We live in a world full of advertisements. Our every day life is surrounded by advertisements, whether it be on social media or on a billboard. In Canada, there are misleading, prohibited and controlled advertising.
What is a Misleading Advertisement?
The elements used to consider whether an advertisement is misleading includes:
How was the advertisement presented? Was it posted online, or printed?
Was the advertisement made public?
Did the advertisement promote a product or business/business interest?
Was the advertisement misleading or false? That being, the information being advertised was false.
Is the material on the advertisement false? such as the pricing or performance claims.
What about advertisements that are comparative?
These types of comparative advertisements are permitted as long as the advertisement is not misleading or infringes another party's intellectual property rights. If you are going to use a third party trademark or copyright it is crucial that measures are taken to ensure compliance with Canada’s Trademarks Act.
The Canadian Code of Advertising Standards and Guidelines for the Use of Comparative advertising
Provision 6 of the Advertising Code is dedicated to comparative advertising. It states that “advertisements must not unfairly discredit, disparage or attack one or more products, or exaggerate the nature or importance of competitive differences.” This provision requires you to compare with care. If you only talk trash about your competitor, then not only will you be breaching the ASC code, you may also be liable for trade libel.
Alongside the code, the ASC have created a set of guidelines to further elaborate on what is acceptable in regards to comparative advertising. The guidelines state that the “comparison must be a fair and factual comparison of similar properties, features or ingredients and must not create an unsupportable negative impression of the compared to product.”
Comparative advertising is a creative way to attract new consumers. The relevant laws and Guidelines do not limit your ability to utilize this technique, the legal hurdles are surmountable. The only requirement is that you play and compare fairly. If you follow this, then your advertisement will be successful.
Types of Advertising that is Controlled or Prohibited
Email marketing is regulated in Canada. When we discuss the laws surrounding digital marketing campaigns, Canada’s Anti Spam Legislation (“CASL”) is the regulation that governs this.
Any advertising promoting credit, financing or lease products must comply with provincial consumer protection legislation, which prescribes disclosure requirements, which is regulated by the The Bank Act.
Health Canada has jurisdiction over drugs, natural health products and medical devices, and regulates advertising for such products under the Food and Drugs Act.
Prescription drug advertising to the general public may only state the name, price and quantity of a drug, and may not state or imply its therapeutic benefit. This has become heavily regulated during the recent global pandemic as there has been an increase of advertisements that may be misleading by promoting or advertising a medication that could cure or treat COVID-19.
Advertising for tobacco products is restricted under the Tobacco Act.
There are no additional restrictions on indirect marketing and advertising, however corporate event sponsorships are an excellent and strategic way in which to promote and advertise a company’s brand to a diverse and wide audience and prospective consumer base. On a global scale, some of the largest entertainment, fashion and sports events that promote or advertise such events or brands must comply with advertising regulations accordingly.
As with any business undertaking, the parameters of the business relationship should be codified in a legal agreement – in this case, a sponsorship agreement. If your brand would benefit from sponsoring or being sponsored, feel free to reach out to Froese Law.