UPDATE 1-Court orders Rogers Communications pay C$500,000 in ads case

Mon Feb 24, 2014 9:25pm EST

TORONTO Feb 24 (Reuters) - Rogers Communications Inc was ordered to pay C$500,000 ($451,700) by an Ontario court that said Canada's largest wireless company did not conduct adequate tests to back up a claim that its Chatr discount brand had better coverage than rivals.

The Ontario Superior Court of Justice ruling was reached on Friday and disclosed on Monday by Canada's Competition Bureau, an independent law enforcement agency.

The court had earlier dismissed Competition Bureau claims that Rogers had used misleading advertising to promote Chatr, which Rogers launched several years ago to fend off new entrants such as Wind Mobile. At that point, the Competition Bureau had sought a fine of C$10 million.

The latest ruling found Rogers did not conduct enough testing to make the claims that customers on Chatr suffered fewer dropped calls than those using new wireless carriers.

Rogers said it was pleased the court had ruled its ads were not misleading and sharply reduced the fine from what the watchdog had recommended.

"The court found that virtually every allegation made was false and unfounded," Rogers said in a statement.

It said testing to verify the ads' claims were conducted, but that some positive results were not available right at launch.

The Competition Bureau said it was considering whether to challenge the penalty for being too small, and also the court's decision not to issue an order prohibiting similar advertising in future.

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