BCE Inc. to pay $1.25-million penalty for “astroturfing”

BCE Inc. (TSE:BCE, Mkt cap 48.46B, P/E 19.40, Div/yield 0.65/4.55, EPS 2.94, Shares 840.33M) has promised to improve its “corporate compliance program” after settling on a penalty of $1.25 million for allowing its employees to write online reviews of Bell products and services without disclosing their ties to the company, The Globe and Mail reports.

Canada Stockwatch BCE pay penalty astroturfing

Canada Stockwatch – BCE Inc. to pay $1.25-million penalty for “astroturfing”

The penalty, imposed by the Competition Bureau, is the first of its kind in the industry and sends the message to marketers that they are responsible for policing deceptive practises and making employees aware of the standards that exist in online marketing.

The Competition Bureau was made aware of the matter after Bell admitted that some of its employees were “overzealous” in posting reviews for Bell Canada’s “MyBell Mobile” application on the Apple AppStore.

Scott Stratten, author and founder of Oakville, Ont.-based firm Unmarketing, was the first to flag the reviews, which were posted under the names of some Bell employees, but they did not make known their corporate affiliation.

When questioned about the deceptive online reviews by The Globe and Mail last year, Paolo Pasquini, director of communications and social media at Bell Canada, wrote in an e-mail: “The postings were the result of an overzealous effort on the part of our service team to highlight the app. It’s certainly not Bell’s practice to encourage employees to rate our products, and we’re sending a clear message out to the team to that effect.”

This technique, called “astroturfing”, is thought to be widespread throughout the industry, prompting the Competition Bureau to send out a bulletin last year reminding consumers not to “buy into fake online endorsements” and to report any cases to the watchdog.

According to the Competition Bureau, Bell “acted quickly” to remove the ratings and reviews once they were brought to its attention, and co-operated with the bureau’s inquiry.

“Nevertheless, the bureau determined that these reviews and ratings created the general impression that they were made by independent and impartial consumers and temporarily affected the overall star rating for the apps,” the bureau said in a release.

BCE Inc. is a Canadian communications company, with head offices in Verdun, Quebec. The Company provides residential, business and wholesale customers with a range of solutions to all their communications needs, including wireless, high-speed Internet, Internet protocol television (IPTV) and satellite TV, business Internet protocol (IP) broadband and information and communications technology (ICT) services. The Company operates in four segments: Bell Wireless, Bell Wireline and Bell Media. In addition, the Company also holds a 35.4% indirect equity interest in Q9 Networks Inc. (Q9), a 28% indirect equity interest in Maple Leaf Sports & Entertainment Ltd. (MLSE), an 18.4% indirect equity interest in entities that operate the Montreal Canadians Hockey Club and the Bell Centre in Montreal, and a 15% equity interest in The Globe and Mail. As of December 31, 2014, through Bell media, the Company 106 radio stations in 54 markets across Canada reached on average 17.4 million listeners per week from coast to coast. More from Reuters »

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