Docket No.: CT .. 2006..002 COMPETITION TRIBUNAL IN THE MATTER OF THE COMPETITION ACT, R.S.C. 19851 c. C~34, as amended;
AND IN THE MATTER OF an inquiry under subparagraph 10(1)(b)(ii} of the Competition Act concerning the trade practices of Econoco inc. and others and of an application for an order filed by the Commissioner of Competition under section 74.1 of the Competition Act;
AND IN THE MATTER OF the filing and registration of a consent under section 74.12 of the Competition Act. BETWEEN: THE COMMISSIONER OF COMPETITION ~-------------~
COMPETITION TRIBUNAL TRIBUNAL DE LA CONCURRENCE Applicant FILED I PRODUIT September 28, 2006 Jos LaRose for I pour ECONOCO INC. REGISTRAR I REGISTRAIRE
OTTAWA, ONT # 0017a -and-REAL LAROCHE, CLAUDE TARDIF
CONSENT WHER~AS •· ttte ... COft1ft1i~~i()~r of ()c>ll'ternti!i~p (t~ ~lfl1i~~i~Jlf) (;f irects the Competition ~~re~~ £lf1d is r~~l)Ql)~i~I~ ~PE ~ ~~rq,~.i~~~Uqrr and enforcement· .• of••··the. ···Qo111p~~tftJc1.r1••·~t:t .• (tf1ti••••~ntlf•••••i9~i~i~@•••••th~••••Pf()~it\i<m~ •. of Part v11.1 .o f· ... ..• th~······•·J.\ct ... ·c 9np~rnt11@·••·· ~~(:~pti~~••••· fil~ti<'1ill~•••••· f)~Pt.f~~~·······•Vlhich includes. paragraphs··74.01•<1•M~l•·••nd•·.74St)1•{1}(~li•••V1fiiph•••f!'~Pti'!f¥••PfOhibit representations that are false or misleading in .a •m ateti;Jlrespect ·and
representations in the form of a statement, warranty or guarantee of the performance, efficacy or length of life of a product that are not based on an adequate or proper test thereof;
WHEREAS Econoco Inc. ("Econoco") is a company incorporated In the province of Quebec under Part 1 A of the Companies Act. R.S.Q., c. C-38, and the respondents Real Laroche and Claude Tardif are or have been directors and shareholders thereof and President and Vice-President respectively;
WHEREAS the respondents are all domicUed in Quebec1 although Econoco carries on its activities throughout Canada; WHEREAS Econoco engages in the economic activity of designing and marketing fuel-saving and anti~pollution devices and products;
WHEREAS the respondents have marketed a device known as the l•econopro'' held out as being capable of reducing fuel consumption in and emissions of polluting gases from gasoline and diesel engines;
WHEREAS the respo.ndents have be~n .t he subject of an inquiry under subparagrtiph. 10(1)(b)(H) of the Competition A.ct in .. respect .. of .. marketing practices contrary to paragraphs 74.01(1}{a} and 74.01(1){b) of the Act;
WHEREAS foHowlng her . Jnquiryt the Oorprnis~i9n~r foul'lg, a~d .. the respondenf$•··~~JJ1it .. •se>lely•·.for••·t~~•••euree>~e,s •.<'Jf··•~l'li~••.rf.ll1Se!1tt, ···~~t•••m•• .. <.lrt.fer. to promote·. busil'lf!~S••• il'\teres;t~• '2~•r;tidf)' •• a!f14:••te!• Rf:()l11(.)~e tl'l•• $iUJll~ !ll'lPf.qr• use of the EcortoPr;(), t}.\~ .r,spqf:)del'\t~ 111liltt• ~ ~p~~¢~t1.ti()Ji ~o IJ1~ p~plic fht\t was false or. 11'li~lti)il~l9gin a lllaterial .r~~~1:t. i~Ch,fdil'l~.~rtp.ernin'1.the ability·. of. the Eeon()pro to •· riquc;e f~~I c;pnsurnJ)ti.()l'l *11 a;n¢1 ·th~ ~rgissipn of potluting. g;a~. trem a. di~s~l·.· e>r t1E1sp1111e •~riS:l'l'l• .. l;lnd ·th~ apiUty of. the Econopro to h1'lprove th~. perfe>rm~n~e. pf the t~n{Jine aqp tl'te •xh~ust system of vehipl•s fueHetl or propelled by. a·· gasoline or (li&$el ·internal
combustion engine;
