Bell Pays $1.25 million Penalty for Fake Online Reviews

bellThe Globe & Mail reported in October that “BCE Inc. has agreed to pay a $1.25-million penalty after the company’s staffers wrote online reviews of Bell products and services without disclosing their ties to Bell. It is the first penalty of its kind imposed by the Competition Bureau in response to deceptive online reviews.”

The Competition Bureau was established by the 1986 Competition Act “to maintain and encourage competition in Canada in order to promote the efficiency and adaptability of the Canadian economy.”

This case is an example of whether “caveat emptor” or “let the buyer beware” is a good enough principle for enforcing honesty in a market economy. The Competition Bureau was created, in part, with the intention of regulating unscrupulous business practices that consumers would have difficulty detecting or responding to.

But regulation also has its costs, hence the discussion in Microeconomics for Life, Ch 10.4, about market failure versus government failure.