OTTAWA (April 4, 2005) — Sears Canada Inc. was ordered to pay $487,000 (Canadian) for violating Canada's Competition Act when it exaggerated the possible savings to consumers during a 1999 tire sale.
Sears Canada, which in 2004 exited the automotive aftermarket business, “vigorously contested” the allegation. But the country's Competition Tribunal ruled in January that Sears had breached the act by making “false or misleading representations” concerning the amount of savings available to consumers.
Sears was ordered to pay a $100,000 administrative monetary penalty plus $387,000 towards the Competition Bureau's legal costs. The mass merchandiser also is prohibited from engaging in similar representations for 10 years, according to a statement from the Competition Bureau.
The bureau is an enforcement agency that initiated the complaint in 2002 while the tribunal is a court that hears exclusively competition-related cases.
The Sears case stems from a 1999 tire sale in which the retailer advertised discounts of 45 percent, compared with the regular price. But the tribunal said Sears had admitted it sold less than 2 percent of the tires at the full regular price before they were advertised on sale.