Industry pleased with new Competition Bureau guidelines on Internet advertising

The Canadian Association of Internet Providers (CAIP) is applauding new guidelines on online advertising published by the Competition Bureau that appear to leave the association’s members off the hook for misrepresentative claims made by others. The final guidelines represent a reversal in policy from a May 2001 draft of the guidelines that would have opened Internet service providers (ISPs) to liability if they hosted misleading advertisements from non-Canadian sources (CNM, June 14/01 and Sept. 6/01). Draft guidelines circulated for comment almost two years ago explicitly identified ISPs as analogous to print publishers – newspapers and others that carry advertisements. Under Canadian guidelines, a newspaper or magazine that accepts advertising from non-Canadian sources shoulders a greater burden to verify the contents of the advertising, unlike ads from Canadian sources, for which publishers enjoy an exemption as mere carriers of the information. The draft guidelines provoked considerable opposition at the time from CAIP, the Internet Advertising Bureau of Canada (IAB Canada), Bell Canada and others. Submissions in the fall of 2001 went to great pains to educate Competition Bureau officials about the Internet’s workings and to point out what they considered the folly of linking ISPs and publishers under the proposed guidelines. Wrote CAIP: "The Bureau needs to be absolutely clear that, in the absence of any feasible editorial control, ISPs are not publishers. They cannot technically, feasibly or constitutionally review terabits of data flowing through their routers. There is no room for equivocation on this. The bureau must understand that, in the absence of editorial control, ISPs are not publishers or other parties subject to the Act as regards false or misleading representations." At the time, bureau officials told Canadian NEW MEDIA that the guidelines were unlikely to be contentious, and credible sources have suggested that the agency may have been left with egg on its face over unexpected opposition. To the bureau’s credit, however, the final guidelines, published in an information bulletin on February 18, specifically preclude ISPs from being the main focus of enforcement actions. The document lists several illustrative scenarios for how provisions of the Competition Act would be applied, including one in which consumers receive misleading information from a company’s web site hosted by a third-party ISP. In this case, writes the bureau: "The manufacturer has control over the content of the web site. The consumer’s Internet service provider has no control over the content on the manufacturer’s web site. The manufacturer’s web host would not typically screen content before it is posted to the site and thus would not likely be the focus of the Bureau’s investigation. In this situation the manufacturer would be the focus of any investigation by the Bureau." To hammer home its point, the bureau continues: "The bureau will focus its enforcement efforts primarily on businesses which are responsible for content or have a degree of control over that content, rather than on businesses operating as a conduit, that is, a disseminator or distributor of the content." The new guidelines aren’t ironclad and don’t guarantee ISPs won’t be found to have some control over the content they host, but the new rules are more than enough for CAIP president Jay Thomson. "I think it’s fair to say that we’re pleased with the new approach that they’ve adopted, which differs substantially from the draft that they had issued a while ago," he tells Canadian NEW MEDIA. "We think that they’ve responded to a number of the concerns that were raised about, particularly, the role of ISPs and web hosting companies. They’ve made a clear statement that they will not pursue the intermediary, that they will focus their enforcement efforts on the content provider." While the guidelines actually say that the bureau wouldn’t focus primarily on ISPs, they make no guarantee that ISPs still couldn’t be found liable in some instances, especially since language that links ISPs to publishers remains, albeit in softer language. Thomson isn’t concerned. "This is the government and they’re never going to say anything that limits everything that they might want to do. It’s probably the best we could have hoped for."

Industry pleased with new Competition Bureau guidelines on Internet advertising

Broadcast | March 6, 2003

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