The Competition Bureau is reviewing what it calls a "modest" $500,000 penalty imposed on Rogers Communications (TSX:RCI.B) for making what it alleges were unsupported performance claims for its talk-and-text brand Chatr.
The bureau also said Monday that it was also reviewing the decision by Ontario Superior Court not to issue an order to prevent Rogers from making similar kinds of performance claims in the future.
Four years ago, new player Wind Mobile had filed a complaint with Competition Bureau over Rogers' claims that its Chatr brand had fewer dropped calls and a better network than its new wireless competitors.
The bureau had asked that the court impose a $10-million fine on Rogers, the maximum amount allowable.
Rogers didn't do enough testing, court says
Although it appeared unhappy with the size of the fine, the bureau says it was pleased that the court recognized in its decision, which was released Friday, that Rogers didn't do adequate testing to support the claims.
However, Rogers took a much different view of the decision, saying the court had found that "virtually every allegation made was false and unfounded."
"The court emphasized that extensive testing conducted by Rogers demonstrated that Chatr's ads were true and correct," it said.
"It did find that certain testing should have been completed by Rogers before any of the ads were published and therefore imposed a modest penalty of $500,000," it said.
However, "all testing was completed shortly after the ads began and confirmed that Rogers network had fewer dropped calls than our competitors," it added.
Chatr was launched in 2010 by Rogers, which also owns Rogers Wireless and Fido, to compete in the talk-and-text market.