Michaels to pay $3.5 M penalty to settle frames and custom framing services price advertising case

OTTAWA, May 6, 2015 /CNW/ - Michaels of Canada, ULC has agreed to pay a $3.5 million administrative monetary penalty and to establish a corporate compliance program following a Competition Bureau investigation into price advertising for custom and select ready-made framing.

The Bureau concluded that Michaels did not ensure that the frames were offered for sale in good faith prior to promoting them at substantial discounts. The Competition Act contains provisions that ensure that when advertisers promote products at sale prices, consumers are not enticed by reference to inflated regular prices.

The matter has been resolved by way of a 10-year consent agreement filed today with the Competition Tribunal.

Michaels has agreed to ensure that its price claims for all products will comply with the ordinary selling price provisions of the Act.

Quick Facts

• Michaels has fully cooperated with the Bureau's investigation.
• The Bureau's investigation covered the period of January 2011 to December 2014 for custom framing services, and January 2013 to December 2014 for select ready-made frames.

Quotes

"I am pleased that Michaels has worked collaboratively with the Bureau in order to resolve these issues in a timely fashion.  Michaels has demonstrated a strong commitment to ensuring that it has robust compliance procedures in place to promote compliance with the Act going forward for all the products that it offers to Canadians."

Matthew Boswell,
Senior Deputy Commissioner, Cartels and Deceptive Marketing Practices Branch

"Consumers win when retailers offer aggressive discounts, but savings claims must be substantiated. When comparisons are made between regular and sale prices, consumers respond to the implied savings. As such, it is important that businesses make accurate and truthful claims when advertising the price of a product."

Stéphane Lamoureux
Deputy Commissioner, Deceptive Marketing Practices Directorate

Related Information
Price-related Representations under the Competition Act 
Ordinary Price Claims Enforcement Guidelines

Associated Links
The consent agreement is available on the Competition Tribunal's website

www.competitionbureau.gc.ca 
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The Competition Bureau, as an independent law enforcement agency, ensures that Canadian businesses and consumers prosper in a competitive and innovative marketplace.

 

SOURCE Competition Bureau

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