The Competition Bureau of Canada has filed a legal suit against Rogers Communications Inc. (TSX: RCI.B), alleging that the company’s marketing of its “Infinite” wireless plans misleads consumers by falsely advertising unlimited data. The Bureau asserts that Rogers’ plans impose data caps and significantly reduce speeds once those caps are exceeded, contradicting the “unlimited” claim.
In a statement released yesterday, the Competition Bureau accused Rogers of breaching the Competition Act by making “false or misleading claims” in its advertising for the Infinite wireless plans. According to the Bureau, while the plans are marketed as offering unlimited data, they include throttling provisions that reduce data speeds by over 99% once users reach their data limits. This practice effectively curtails customers’ ability to use data-intensive services, rendering the “unlimited” descriptor inaccurate.
“Canadians need accurate and truthful information when purchasing goods and services, especially essential services like wireless data plans,” said Matthew Boswell, Canada’s Commissioner of Competition. “This case demonstrates that the Bureau remains committed to ensuring that Canadian consumers are not misled.”
The Bureau is seeking several remedies, including an end to the advertising campaign, financial penalties, and restitution for affected consumers. Two court orders have already been issued, enabling investigators to gather additional evidence on Rogers’ marketing practices.
This lawsuit is not the first time Canada’s telecom industry has faced allegations of misleading advertising. In 2016, the Competition Bureau took enforcement action against Comwave for similarly advertising capped internet and phone services as “unlimited.” In 2017, the Bureau issued specific guidelines to telecommunications companies, warning against the misuse of terms like “unlimited” in marketing materials.
Despite these efforts, consumer complaints have persisted. Rogers received more complaints than any other telecom provider in 2023, with billing inaccuracies, contract disputes, and unresolved credit issues dominating grievances, according to a report by the Commission for Complaints for Telecom-television Services.
The lawsuit comes amid broader concerns over competition within Canada’s telecom market, dominated by three major players: Rogers, Bell (TSX: BCE), and Telus (TSX: T). Critics argue that this oligopoly stifles competition and drives up prices for consumers.
A recent complaint by Quebecor, parent company of Freedom Mobile, challenges a partnership between Loblaw (TSX: L), Rogers, and Bell for potentially anti-competitive practices. This deal, granting Rogers and Bell exclusive rights to sell mobile products in 180 Loblaw-owned grocery stores, is under investigation by the Competition Bureau.
“Loblaws isn’t content just ripping off Canadians when it comes to their groceries,” said NDP Leader Jagmeet Singh earlier this year. “Now Loblaws is teaming up with Rogers and Bell to rip off Canadians with their cellphone prices.”
Adding to Rogers’ challenges, Corus Entertainment Inc. (TSX: CJR.B), controlled by the Shaw family, recently filed a complaint with the Canadian Radio-television and Telecommunications Commission, alleging predatory practices. This follows Rogers’ $20 billion acquisition of Shaw Communications in 2023, a merger that has further consolidated its market power.
The Shaw family, significant shareholders in Rogers, finds itself in a paradoxical position. While the sale of Shaw Communications enriched the family, their remaining media asset, Corus, has suffered, with its market value plummeting to $31 million. Rogers has been accused of undercutting Corus’ Disney-themed channels through its Disney+ partnership, a move Corus claims is part of a broader strategy to eliminate competition in Canadian media.
Rogers has dismissed these accusations, stating that Corus failed to adapt to shifting consumer preferences. “Sadly, Corus has not kept up with the demands of Canadians and is now looking for the regulator to protect their broken business model,” a Rogers spokesperson said.
The Competition Bureau’s lawsuit against Rogers is likely to serve as a litmus test for the enforcement of consumer protection laws in Canada’s telecom sector. If successful, the case could set a precedent for stricter regulatory oversight and greater accountability among industry giants.
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