WHEREAS .. foll()VfiJ1S1 her }nq~iry, .. ttl§ y()~rni,~i()J1~L fp'J~\if anti ·<the responde~t$ '~nlit ~(.)lely 1er t~~ l'.,)9ff)()~~1:1 ()f ~~i~ ~(.)f1~~~t~ t~,a.t il'l ()r~rr to promote.·bµsin•ss lf\t7~~t$•(J~l'lerJ1ily1:n'l~···~~•••Pr()ffl()t~1:~~~MpJ.llY.-••f1llfll~f iJSe of the EcOl'l()JlrO, t~E;\ re~p()]1(f#n~ 111a!~ r~pr~~~l'l~llti<;tn~ ~() t~e! ..,~~~it;; in t~e form of asta'!tpent, warrt\llty()t' ~u~rant~7 ()ft.~~ P•f'f()fll'ltlf\~! pr ef{icacy of the Econoprothat were notp21sedon adeqYat• am:I pre>p:Etrte!;tsthereof; WHEREAS. the Commissioner. found~ and the re•l)(i)n~enU. ap.ftlits(lh:llyfor the purposes. of this cort~ent1.tf1atthe~onq~7*: ()!t~ l'e~RPJtl~l'I~ was conduct subject to re'View · pursuant ··to .. paragrapf'ls········74~01(1)(a) anti 74.01(1)(b) of the Act;
WHEREAS the parties are convinced that this case may be settled by the registration of a consent that will, as of the date on which it appliest resolve all the problems and apprehensions raised by the Commis$ioner concerning the marketing practices of the respondents referred to in paragraphs 74.01(1)(a) and 74.01(1)(b) of the Act;
WHEREAS the respondents agree to comply with the Act generally and, more specifically, with the provisions of Part Vll.1 of the Act concerning deceptive marketing practices;
WHEREAS the Commissioner and the respondents agree that, when the consent is signedt it shall be filed with the Tribunal for immediate registration;
WHEREAS. the Commissioner. and the respondents understand that, when it is registeredi this consent $halt be binding in accordance with section 74.12 ofthe Act;
THE PARTIES AGREE TO THE FOLLOWING AGREEMENT: Definitions 1. The foHowingdefinitJons apply tothis consent: (a) "written opinion•~ has the meaning giy~n to itb Y seetign t24.1 of the.Act;
(b).'~(;()m!lli~~ipp~~· •.•••••• meaps•••••••~~e ·... • C:()rt1rt)is$i()pftr••· <l~•••••••.•¥:Omf,1~~iti()n appgipt'd in ~n~t.)~O~~ with .. se<rti90 z·· of .t he J\'.ct arid> her authotizec!· repr~$$rt~tiyes;
(c ) 0 (:()n~.enf~ ••• lll@@~~····t~.i$····C()l)~ent· ·c;qgqlo(.fed···by••ttte•.··($$ppnd~nts and··tbe•••¢Pmmi$$i()ger;
(d). '''J'~i1>9na1»••••rn~Pf>. .... t~~••••¥e~P@ti~pn••••T~tpu11a1···sr~~t~a. •. •.u9~•••1he C()/'tJJ'S~fion Trioqnal Actv fiy$.C. <1 ~~fit c~ .. 19>(2d• ll.IPP~)f as amended; (e) ·;R~~egndent~n means Real L.aroc:f'le; Ctaudif>Tardif and Econoco inc~
Application 2. The provisions of thi$ oct11SEU'ltapply:
(a} to the respondents and to any other person acting on their behalf or in their interest, including all the successorsJ assignees, managers, officers, agents or assigns of the respondents, or any other person or company actlng on behalf of any or all of the respondents;
(b) to the Commissioner. 3. The Preamble is an integral part of this consent. Prohibition of False or Misleading Representations and of Representations That Are Not Based on an Adequate and Proper Test
4. The respondents or any other person acting on their behalf and in their interest, including au managers, officers, employees, agents or assigns of the respondents, or any other person or company aetlng on behalf of any or all of the respondents shall, for a period of ten (1 O) years from the registration of the consent, cease to maket have others make or permit to be made, to ·the public in any manner whatsoever false or misleading statenumts in order .··to. prornote:r directly or in~irectly1 the supply or use of the ~9onopro ()~ any other slmUar device held out as .•being capablet)f.in1J>rovlnQ C()rJ'll1\.l$titm In a ga$oline ordieset ef1~1rat:f ~ndlqt 's b$f~(I ~~t)I~ of: !;tiyl)'ll fuel. In, reducing . and/or .· f ;tlhtlln~til'\fl .J '()ll(Jtlf\ff *!tl1i~l()liS fr()rrt ·tl~k ()n fue other hand, to.·m~.ke represenra~()ll~ i~ t~e form: .()!: ~ ~tfltenlent, warranty or· .. 9ljilra:nt'~···. of•· tfi~. perf?rtn~l'\Sf;t/()C~ft1Bl!~Y\. ()f. the
Econ()pro .. ·· u?h~$$·.· •••·•?ef()rn ·•··•····•~()iJ'lSJ••· .••... ,(),·•·•·•···.tf,\~.•••••··••r~~p<)~~f'lt!;<.•• ~~lflf)llsh betore-~1Jnd that these repr$sentatlof'ts are J:)a$ed on a~uate and proper tests.
