Competition Bureau settles misleading advertising case against car rental companies | iNFOnews | Thompson-Okanagan's News Source

Current Conditions


Competition Bureau settles misleading advertising case against car rental companies

June 02, 2016 - 12:55 PM

OTTAWA - The Competition Bureau has settled a misleading advertising case against the Avis and Budget rental car companies but came away with much less than originally sought when its allegations were announced early last year.

The companies have agreed to pay $3.25 million in administrative penalties and costs, rather than the $30 million that the bureau originally sought, and establish internal education and monitoring programs that run for 10 years, the bureau announced Thursday.

The figure includes a $3 million administrative penalty and $250,000 for costs incurred by the competition commissioner during the investigation.

Avis and Budget have also agreed to implement a program that ensures senior managers and other personnel comply with provisions of the Competition Act that prevent deceptive marketing claims. They have also agreed to notify the bureau if they become aware of any future breach of the act for the next 10 years.

But the settlement doesn't contain any admission of wrongdoing by the companies or include compensation to former and current customers — two of the bureau's early goals.

Avis Canada and Budget Canada issued a joint email response later Thursday in which they said they don't believe or admit that their pricing and marketing practices misled their customers.

"Nonetheless, in order to avoid the cost and disruption to the business that the continuation of litigation would entail, the companies have agreed to pay C$3.25 million to the Canadian government to resolve the case and to adopt a competition law compliance program," they said.

Competition commissioner John Pecman said in a statement that he's confident that the case will deter false and misleading advertising.

The Ottawa-based federal agency had accused the two related companies in a March 2015 filing of misleading consumers by advertising prices that excluded unavoidable expenses, such as taxes, surcharges and fees.

The companies said in their response that pricing rental cars by advertising a base rate and then adding "recovery fees" has been used by most major car rental companies in Canada for at least the past 15 years.

"Avis Canada and Budget Canada have communicated to the commissioner that they expect that other car rental companies operating in Canada will have to play by the same rules," they added.

Note to readers: This is a corrected story. A previous version said the Competition Bureau originally sought $10 million in total penalties.

News from © The Canadian Press, 2016
The Canadian Press

  • Popular kelowna News
View Site in: Desktop | Mobile