CWTA Seeks Competition Bureau’s Cooperation to Protect Consumers

Association Rejects Bureau’s Recent Allegations

OTTAWA – September 14, 2012 – The Canadian Wireless Telecommunications Association (CWTA) today offered the following statement regarding recent actions by the Competition Bureau regarding Common Short Codes. The Bureau’s actions could disrupt the text message services, such as severe weather alerts, charitable donations, flight status updates or sports scores, on which millions of Canadian consumers depend. And equally as alarming, the Bureau’s demands could significantly slow down – or even reverse – the deployment of e-commerce in Canada.

“It is most unfortunate that the Competition Bureau’s actions could potentially impact the ability of Canadian consumers to access the text messaging services they have come to enjoy and rely on,” said CWTA President & CEO Bernard Lord. “CWTA and our members will do everything we can to ensure our customers can continue to choose to access these services.”

Every day, Canadians enjoy the convenience of text messaging services using Common Short Codes, with more than 700 such services in market at any time. These include charitable giving, news alerts, voting on popular television shows, weather updates, real estate services, public transit schedules, entertainment, contests, airline schedules, sports highlights, mobile content, personal banking, marketing, social network updates and parking payments, to name just a few.

Wireless carriers do not make or control the text messaging services, but instead they only manage the billing for the third-party creators and operators. There are strict standards governing how consumers register for Common Short Code services, and CWTA and the providers have proactively put in place a set of detailed requirements, including how third parties can advertise these services.

CWTA and wireless service providers believe it is essential that consumers be provided with clear and concise information before opting-in to text messaging services, as well as how to deal with unwanted messages. For this reason, CWTA implemented a requirement that third-party creators and aggregators of these services obtain consent from each customer in accordance with a double opt-in process before commencing service.

CWTA reached out to the Bureau last year seeking guidance about what possible remedies exist under the Competition Act for non-compliant advertising by companies utilizing Common Short Codes, and to offer any assistance CWTA could provide the Bureau in pursuit of such remedies.

It was CWTA’s expectation that the Competition Bureau would welcome this proactive and collaborative approach to protecting consumers from misleading advertisers. While wireless carriers do not have the legal authority to collectively deal with companies that use misleading advertising, the Competition Bureau, as an enforcement body, does have that power if it chooses to exercise it.

We were therefore extremely disappointed to receive an ultimatum to either enter into a specific settlement agreement or face immediate litigation. When we sought instead to engage in productive dialogue with the Bureau, their response was to proceed with litigation. The unreasonable approach of the Competition Bureau will only serve to slow progress on an issue for which CWTA had already requested the Bureau’s guidance.

The Competition Bureau is choosing to pursue a costly adversarial path that will ultimately yield no net benefit to consumers, while at the same time is refusing to pursue those advertisers who make the statements at issue and who are legally responsible for them. In fact, the Commissioner is trying to override Parliament by applying liability to the carriers and CWTA for the statements of others, where the law does not do so.

In addition, the Competition Bureau’s unprecedented demand that CWTA and the wireless carriers accept liability for third-party advertisers could impede innovation and growth in e-commerce in Canada, which is in stark contrast to the Federal Government’s own focus on growing the digital economy.

For their part, wireless service providers will take all appropriate measures to maintain services and choices for Canadians. We are asking the Competition Bureau to focus its efforts on working with CWTA and the wireless service providers to implement reasonable and actionable solutions that will help them protect consumers from misleading advertisers.

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Canadian Wireless Telecommunications Association (CWTA)

CWTA is the authority on wireless issues, developments and trends in Canada. It represents cellular, PCS, messaging, mobile radio, fixed wireless and mobile satellite carriers as well as companies that develop and produce products and services for the industry. (www.cwta.ca)

Media information:

Marc Choma, CWTA
613-233-4888 ext. 207
mchoma@cwta.ca