CAIP argues for Tariff 22-type decision in online advertising rules debate

ISPs could be sued for misleading advertising on a client’s web site unless the Competition Bureau makes changes to proposed new guidelines on Internet advertising, warns the Canadian Association of Internet Providers (CAIP). Released in May, the bureau’s draft guidelines threaten to ignite a Tarrif 22-type battle by using wording that appears to treat ISPs as media publishers. CAIP president Jay Thomson hopes this "oversight" will be corrected by the end of a two-month consultation period to determine the final guidelines. Otherwise, he says, ISPs could be unfairly held responsible for misleading offshore advertising in the absence of anyone else to sue. "That (wording) places the ISP in a position where it is potentially liable for advertising on millions of web pages from foreign companies," he says. "That’s impossible to do. And, it runs contrary to other thinking as to the liability of ISPs as conduits of other people’s content." The contentious guidelines are published in Staying ‘On-Side’ When Advertising Online: A Guide to Compliance with the Competition Act When Advertising on the Internet. The guidelines set out how competition rules governing traditional advertising and marketing practices apply to on-line advertising and on-line marketing practices. The trouble, says Thomson, is that the bureau shouldn’t treat ISPs as they would traditional publishers, as the bureau has proposed in its draft guide. At issue is a short paragraph in the document that states: "The Bureau is aware that some ISPs and other parties may serve as data carries only and as such they facilitate the dissemination of information but have little or no ability to review material or otherwise influence its content. In determining how to exercise its enforcement discretion in respect of a data carrier the Bureau would consider a variety of factors including the degree of control exercised by the data carrier with respect to the content it disseminates and any reasonable measures taken by the data carrier to prevent or limit the dissemination of false or misleading representations." In Canada, publishers of TV, radio or print publications enjoy a "publishers exemption" from liability for carrying, in good faith, advertising that turns out to be misleading. Because it’s more difficult for readers to determine the validity of offshore advertising, however, the bureau doesn’t grant that same exemption when accepting advertising from a non-Canadian. According to the draft guidelines, web sites would fall under those rules. However, Thomson is upset that the bureau hasn’t seen fit to grant ISPs a blanket exemption from both types of advertising, since they may not control what gets routed through their servers. He cites the Copyright Board of Canada’s Tariff 22 decision in 1999 as an example of how the Competition Bureau should treat ISPs (CNM, Nov. 9/99). In that controversial decision, it was ruled that ISPs would not be held liable for music copyright infringement, since ISPs weren’t able to control the content flowing through their networks. "The answer is not to go to the ISP because there’s nobody else to go to… You don’t attach liability to an undertaking out of your convenience," Thomson argues. On the issue of Internet advertising, CAIP plans to present its written arguments before the end of the consultation process. For its part, the bureau says no firm decisions have been made one way or the other. Julie Tremblay, a senior competition law officer at the bureau, told Canadian NEW MEDIA the process will be transparent. "If some stakeholders read it and feel that we should address other areas and technicalities that we’re not aware of, we would like to know." The Internet Advertising Bureau of Canada is also preparing a submission on the matter, though it is not yet prepared to divulge details.

CAIP argues for Tariff 22-type decision in online advertising rules debate

News | 06/14/2001 4:00 am EDT

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