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Bell to pay $10M for misleading ads

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Bell Canada (BCE-T) has agreed to pay a $10 million penalty after the Competition Bureau accused the company of misrepresenting the prices of its telecom services, partly through using fine print.

The bureau said Bell was advertising services with prices that were impossible to obtain because additional charges were inevitably tacked on. The hefty charge follows a $10-million hit the bureau dished out to Rogers Communications Inc. (RCI.B-T) in late 2010 for advertising that slammed Rogers' smaller competitors, arguing it was misleading. Rogers denies those charges, and the case has yet to be decided in court.

In a news release, Bell Canada said it “fundamentally disagrees” with the bureau's position, but has “decided to immediately resolve the issue and move forward” by paying the fee.

In this particular case, Bell has agreed to stop making such advertisements – which the bureau determined began appearing in December, 2007 – on its home phone, Internet, satellite TV and wireless services. The company has also agreed to pay the $10-million sum and another $100,000 to cover the bureau’s investigation, and modify all of its “non-compliant advertisements” in 60 days.

“I am pleased that Bell co-operated with the bureau's investigation and is taking steps to correct the misleading advertisements,” Melanie Aitken, Canada's Competition Commissioner said in a news release. “When a price is offered to consumers, it must be accurate. Including a fine-print disclaimer is no licence to advertise prices that are not available.”

In an interview Tuesday, Aitken said she hopes the substantial penalty will send a signal to all telecom companies, as well as advertisers beyond the sector, that the bureau will not tolerate hidden fees and misrepresentations to consumers.
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