Business

Sears tire ads overblown, competition tribunal rules

Retailer Sears Canada broke the competition law when it advertised tires on sale, the Competition Tribunal ruled.

Retailer Sears Canada broke the competition law when it advertised tires on sale in 1999, the competition regulator said on Monday.

The quasi-judicial Competition Tribunal ruled that Sears sold less than two per cent of some kinds of tires at full price before it promised big savings on those tires.

The Competition Bureau, which brought the case against the company, said it "is confident that this landmark decision sends a loud signal to the business community that bogus bargain price claims mislead consumers and harm retailers who comply with the law."

"The tribunal found that Sears could not have truly believed that its regular tire prices were genuine and bona fide prices that the market would validate," the bureau said in a release.

The bureau's request for a $500,000 penalty will be considered at a later tribunal hearing. The bureau also wanted Sears to correct the advertised prices, but the tribunal rejected that.

No consumers hurt, Sears says

Sears said its advertising "conformed with tire retailing practices in 1999," and noted the tribunal did not find any consumer harm from the advertising.

But "the tribunal concluded that an absence of consumer harm was not a relevant factor in the matter," the company said in a statement.

Sears said it was disappointed, and "will determine its legal recourses" once all aspects of the tribunal hearing are finished.

Sears sought to reassure its customers that it "wishes to assure the public and all stakeholders that the company is committed to ensuring its advertising makes only valid claims and otherwise meets all legal requirements."

Sheridan Scott, the competition commissioner, said "Canadian consumers should expect nothing less than truth in advertising, when deciding where to spend their hard-earned money."