Court filings show what led to Competition Bureau investigation into Leon’s The Brick – Winnipeg Free Press

TORONTO – Court documents offer a window into what triggered the Competition Bureau’s investigation into two of Canada’s most prominent furniture retailers.

The Watchdog last week obtained a court order forcing Leon’s Furniture Limited and its subsidiary The Brick Warehouse LP to hand over documents that would help determine whether the companies were engaging in deceptive marketing practices.

The affidavit that helped secure the court shows that the bureau launched a preliminary investigation into Leon’s and The Brick in July 2023, with a team reviewing the companies’ websites and postings, visiting their stores and consulting provincial and federal government sources and Canadian business records. .

In an Oct. 31 affidavit filed in Federal Court in Ottawa by Paula Carr, the office’s senior competition law officer, it is stated that the team’s purpose is to monitor prices and promotions of certain products.

One of the products reset in late September 2023 was the LG smart electric series with air fryers

Carr said that on March 30, 2024, the bureau saw the series being sold for $1,595 on The Brick’s website.

In reviewing the previous six months, the bureau found that the series was offered for 169 days at a promotional price, usually shown in red, but never at a regular price.

“Calculations have led me to conclude that any representations indicating that the product is on sale or offered at a discount are likely to be false or misleading,” Carr says in his affidavit.

When asked about applications to obtain a court decision, the office said it had not yet reached a conclusion regarding a crime, referring to the Canadian Press’ statement dated November 20.

Leon’s and The Brick similarly noted last week’s statement that they are committed to complying with all regulatory requirements and are cooperating with the bureau’s investigation. They called the court decision “standard procedure for all investigations of this nature.”

Carr’s affidavit shows the bureau also spent time reviewing instances where Leon’s and The Brick advertised promotions as “limited time only” or sale end dates.

The Observer found that sometimes these promotions “continue beyond the represented sale end date, but the clock icon and sale end date have been removed.”

In other cases, Carr says, “one sale immediately follows another without returning to the regular price; the promotional price changes to either a higher or lower price.”

In the case of the LG stainless steel refrigerator by Leon’s, the Bureau found 38 instances of “fake emergency sign representations,” which it defined as promotions that were extended, renewed, or immediately followed by another promotion between September 2023 and August 2024.

Carr’s affidavit states that the bureau notified Leon’s and The Brick of misleading marketing concerns in a letter sent on Aug. 6, 2024.

The office’s application to obtain the court order states that it has reason to believe that Leon’s and The Brick continue to engage in the behavior described in Carr’s affidavit.

To reach a definitive conclusion, the bureau is looking for records related to the company’s pricing and marketing, including how the company sets and changes prices and plans and structures marketing and promotions.

In the filing, the bureau said the commissioner “had reason to believe” that Leon’s and The Brick had made claims about a product’s regular price when they “failed in good faith to offer certain products at the regular price or higher for a significant period of time.” of your time.”

The bureau says these claims “create the false or misleading general impression that certain products are on sale.”

The bureau also says companies have made “false or misleading” statements to the public about the end dates or limited duration of some of their promotions.

“These statements convey the false or misleading general impression that certain promotions will end on a particular day if the promotion continues or is renewed after the represented end date or is given a new, later end date,” the Bureau said.

This report by The Canadian Press was first published Nov. 25, 2024.

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