Investigation into car rental industry ad practices leads to third consent agreement
OTTAWA, Feb. 22, 2018 /CNW/ - The Competition Bureau has reached a consent agreement with Enterprise Rent-A-Car Canada Company (Enterprise) to correct what the Bureau concluded were misleading advertisements. Enterprise will pay a penalty of $1 million and review its practices to ensure that its advertisements comply with the law.
The Bureau concluded that services were not available to Canadian consumers at the prices advertised by Enterprise because additional mandatory fees were being charged by the company. The Bureau concluded that this practice resulted in consumers paying higher prices than advertised. According to the Bureau's investigation, Enterprise's additional mandatory fees increased the advertised prices by as much as 6% to 48%. The prices were advertised across various media, including online, on mobile applications and in emails.
This is the third time that the Bureau has taken action to resolve similar concerns in the car rental industry. So far, the Bureau's work has led to a total of $5.25 million in administrative monetary penalties against the three largest car rental companies in Canada.
"I commend Enterprise for collaborating with the Bureau to reach a resolution that ensures truth in advertising. Consumers will now be able to trust that the prices they see advertised are the ones they will pay, and won't be surprised by extra fees."
Commissioner of Competition
- The agreement, which is registered with the Competition Tribunal and is legally binding, resolves the Commissioner's concerns; as such no further legal proceeding is required at this time.
- The Administrative Monetary Penalty is paid to the Receiver General of Canada and becomes part of the government's general revenues.
- Enterprise Rent-A-Car Canada Company operates under the trade names Enterprise Rent-A-Car, National Car Rental and Alamo Rent-A-Car in Canada. Individual locations may be independently operated.
- This agreement also addresses the concerns raised by the conduct under the provisions of the Competition Act that came into force when Canada's Anti-Spam Legislation was adopted. As such, the agreement applies to all representations regarding prices and discounts, including those distributed in electronic messages.
- Over the last years, the Bureau has been particularly active in fighting drip pricing, a practice in which additional fees are added later in the purchasing process and the real price of a product or service ends up being much higher. Ensuring truth in advertising in Canada's digital economy is a priority for the Bureau and targeting hidden fees is a key focus of its efforts.
- In June 2016, Avis and Budget paid a penalty of $3 million dollars and in April 2017, Hertz and Dollar Thrifty paid a penalty of $1.25 million. In both cases, the Bureau had concerns over similar pricing practices and the Bureau further concluded that some of these fees were described in a way that implied that they were mandatory taxes or surcharges imposed by various governments when, in fact, the companies chose to impose the additional mandatory fees to recover part of their own cost of doing business..
- The Bureau will continue to examine similar conduct in the car rental market and will take appropriate action as necessary.
- Hertz and Dollar Thrifty to pay $1.25 million penalty for advertising unattainable prices and discounts
- Avis and Budget to ensure prices advertised are accurate
The Competition Bureau, as an independent law enforcement agency, ensures that Canadian businesses and consumers prosper in a competitive and innovative marketplace.
SOURCE Competition Bureau
For further information: For media enquiries, please contact: Media Relations, Telephone: 819-994-5945, Email: [email protected]; For general enquiries, please contact: Information Centre, Competition Bureau, Telephone: 819-997-4282, Toll free: 1-800-348-5358, TTY (hearing impaired): 1-866-694-8389