(Toronto) Court documents offer insight into what sparked the Competition Bureau’s investigation into two of Canada’s largest furniture retailers.
Posted at 11:27 a.m.
Updated at 3:31 p.m.
Tara Deschamps
The Canadian Press
The watchdog obtained a court order last week requiring Meubles Léon and its subsidiary Entrepôt The Brick to turn over documents that will help determine whether the companies engaged in deceptive marketing practices.
The affidavit that obtained this court order shows that the Bureau began a preliminary investigation into Leon and The Brick in July 2023, when a team scoured websites and flyers belonging to the companies, visited their stores and consulted provincial and federal government sources and Canadian business registers.
The team’s objective was to examine the pricing and promotions of certain products, says the Oct. 31 statement from Paula Carr, a senior competition law officer with the Bureau, filed in Federal Court in Ottawa.
One of the items the Bureau focused on in late September 2023 was an LG smart electric stove with an air fryer.
On March 30, 2024, Mme Carr says the Bureau saw that the range was on sale for $1,595 on The Brick’s website.
When it looks at the previous six months, the Bureau finds that the range was offered at a promotional price – often marked in red – for 169 days, but never at a regular price.
In the affidavit, Mr.me Carr said she concluded from this data that communications indicating the product was on sale or offered at a discounted price were “likely false or misleading.”
When asked for a comment on the documents filed to obtain its court order, the Bureau referred The Canadian Press to its November 20 statement, in which it indicated that it had not yet concluded that there was wrongdoing .
Leon and The Brick also referenced last week’s statement, in which both retailers said they were committed to complying with all regulatory requirements and cooperating with the Bureau’s investigation. They called the court order “standard procedure for all investigations of this nature.”
“False emergency signs”
L’affidavit de Mme Carr shows that the Bureau also spent time reviewing cases where Leon and The Brick advertise that their promotions are “limited time” or indicate a sale end date.
The watchdog found that sometimes these promotions “continued after the stated sale end date, but with the clock icon and sale end date removed.”
In other cases, says Mme Carr, “one promotion immediately follows another without returning to a regular price; the promotional price changes to a higher or lower price.”
In the case of an LG stainless steel refrigerator offered by Léon, the Bureau identified 38 cases of “false indications of urgency”, which it described as promotions extended, renewed or immediately followed by another promotion, between September 2023 and August 2024.
L’affidavit de Mme Carr states that the Bureau informed Léon and The Brick that it had concerns regarding deceptive marketing in a letter sent on August 6, 2024.
The Bureau’s application for its court order indicates that it has reason to believe that Léon and The Brick continue to engage in the conduct described in Ms.’s affidavit.me Carr.
To reach a definitive conclusion, the Bureau seeks documents related to companies’ pricing and marketing, including how they set and change prices, and plan and structure marketing and promotions.
In the request, the Bureau indicates that its commissioner “has reason to believe” that Léon and The Brick made communications about the regular price of a product, even if they “did not offer certain products at the regular price or higher in good faith for a substantial period.”
The Bureau says these communications “create the general false or misleading impression that certain products are on sale.”
The organization also notes that companies appear to be making “false or misleading” statements to the public about the end dates or time-limited nature of some of their promotions.
These statements give the general false or misleading impression that certain promotions will end on a particular day when, in fact, the promotion is extended or renewed beyond the stated end date or is assigned a new, later end date, concludes the Bureau.
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