. According to Cineplex, the Tribunal’s failure to ascribe some basic understanding of websites and apps to the ordinary citizen (specifically including knowledge of and familiarity with the scrolling function), led it to err in its consideration of the general impression created by its website and app.
[37] I am not persuaded that the Tribunal erred in this regard. As I read the Tribunal’s decision, and as will be further explained in the next section of these reasons, its concern was not that the ordinary consumer would not know how to scroll through a website or app. Rather, the Tribunal found as a fact that the design of Cineplex’s digital platforms was such that there would be no obvious reason or incentive for the consumer to scroll down beyond the pricing information that would initially appear on the consumer’s screen displaying the ticket prices (identified by the Tribunal at para. 296 as "“Tickets Page A”"). . Palmer v. Teva Canada Limited
In Palmer v. Teva Canada Limited (Ont CA, 2024) the Ontario Court of Appeal dismissed an appeal against a lower court dismissal of a class action certification motion.
In a class action for contaminated drugs, the court considered a claim under s.52(1) ['False or misleading representations - Representations accompanying products'] of the Competition Act:(5) Claim under the Competition Act
[94] The appellants plead that the respondents contravened s. 52(1) of the Competition Act by knowingly or recklessly making representations as to the quality of their pharmaceutical products that were false or misleading in a material respect. Subsection 36(1) of the Competition Act creates a civil cause of action for a person who has suffered loss or damages as a result of conduct contrary to s. 52(1).
[95] Section 52 requires that there be a “representation.” This court has previously held that failure to disclose a non-dangerous defect cannot constitute a “representation”: Arora v. Whirlpool Canada LP, 2013 ONCA 657, 118 O.R. (3d) 113, at paras. 50-51 citing Williams v. Canon Canada Inc., 2011 ONSC 6571, at para. 227, aff’d on other grounds, 2012 ONSC 3692 (Div. Ct.). The object of s. 52(1) is to target deceptive marketing practices, not create liability for defective products.
[96] The motion judge did not err in finding that none of the pleaded misrepresentations are capable of sustaining a cause of action as a breach of s. 52(1) of the Competition Act. . Rebuck v. Ford Motor Company
In Rebuck v. Ford Motor Company (Ont CA, 2023) the Court of Appeal heard a class action appeal (on substantive issues, it was already certified), involving the federal EnerGuide fuel consumption program. The issues were consumer protection 'misrepresentation' ones, from the federal Competition Act, the Ontario Consumer Protection Act and similar other provincial statutes.
On the s.52 Competition Act false and misleading representations issue the court concluded:[15] On the first common issue, the appellant submits that the motion judge erred in his interpretation and application of s. 52 of the Competition Act by failing to hold that the representations made to the public by Ford on the EnerGuide label and in its marketing materials were knowingly false or misleading by understating the vehicles’ actual fuel consumption by an average of 15%.
[16] We do not accept this submission.
[17] Sections 52(1), 52(1.1)(a) and 52(4) of the Competition Act provide as follows:(1) No person shall, for the purpose of promoting, directly or indirectly, the supply or use of a product or for the purpose of promoting, directly or indirectly, any business interest, by any means whatever, knowingly or recklessly make a representation to the public that is false or misleading in a material respect.
(1.1) For greater certainty, in establishing that subsection (1) was contravened, it is not necessary to prove that
(a) any person was deceived or misled;
...
(4) In a prosecution for a contravention of this section, the general impression conveyed by a representation as well as its literal meaning shall be taken into account in determining whether or not the representation is false or misleading in a material respect. [18] It must be remembered that a person who contravenes s. 52(1) of the Competition Act is guilty of an offence. The information Ford provided on its EnerGuide labels and in its marketing materials complied with NRCan’s mandatory directions and guidelines. The motion judge found that the signatories to the MOU, including Ford Canada, reasonably believed that NRCan’s directives and guidelines were mandatory. By affixing its EnerGuide labels containing the information set out above and repeating that information in its marketing materials, Ford was carefully complying with the MOU and the Guidelines, not, as the appellant asserts, “knowingly or recklessly” making a representation to the public that is false or misleading in a material respect. As the motion judge recognized, it is hard to believe that the federal government intended to criminalize or otherwise impugn its own EnerGuide labels.
