SEARS MISREPRESENTED EXTENT OF SAVINGS IN TIRE ADVERTISEMENTS DISTRIBUTED TO MILLIONS OF CANADIANS OTTAWA, January 24, 2005 -- Canadian consumers will benefit from today's Competition Tribunal ruling which found that Sears Canada Inc. violated the Competition Act by exaggerating the possible savings to consumers across Canada when it advertised tires on sale. The Competition Bureau is confident that this landmark decision sends a loud signal to the business community that bogus bargain price claims mislead consumers and harm retailers who comply with the law. Sears admitted that it sold less than two per cent of the tires at the full regular price before they were advertised on sale. The Tribunal found that Sears could not have truly believed that its regular tire prices were genuine and bona fide prices that the market would validate. The Competition Act contains provisions aimed at protecting consumers from being misled by reference to "inflated" regular prices when products are promoted at sale prices. The decision came after a lengthy hearing before the Tribunal, which was initiated by the Competition Bureau in 2002. This landmark decision is the first to be handed down by the Tribunal under the ordinary selling price provisions of the Competition Act. In its ruling, the Tribunal found that Sears had not sold a substantial volume of the tires at the regular prices featured in the advertisements, and had not offered the tires in good faith at those prices. "This decision represents an important milestone in the Competition Bureau's efforts to ensure that consumers get honest and accurate pricing information from retailers," said Sheridan Scott, Commissioner of Competition. "Canadian consumers should expect nothing less than truth in advertising, when deciding where to spend their hard earned money." In addition, the Tribunal upheld the constitutionality of the relevant provision of the Competition Act under the Canadian Charter of Rights and Freedoms. In upholding the provision, the Tribunal accepted that false or misleading ordinary selling price claims can harm consumers, business competitors and competition in general. The Competition Bureau is an independent law enforcement agency that promotes and maintains fair competition so that all Canadians can benefit from competitive prices, product choice and quality service. It oversees the application of the Competition Act, the Consumer Packaging and Labelling Act, the Textile Labelling Act and the Precious Metals Marking Act. To review the Competition Tribunal's decision, please visit their Web site at http://www.ct-tc.gc.ca - 30 - For media enquiries, please contact: Maureen McGrath Senior Communications Advisor Communications Branch (819) 953-8982, or (613) 296-2187 (cell) For general enquiries, please contact: Information Centre Competition Bureau (819) 997-4282 1-800-348-5358
