Many corporations that are renowned typically have at least one big scandal. Bell Corporation Entertainment (BCE) Inc. is not an exception as they have been caught by the federal Competition bureau for committing false advertising — they overcharged the bills for their service compared to the price that they have promoted. This case is also studied through the understanding of the harms to the consumers, the systematic way of building and converting their business into the field of politics, or the possible financial crisis to the Canadian economy if the bureau did not intervene them.
In 2011, BCE Inc. has falsely advertised their service fees for using the service bundles. Their bundle included the wireless internet, TV entertainment, and unlimited calls/texts for $ 69.99 per month. However, they charged $ 80.27 in the bills because they included the basic fees without acknowledging their customers (Sturgeon, 2011). The federal Competition bureau discovered this fraud and fined the corporation over CAD $10 million for publishing misleading advertisements (Competition Bureau, 2015). The news media reported this scandal immediately after the fine and dumbfounded the Bell’s customers (CBC News, 2011). In addition, the statistics reported that Bell had the highest number of complaints (approximately 4000 which is 32%) regarding (#1 issue) the inaccurate bills, (#2) incomprehensive agreement or contract, and (#3) dissatisfying quality of customer service for over four years, compared to Rogers Communication Service Inc. that had 3800 and Fido that had 1000 (Evans, 2014; Jackson, 2014; The Canadian Press, 2013).
Bell’s false advertising behavior quite contradicts to the federal Competition bureau’s rules. However, this behavior seems habitual among the top executives. They alarm their customers by overcharging the bills and their customers complain about their bills. When this pattern of behavior repeats and if it happens among many of the big corporations, the customers are desensitized and count this incident as one of the common frauds although it is distressing that they need to protest and ask for compensation. Snider (2009) discusses that the leaders of a big company tend to aim for great profits despite the higher possibility of risks. In Bell’s case, the top executives wanted to attract more customers using deceptive advertisement regardless of the sanctions. Inside the corporation, these big players persuade the stakeholders, relieve them for guaranteed high profit, and ignore the criticisms about the deviance that the company is committing (Ayres & Braithwaite, 1991).
This incident then provides a sense of how the executive leaders played some tricks with money. Miller and Harkins (2010) discuss that an institutional corruption occurs when the company plays “market-driven politics”. Despite the highest number of customer complaints, the company’s business is interconnected with the media and the policy makers to hide their failures. They offer the top quality of their service to other leaders such as politicians, lawmakers, presidents of certain media, etc. and expect a good favor in return — which is called as the-revolving-door technique. In this case, the media did not report any further detail about Bell’s false advertising other than the customers were overcharged with their bills. There were many questions remained in relation to the compensation on the customers, intention of this deviance, etc.
Still, the corporation did not have any significant impact on their reputation until they engaged in a debate with Canadian Radio-television and Telecommunications Commission (CRTC) about fibre-optics. However, this may have led to a serious financial crime to the Canadian economics if CRTC did not intervene. CRTC recently ordered Bell to share their brand-new technology — which is suspected have been in use during the false advertising — the fibre-optics telecommunications to the small companies to maintain the current competition (Dyer, 2015). CRTC has been concerned that if Bell is the only company that offers the fastest and the best quality of service, almost every small telecommunication company would be eliminated from the competition market. This may lead many customers who do not prefer Bell or Rogers to feel being obliged to use the Bell service despite the expensive service fees. In other words, there are a few negative consequences that apply to the consumers or other competing companies. On the other hand, Frederiche (2004) discusses that transnational (facilitations in many international operations) and conglomerate (support in diverse entertainment programs nation-wide) corporations such as Bell tend to pursue their interest in hyper-modernizing their company. In other words, the leaders of the Bell corporation are highly interested in the higher profit that comes from their service. Plus, they argue that if they share their new technology with other small companies, they will eventually stop their investment in the future technology (Chung, 2015).
Bell’s false advertising has negative impacts in multi-levels of organizations. A big corporation that attracted more profit in deviant ways has been punished by the federal Competition bureau. This case is also examined in terms of how they harmed the consumer, how systematic they become and soon turn to be deviant, and how this would have been leading to a serious financial crime to the Canadian economy.
Ayres, Ian and Braithwaite, John. 1991. Tripartism: Regulatory Capture and Empowerment. Law and Social Inquiry, Vol. 16(3): 435-496
CBC News. 2011. Bell Canada pays $10M over misleading ads. CBC News Business. Retrieved June 28, 2011 (http://www.cbc.ca/news/business/bell-canada-pays-10m-over-misleading-ads-1.1016391).
Chung, Emily. 2015. Bell appeals CRTC ruling forcing company to sell fibre internet access to small ISPs. CBC Technology & Science. Retrieved from http://www.cbc.ca/news/technology/crtc-bell-fibre-1.3350885 on 7 December 2015
Competition Bureau. 2015. False or Misleading Representations and Deceptive Marketing Practices: False or misleading representations and deceptive marketing practices under the Competition Act. Government of Canada. Retrieved from: http://www.competitionbureau.gc.ca/eic/site/cb-bc.nsf/eng/03133.html
Miller, David and Claire Harkins. 2010. Corporate Strategy, Corporate Capture: Food and Alcohol Industry Lobbying and Public Health. Critical Social Policy 30(4): 564-589.
Dyer, Evan. 2015. CRTC says big telecoms must share high-speed networks with competitors. CBC News Business. Retrieved July 22, 2015 (http://www.cbc.ca/news/business/crtc-says-big-telecoms-must-share-high-speed-networks-with-competitors-1.3163132)
Evans, Pete. 2014. Telecom complaints down 17% overall — but misleading contract complaints surge. CBC News – Business. Retrieved November 4, 2014 (http://www.cbc.ca/news/business/telecom-complaints-down-17-overall-but-misleading-contract-complaints-surge-1.2822144).
Friedrichs, David. 2004. Enron et al. Paradigmatic White-Collar Crime Cases for the New Century. Critical Criminology 12(2): 113-132.
Jackson, Brian. 2014. Bell remains most complained-about service provider in annual report. Itbusiness.ca. Retrieved November 4, 2014. (http://www.itbusiness.ca/news/bell-remains-most-complained-about-service-provider-in-annual-report/51985)
Snider, Laureen. 2009. Accommodating Power: The ‘Common Sense’ of Regulators. Social and Legal Studies 18(2): 179-197.
Sturgeon, Jamie. 2011. Bell fined $10M for ‘misleading advertising’. Business Financial Post. Retrieved June 28, 2011. (http://business.financialpost.com/fp-tech-desk/bell-fined-10m-for-misleading-advertising?__lsa=05d5-ddac)
The Canadian Press. 2013. Telecom billing complaints on the rise, report says: Bell Canada and Rogers top list of companies getting wireless complaints. CBC News – Business. Retrieved November 6, 2013. (http://www.cbc.ca/news/business/telecom-billing-complaints-on-the-rise-report-says-1.2416453)