Sears Alleged to Have Inflated Tire Savings

Canada’s Competition Bureau has alleged that Sears Canada misled consumers as to the true savings when it sold tires at sale prices.
It is the first application under the new ordinary selling price provisions of the Competition Act. This application, filed with the Competition Tribunal, alleges that Sears deceived consumers about the real value of their savings by referring to “inflated” regular prices when advertising certain tires at “sale” prices during the year 1999.
During that year, the tire market industry in Canada was worth approximately $1-billion.
The application has been made under the Deceptive Marketing Practices provisions of the Competition Act. These provisions provide a framework to sellers for making claims about regular prices, which is designed to ensure that when products are promoted at sale prices, consumers are not misled by reference to “inflated” regular prices.
“The Competition Act recognizes that regular price claims have a powerful effect on consumers,” said Raymond Pierce, deputy commissioner, Fair Business Practices Branch. “Consumers lose when the information they receive from retailers is not trustworthy.”
In the application, the Commissioner is asking the Tribunal to issue a prohibition order for 10 years and order Sears to cease and desist the alleged conduct, publish a public corrective notice, and pay a monetary penalty.