s. The r:.sp()ode11ts qr ~ny. ()tp7r p~f:~()f} 1Jmtl~$J ()11 .~he-~r ~~itlt or in their•.••i~t~re~t,•••••1nc1·~~ir1fl ll11••• rn~~~~r,ne>1f:iw~I• ~rnl?1()m~~i 1lf!~t'tt~.·.·.c:r as$iSJ'l'3·••ef. q •t"~·•••r~~J>Rrlc:i~11~1••••<>r••~l'l~••e~11~r•• per~91'l•••Pt•• <:<:>l'ttl?~~~•••llt:tins on. be.~~if f: ~~¥ ()f tilt t;)f foil*! r~~~()il~~~~ ~~~tit ~er lJ l~fi~~ 9f ten (10) .••• Yt)t.tr~··· ft()rn•. 1:~~····~~t~·· o~···••tr~i~~l1:t()(l •• ()f •• til~•· m()l1~(fl'l~,····~·~~··••litf(tput 11mmn~·••tf1e·••~@11~r-atit}'•••·•()~•·••tl1~·•••e~s~~1n~•••••R~r~~IPIJ~•••··•~~fj~•••••~9•••••l1l~~~' have• .• otpers·m~~~ •9~••• f>7rtr$il1:o•·b~• r1t~~e•.•1:()•••t~•••li'Hfl~l<;•••i~ ll~Y l'fl'Jl'lAet whatsoe'1$r; . repres~nfjtio~~ •t ~•t. 9'9f\~Y >~ . "'*?~r~i. ft:tl~· or mist~qing itl1pr,~~hln pr r~pfE1~~'1t~tir:m~ irl ~~~ ~C)fftl p.f ~ .$.~il!~rnentt warranty•· or $Jl*flr~t'lt7'• ()~ ~~~ J)~-rrllt\~<l~/()r e-tl!Jt?it~~< of·· the Econopro.•• C)r ••••,rl)' ••·~~~~f:••···•t;ilil~t:•·•• ~~~$~•• tf:iiil~··· IJ~••••·•~pt•• ~~~? qn .•.·an adeqot;.tt~•••'1"P••·•RrC>P~r•••~E;tet•••e'•••*"••• cfjJJ1A~ilitff)•••••Pf•••t&e•·• 1Eccmopro.· or ·any other $\mUar device; ineiµding; Enhancing. t~e ........ f'Jert()~maqc~. or .... ef-ficacy of. g~soUne con$umption by ten per cent{10%) or more (an average of ~/o
in the city and on the highway) and/or the performance or efficacy of gasoline/diesel consumption by fifteen per cent (15%);
• Enhancing performance through re-oxygenation that cleans the engine and its components;
Elimination of emissions of Nox gases by one hundred per cent (100%) from gasoline engines and reducing them by between forty per cent (40%) and seventy per cent (70%) from diesel engines;
· Reducing emissions of carbon dioxide (C02) by 47.5% from gasoline engines and by 34.5% from diesel engines;
· Generally improving the performance of internal combustion engines.
6. Before making any represet'ltation in the form of a statement, warranty or .~uarantee .o f . the• performance ..•.. or .. et'ficat:y ••· of the Econopro or. any other similar. device, •t he respondepts ~l)aU first establish that these. representations. are. based. on a~et.1 ...1 1te and proper•·•t~sts thereof, .. and in (.)r~er. to do .so.' .. $haJlspb~' these representations an?· tests Jn \\(riting bef(jtyll~t'ldt·. irt~9"9tt~~.\Vith section 124.t of the. Act~ .·.to t~e G:oJf\iP:i~~iq-rn~r, ~~9 ~11~11 !~itrnine thelll .. and .·· indicate ·Jn writing··· whetf1er ·the ··tests · submitt" are adequate ahjd proper. . Duration of consent 7. This C()n~e~t ~h~dl i, ~~Pli't~~le tor a ·period .of. ten (10) years from the date on wtlictr it i$ r~isterec:t.
