Canadian consumers might want to want to bookmark dictionary.com on their iPhones after a ruling by a British Columbia Supreme Court judge in a case that calls into question the very definition of words like "reliable" and "best."
In a lawsuit brought against BCE's Bell Mobility by Rogers Communications Inc., Mr. Justice Austin Cullen yesterday issued a temporary injunction under the Competition Act forcing Bell Mobility to stop claiming it operates the "most reliable" wireless network.
However, the injunction allows the company to continue advertising that it has the "largest and fastest" as well as the "best and most powerful" network in the country.
Bell must begin to remove the bulk of its advertisements with the "most reliable" claim by Dec. 22, and have all such material out of the marketplace by Jan. 19, 2010. Company executives estimated less than 10 per cent of its current materials make the claim.
A full trial in the suit is expected next year.
The ruling is a blow to Rogers, which had requested a broad injunction to blunt Bell's advantage during the holiday selling season. A similar suit by Telus had already forced Rogers to rebrand itself from "Canada's most reliable network" to merely "Canada's reliable network."
The case may have implications that reach far beyond the telecom industry. "This highlights that companies have to be careful and cautious when making performance claims," said Steve Szentisi, a Vancouver-based competition lawyer. He noted that, with potential penalties for misleading advertising skyrocketing under new legislation to up to $10-million from a maximum of $200,000, "Some companies may begin to pay attention to what they didn't necessarily before."
The most recent legal action centred on a national ad campaign rolled out in early November trumpeting Bell's new high-speed network, which is built to the same technological standard as Rogers's two-year-old network. Both can run devices like Apple's 3G iPhone, a particular draw. Telus Corp., which shares the new network with Bell, is claiming that it offers the largest network in the country, with ads featuring coverage maps that directly take on Rogers.
Now, the definition of reliability appears to be up for grabs. Rogers argued before Judge Cullen that its two-year track record uniquely permitted it to claim reliability based on historical performance data, while Bell said its own definition of reliability focused on the number of dropped calls and call clarity.
While Bell acknowledged it has relatively few customers on its new network - making callers akin to drivers on a newly opened superhighway to which most people have not yet found the on-ramp - it said the lack of traffic was immaterial.
The judge disagreed, effectively ruling that no company can claim an advantage in reliability because the term implies a track record and Bell doesn't have one yet in this area. "We find that very strange, and we're reviewing our options," responded Wade Oosterman, president of Bell Mobility.
But while Rogers won in its bid to have Bell drop the reliability claim, it failed to persuade Judge Cullen its rival's other boasts were misleading. Rogers had argued in court documents that, "without any reasonable basis for comparison ... there is no basis for Bell" to claim it offered the "best" or "most powerful" network.
John Boynton, the chief marketing officer of Rogers Wireless, had told The Globe and Mail when the suit was filed that the claims were, "nonsensical, made-up words with no evidence or rationale" to back them up.
In an interview yesterday, Mr. Oosterman admitted Bell's specific claim of running the "most powerful network," was an agglomeration of a number of qualities and was not backed up by specific data. "It is true that in some cases people have different definition of words, so the more clear you can be the better it is. So we will be precise on a go-forward basis," he pledged.
Still, Bell responded to the ruling with a press release claiming it had won "4 out of 5 advertising claims in court." Fittingly for a case that hinges in part on the malleability of words, a Rogers spokesperson said Bell was "spinning" the results. "They lost on the most important aspect, which is reliability," said Odette Coleman.
The suit is only the latest legal action in the hotly contested wireless sector, which got even more heated yesterday with the debut of Wind Mobile, a foreign-owned provider that was given permission to operate only last Friday after the federal cabinet overruled the Canadian Radio-television and Telecommunications Commission.
In the middle of November, Telus Corp. launched a suit in the B.C. Supreme Court demanding Rogers Wireless drop its claim of operating the most reliable network. After weeks of legal tussling, Rogers backed off the claim, taking an estimated $3-million hit for the costs of ads it had produced but was forced to remove from the market. It then launched the suit against Bell.