The Hudson's Bay Company is paying $4.5 million in costs related to deceptive marketing practices for sleep sets in Canada. A news release from Competition Bureau Canada outlines Hudson's Bay's agreement to pay a penalty of $4 million, in addition to covering $500,000 in costs paid by the Competition Bureau. The costs were related to the Competition Bureau's proceeding involving Hudson's Bay false advertising practices in Canada, specifically regarding their sleep sets.
A consent agreement was registered today with the Competition Tribunal that will ensure that Hudson's Bay's marketing of sleep sets remains in compliance with the provisions of the Competition Act, prohibiting false or misleading selling prices.
The company also committed to creating a corporate-wide compliance program that will hopefully promote compliance on all levels of the business.
Back in 2017, the Competition Bureau initiated legal action against Hudson's Bay when it uncovered "deceptive marketing practices" throughout the company, accusing Hudson's Bay of selling sleep sets at inflated regular prices, and then advertising extreme discounts on those prices, misleading consumers into believing they were being offered significant savings.
The Bureau also accused Hudson's Bay of misleadingly representing clearance promotions by suggesting that the price of sleep sets had been lowered to sell off products to deplete remaining inventory. However, the truth was that Hudson's Bay did not possess significant remaining inventory. Rather, Hudson's Bay actually ordered brand new products from their suppliers as soon as customers made their purchases.
The agreement between The Hudson's Bay Company and Competition Bureau mitigates the need to escalate the case to involve litigation, as legal proceedings were scheduled to start this month.
By agreeing to the deal, the consent agreement is just as binding as a court order and will continue to be for a period of 10 years. Hudson's Bay has promised that all marketing practices related to major appliances comply with the provisions of the Competition Act.
Matthew Boswell, the Commissioner of Competition Bureau Canada, stated in the news release, "This agreement is a victory for Canadians, and sends a strong message that the Bureau will not tolerate unsubstantiated savings claims that prevent consumers from making informed purchasing decisions."