Compliance with con$ent and· notice s. on the .writt~f1.l'e'll.le•t.9t t'e l)ppl.lty .. !;~tl'\ll\i~i(lpf!! ()f ~l~tition, Fair· ·.Bu;si~~·••·•Praetip'$t••· ··Brcil't~h,•••••~i\(i~~••••~~f!·•••r~~(>()t1P~~~·•••~ittty.·· ·(30} days~. .adv,~ce ... ·. notic~, th~< • rt!~f)f.)IJ(f~IJ~ ~~~It f>J'(.)\f~~ >!he Comh')i$sioner with· .. a.··wrltten report•••on•··1*f-'*Y•••Q'-f~stiqn •. cqnpe:rr\ing.•.thls consent.
9. Any .. noti~$. to ..•I .le ... SiM~t). t,H')~qr . tl'li~ con$ent $han be sent by registered.mail to the foHpwingaddress~s; {a) For the Commissioner of Competition
Attention: Deputy Commissioner of Competition Fair Business Practices Branch Competition Bureau Place du Portage, Phase 1 50 Victoria Street, 22nd Floor Gatineau, Quebec K1A OC9 Telephone (819) 997·1231 Fax (819) 9534792
(b} For the respgndents: ECONOCO INC. Attention: Real Laroche 2479, bout Labelle Prevost, Quebec JOR ITO
Reat Laroche 33, 216ieme·av~nue Saint-.Hyppalyte, Quebec J8A 1W 6
Claude Tardif 1352, cllemin clU LaC. fienaud PreVO$t, Qµel)ec JOR ITO 10. The.respondeJ'tts.sbtiU pr9Jricl~ qr ~l'l~~'r ~~~~ 'P<>J>y ()f~l1i~ 79~s~nt in its en~irety ~.~ pro~i~~c;f ~() IJl'l~ ~~e~ et~f'l$:J ~1~.11rr: ()~ ~~~it ~half or. in thf!Jir ·.. i11Jerest~ lncf~clil'l" .~ ti 'l'~l'l~~' ~~i~~~i nl\\Pl~~j agents e>'· a . n a~ ( i ) 9 t 11$ ... ()~•••t1~¥•••~t.~~r•••~<>~•••R~••~l'1P~r-~••'~~~U•••()ti•••!~f\alf of· anY'. or t~e; r~ppf'l~~nt$ Wi~llJ thittY (3()) PfilYS of the Q'ete on which this consent is slgped. 11. Within s~xty (f)(}) ·d ~Y$l ()f th~ d~tt:t 9l'l !~i~b ~lli~ ;qn~~l'lt i' .!i~ ne(j, the .respPf'l~l1ts ·.sljaU •con~rll1•••if1••~~ifl!"••~9••t~•••'IJ?mY••~tt1rtli~~loner of Competitio~, at.•·· •.. thf:•·· .. '*<i~~~~••••·•·•~f1tll.Vl'l•.·•••·i~·•·••••P•rt'1t~f>~••••••~•·•·••••~er·•·.·.•the purposes •of service, that they h~"e P()rrtPli~(;f !itl'f ~hei r~qµirements set outln paragraphs lo to 15 inclU$hte oftl'dfi con~ent• . 12. The ry<'~p()n~e.?ts sf'l"ll •q~!~~l~ !? In (!Pl1~if'fll~tig9 ·~tl~r ~~f~~rQtt to in. •para11~~P~••·•J·1••· th~••••n~.lll.~••••~f'l~··•~~i~i<J.~••••ti!~••~'••!ti¥~••••1l~t'~9~••••\V~P .. ••has received a copy of this cop~Qt lg li~¢9rd~nce witl'fP ar~9r4ph ·10. Corrective notices 13. Within 30 days of the iSS«.Jf!gce of~~- r~~i~tr~tiptl of thi$j r()nsent, the respondents shall distribute.a single pµbllpatlon on We()ne$Clays at
intervals of one week in the Journal de Montreal (in French) and in The Gazette (in English) of a notice entltled {TRANSLATION] "Notice from Econoco to motorists and truckers" that accurately reproduces the terms of the Notice contained in the attached Schedule to this consent.
