Koodo's new pricing seems to violate the Competition Act.
Koodo unveiled their new price structure today. In a nutshell, they offer two levels of "Tab" financing:
1. "Tab" allows you to finance a new handset at up to $15 per month (a total of $360 over 24 months). It applies to all phones except the iPhone 6 and 6 Plus.
2. "Tab Plus" allows you to finance a new handset at up to $21 per month ($504 over 24 months). It currently applies to only the iPhone 6 and 6+. However, it requires you to subscribe to a higher priced Tab Plus plan.
Here's the problem. Section 77 of the Competition Act prohibits Tied Selling, where a seller "as a condition of supplying a particular product, requires or induces a customer to buy a second product."
In this case, iPhone 6 and 6+ customers are induced to purchase a Tab Plus plan. The customer is already footing the full cost of the phone: a $360 downpayment + $504 term financing. Consequently, The Tab Plus plan adds as much as $888 to the price of the 24 month contract without providing additional benefit to the consumer.
I intend to file a complaint with the Competition Bureau this coming week.
1. "Tab" allows you to finance a new handset at up to $15 per month (a total of $360 over 24 months). It applies to all phones except the iPhone 6 and 6 Plus.
2. "Tab Plus" allows you to finance a new handset at up to $21 per month ($504 over 24 months). It currently applies to only the iPhone 6 and 6+. However, it requires you to subscribe to a higher priced Tab Plus plan.
Here's the problem. Section 77 of the Competition Act prohibits Tied Selling, where a seller "as a condition of supplying a particular product, requires or induces a customer to buy a second product."
In this case, iPhone 6 and 6+ customers are induced to purchase a Tab Plus plan. The customer is already footing the full cost of the phone: a $360 downpayment + $504 term financing. Consequently, The Tab Plus plan adds as much as $888 to the price of the 24 month contract without providing additional benefit to the consumer.
I intend to file a complaint with the Competition Bureau this coming week.