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Friday, Sep 14, 2012 5:30 PM UTC

Canada’s Competition Bureau sues 3 wireless giants

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Topics: From the Wires,

TORONTO (AP) — The Canadian Competition Bureau said Friday that it is suing the country’s three biggest wireless carriers and an industry association for US$31.79 million (CA$31 million) in customer refunds over advertising of texting services.

The federal agency said it is seeking US$10.25 million (CA$10 million) each from Telus Corp., Rogers Communications Inc., and Bell Canada.

The bureau said the lawsuit includes administrative penalties for allegedly misleading advertising of premium texting services that often involve hidden fees.

The agency said it also seeking US$1.3 million (CA$1 million) from the Canadian Wireless Telecommunications Association, the industry’s main lobby group.

The Canadian telecom market is currently dominated by the big three companies that control 95 percent of the market.

Small Canadian telecom outfits have struggled against the larger market players and the lack of competition has meant that Canada has some of the highest cell phone rates in the world.

An investigation by the bureau concluded that Bell, Rogers and Telus, in conjunction with the association, facilitated the sale of premium-rate digital content such as trivia questions and ringtones for fees that had not been adequately disclosed, misleading customers into believing this content was free. The agency said the telecom companies pocketed a share of the revenues.

The premium-rate digital content in question can cost up to US$10.25 (CA$10) per transaction, and up to US$41.01 (CA$40) for a monthly subscription, rates over and above standard text messaging plans.

“Unfortunately, in far too many cases, consumers only became aware of unexpected and unauthorized charges on their mobile phone bills,” said Melanie Aitken, Commissioner of Competition.

Bell, Rogers and Telus did not immediately respond to calls for comment.

The legal proceedings are before the Ontario Superior Court of Justice under the misleading advertising provisions of the Competition Act.

More Charmaine Noronha.

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