14. The text of the Notice referred to in the preceding paragraph shall occupy a space of not less than 5 inches x 6 inches and be printed in
normal font of at least 10 points. The title of the Notice shaU be
printed in block letters and in normal font of not less than 16 points.
Administrative monetary penalty 15. The respondents shall pay an administrative monetary penalty of fifteen thousand dollars {$15, 000).
16. The administrative penalty shaH be paid in certified fund~. or by certified bank cheque made out to the Receiver General for. Canada.
17. The respondents shall beo severally Uti~l~ ft>r .. P!Yrt1e~~ of the .whole amount of the administrative penalty set out in paragraptr 15. General 18. ft is agreEKI thilt the Trit>unalshaU retain tb$.jurisdiction conferred on it by section 74.13 oftheAct. 19. tn •the event. pf a di~J.ll.I~ co11n~f1'llfl!J t~~ •n~~~~ttit~pJ:l g~ l!l'fJli(;tition of thi~·.· •~<>n:s~ e pt r , ' • " •• Y ·in <dJ.1t.fi"(l••••'~Y••••~~i~it.)f1••••t.)~••••~~~·•••¥<>~rJ1i~~~l1~r•••~n~r this •C 9f1~'nt ~r~~p~ qt lfli~ $().Q~~ll~ ~" the r~•pqn<J•nf$t the parties· ·may•m.ake.··an· appUcatiqrrto••.~ 'fril)uoah 20. This con$ef1t. ~haJI b~ ~~v~~l'I~ '~ if1~tpret~d• in acpordance with the laws in effectin canatta ttiatappfy toJt~ DONE at Blainville, In the province of. Ouet>ee, S.Pt•mber 15, 2006 ECONOCO INC. Per:
REAL LAROCHE
DONE at Blainville, in the province of Quebec, September 15, 2006 REAL LAROCHE DONE at Blainville, In the province of Quebec, September 15, 2006 CLAUDE TARDIF DONE at Gatineau, in the province of Quebec, September 22, 2006 DEPUTY COMMfSSIONER OF COMPETITION
Schedule Notice from Econoco to motorists and truckers This notice is given by Econoco inc. The Commissioner of Competition is of the opinion that the representations made to the public by·Econoco inc. concerning the 1 ~Econopro 0 device. are .false and mitileadin~ Jn .•.material respect and are not based on adequate and prgpertet>fs in accordance with sections 74.01(1)(a) and 74.01(1)(b) of the Competitlcm Act. Furthermore, the .. Commissiqner of Compf!titiot'l ..•. h~<of .. t~~ ()R-lt\ior .t~at i nstalUng this. device on t~7 el'lgine of a v~~ipl~ ()f' a trµcl<. d()~~ 9()t itpj,)r(lve the fuel con~ymption .. or red~ce polluting emi.$$ions and doe$ not enhance the performance of the engine. Having .l ll~lt)i~$(i .i ts lhil)iiity .~ ()l~ty fpt. tli-r p~~J>t;l~r~ gf re'11~V~~i(J~ ()f toe consent agr~~ l.lf>9tl W'itb t~ cz<.>f11tl'lh.~li()~~~ pf 99m~tl~if)~~ ~C()t\t,)(J()•lnc. and ·.·its·····Presi~nt1•···•f:t&Cl' .•. L,to~~e, •••. and····()l!J·Y•<lf!••••§ar~•if••••flit~l•••••lt~~d·••••~?••••lpng•r to. proniote<t~e <Ft:9l19B~f) .. <(;f~yi~~ p~. ~~¥ "t~~~ ~1111~~· (Jf!~iBr: Mn~g~~ .t~e represent,n9~1# f11~<J~•••9P:"F711'liJ'l$J••••*:~f!••·Bf!t'f( Jf11'1AOm~•·••~9~Pr•••~f:fiP:~P:~•••¢f'.··t~is device. are ~~C:Y~(lt~l\l1ff I'~~ "~ t~~t~ t;?t)~iqe~to b@ iicleqg~t•and pro.per in aocpman~,. with the l;gmp~tition "4Pt. This .n oti~e .. i~ P\l~ti~~. ~rt flt;<;~r(J~l\tf Y.f i~~ ~~~ c:g.o~~~t r~~i~~~~~ .if1 th• Competlti9~•."l"rl~4n~1 ... •()l'l•·• ~f>tlnt:>~r; ~~,.~~~'••••~~in~•• ll'f!Y••••~·•·•APP•$•e.d· ·on the Website·Qf•the.·COm~titio11••Trif;)uni!l•••t•••~W··Pt..fc~1cA£!