A pedestrian is reflected in the window of a Telus store while using a mobile phone in Ottawa February 11, 2011.© Chris Wattie / Reuters/Reuters
Telus Corp. is suing wireless new entrant Mobilicity for what it alleges are "false and misleading" claims made in a new television advertisement.
Vancouver-based Telus, which filed its notice of civil claim with the Supreme Court of British Columbia, is seeking an injunction to block Mobilicity from running the TV spot, which began airing across Canada in late November. According to court documents, Telus claims the ad in question has been broadcast "extensively in British Columbia," which is Telus's home market.
The lawsuit, which comes during the height of the pivotal holiday shopping season, signifies how competitive wireless carriers have become in the smartphone era. Although Mobilicity's ads do not specifically name Telus or any other wireless competitor, Telus claims the spot contains a trio of "misrepresentations" that damage its brand.
In particular, Telus is taking issue with the commercial's claim that "what you see isn't always what you get" with other wireless networks with respect to unlimited offers.
Moreover, Telus alleges that Mobilicity claims to offer wireless services with "no contracts" even though its services are governed by service terms and conditions. The lawsuit also alleges that Mobilicity makes a "false" claim of offering unlimited data – even though its data plans are subject to a fair use policy that authorizes the carrier to use throttling to slow down the data speeds of heavy users.
Telus, which filed its lawsuit on Dec. 7, is arguing in court documents that Mobilicity is in breach of the Competition Act. None of the the allegations has been proven in court.
"December is the busiest month of the year for consumer sales in the wireless service communication market, and competition for wireless service customers is extremely competitive during this time," Telus says in court filings.
"Further, December is near the end of the fiscal year for many wireless service providers, including Telus, meaning that year-end filings and share value are affected by performance during this time. Accordingly, advertising related to wireless communication services is extremely important during December for the wireless telecommunications industry in Canada."
A hearing to consider Telus's application for an injunction will be held on Friday morning in Vancouver. Telus, which is Canada's third-largest wireless carrier, wants Mobilicity to stop airing the TV spot and to pull any other advertising materials containing those marketing claims. It is also seeking unspecified costs and "other relief" as determined by the court.
"The ads damage Telus's brand with false claims and must be pulled from circulation immediately," said Telus spokesman Shawn Hall.
Mobilicity, which is legally known as Data & Audio-Visual Enterprises Wireless Inc., disputes Telus's allegations and plans to defend itself, said president and chief operating officer Stewart Lyons.
"Telus is trying to get us to pull our ads. They are trying to intimidate us," Mr. Lyons said. "They are using high-priced lawyers to compete when they don't feel like competing out on the street."
The lawsuit also comes at a time when the federal telecom regulator is planning to create a new wireless code of conduct to clarify contract language and terms. The Commissioner for Complaints for Telecommunications Services has also been vocal recently about informing consumers about the fine print of so-called unlimited service plans.
Rita Trichur