Bell Canada's independent retailers say the company is giving better sales incentives to non-exclusive dealers such as Best Buy and Future Shop. (Ryan Remiorz/Canadian Press)

Bell Canada Inc.'s independent retailers are suing the company for years of "abusive, arbitrary" business practices that include changing their contracted commissions.

The Independent Communications Dealer Association of Canada, which represents 172, or 80 per cent, of Bell's independent stores, announced on Tuesday it had filed suit against the company for three years of "not honouring agreements and systematically destroying our competitiveness, reputations and the value of our businesses that we have built, some of us for over 20 years," the group said in a statement.

The retailers seek more than $200 million in damages against the company as well as a reversal of all competitive measures listed in its suit, and a commitment to honour its current contract.

"Once we sign a contract, we expect that contract to be honoured, but instead, year over year, they make changes to it without our agreement," said CDAC vice-president Rick Umbrio.

"All we're asking is for Bell to honour their commitments and agreements. We want to be able to negotiate with Bell, put something in writing and they honour it, not change it on the fly."

The final straw in the "downward spiral" of their relationship, Umbrio said, came recently when Bell decided to cut commissions dealers earn on upgrading customers to new phones. The retailers had signed a contract with Bell in March that would leave their commissions untouched until June, 2009.

'Double whammy' for reps

"For Bell to do this in the crucial [fourth-quarter] time frame when my reps expect to make a few more dollars to buy [Christmas] gifts for their friends and family is a double whammy for them," said Umbrio, who owns two Bell stores in Toronto and another one just outside the city.

"That will impact our store viability and our ability to attract, keep and maintain our reps. Our reps are the ones that service our customers and Bell's customers. They are the face of Bell in our stores."

Julie Smithers, a spokesperson for Bell, said the company does not comment on ongoing lawsuits.

The association said Bell management has been arbitrarily changing its contracts with independent dealers for the past three years, and that the company has been developing better incentives for stores that sell products that compete with Bell's, including Wireless Wave, Best Buy and Future Shop.

Bell has also been offering better deals to customers through direct marketing rather than going through its existing dealer chain, the lawsuit said.

'Years of mismanagement'

CDAC also said years of mismanagement have resulted in Bell falling from first to third place in the wireless marketplace, a fact that has diminished customer and investor brand loyalty.

The case is the latest in a string of lawsuits brought against Bell over the past year for changing contracts. Consumer groups in Ontario and Quebec have filed class-action lawsuits against the Montreal-based company for imposing charges on incoming text messages and for throttling internet speeds. The lawsuits said that in both cases, Bell had broken contracts with its customers.

The Canadian Radio-television and Telecommunications Commission is also weighing a complaint on internet throttling brought forward by the Canadian Association of Internet Providers earlier this year. In its complaint, CAIP said Bell had broken the law by changing the terms of the contracted wholesale internet services it sells to the group's smaller service providers.

The regulator is expected to make a ruling in November.

Smithers would not comment on the company's policy toward honouring contracts with agents, retail and wholesale customers, but said customer service was Bell's top priority.

"We've added dealers, corporate stores and customer service agents," she said. "We are dedicated to meeting and exceeding our customers' expectations."