[19] It is true that by 2014 the picture was changing. The United States had adopted the 5-Cycle Test and it was widely acknowledged to better approximate real- world driving conditions than the 2-Cycle Test.
[20] However, that does not mean that Ford was obliged to shift to the 5-Cycle Test in Canada. As we have stated, the Guidelines required the use of the 2-Cycle Test, and did not permit the use of U.S. data based on the 5-Cycle Test. Ford complied with the MOU and the Guidelines. The fact that the United States – or Brazil, Luxembourg or any other country – might have had different, even better, guidelines is irrelevant.
[21] As to whether the representations were false or misleading, the appellant does not assert that, literally, the statements and representations set out on the EnerGuide label or the marketing materials were false or misleading in any respect. Moreover, before the motion judge, the appellant retracted the suggestion that the general impression conveyed by the EnerGuide label to the average car-buyer was that they would achieve a level of fuel consumption equal to the ratings set out on the label. Rather, class counsel argued that the label conveyed the general impression that the city and highway mpg ratings were intended and understood as median ratings and that every driver would have an equal chance of achieving fuel consumption that was above or below these medians. The motion judge rejected this argument. Contrary to the appellant’s submission on appeal, the motion judge applied an objective test, considering “the general impression conveyed by the EnerGuide Label to the average car-buyer”. He did not impermissibly stray into a subjective analysis or require proof, contrary to s. 52(1.1), that anyone was deceived or misled simply by noting that the appellant’s evidence undermined the general impression argued by his counsel.
[22] The appellant reframes his argument on appeal, submitting that the general impression conveyed is that the estimates predicted the vehicles’ actual fuel consumption, subject to reasonable variance, and, as a result, Ford understated the vehicles’ actual fuel consumption by an average of 15%. This is merely a version of the alleged “actual mileage” general impression abandoned at the hearing before the motion judge. We are not persuaded that the EnerGuide label and the marketing materials convey this general impression to the average car-buyer.
[23] As noted above, the motion judge referred to the average car-buyer. The appellant argues that the correct test required the motion judge, and requires this court, to consider the general impression that the representation is likely to convey to a credulous and inexperienced consumer: Richard v. Time Inc., 2012 SCC 8, [2012] 1 S.C.R. 265, at para. 78.
[24] The Supreme Court of Canada in Richard considered Quebec’s Consumer Protection Act, C.Q.L.R. c. P-40.1. The Court held that the words “credulous and inexperienced” described the average consumer for the purposes of that Act. However, the Court acknowledged that “the adjectives used to describe the average consumer may vary from one statute to another” to reflect the “diversity of economic realities to which different statutes apply and of their objectives”: Richard, at para. 68. The intention of Quebec’s Consumer Protection Act is “to protect vulnerable persons from the dangers of certain advertising techniques”: Richard, at para. 72.
[25] Section 1.1 of the Competition Act describes its purpose, in relation to consumers, as “to maintain and encourage competition in Canada…in order to provide consumers with competitive prices and product choices.” Further, as noted above, a person who contravenes s. 52(1) of the Competition Act is guilty of an offence.
[26] This court has not previously considered whether the “credulous and inexperienced” consumer standard articulated in Richard applies to the Competition Act. Even if it did (and we do not determine that issue[2]), we are not persuaded that the general impression that the EnerGuide label was likely to convey to a credulous and inexperienced consumer purchasing or leasing a Ford vehicle is what the appellant alleged below or on appeal. The word “credulous” does “not suggest that the average consumer is incapable of understanding the literal meaning of the words used in an advertisement if the general layout of the advertisement does not render those words unintelligible”: Richard, at para. 72.
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