Where’s the Competition Eh? Two Ontarians to Make Documentary on Competition & Liquor Retailing in Ontario
March 6, 2014
Readers of my blog will know that I like competition, a lot (and that I like regulation, well, a lot less). While I make my livelihood from regulation (I am a lawyer after all), my view is that most markets are better off driven by the market not regulators – that’s just my view, and obviously there’s a lot of debate over where the regulatory line should be (and different considerations in different industries).
In the spirit of more competition, I’ve been watching (like a lot of Canadians) the newest debate over deregulation of liquor retailing in Ontario (see my earlier post: here). Well, less deregulation and more raised questions as to why there are so few players.
March 3, 2014
In what can only be described as a somewhat sobering announcement, the U.S. Department of Justice (DoJ) announced earlier today that a former prime contractor manager has been sentenced to serve 14 years in prison in an ongoing bid-rigging, fraud and kickback case. According to the DoJ, this is the longest sentence ever imposed in the U.S. involving an antirust crime.
In describing the case, in which one Canadian defendant currently faces extradition to the U.S., the DoJ said:
“After a two week jury trial, ending on Sept. 30, 2013, McDonald was convicted of engaging in separate bid-rigging, kickback and fraud conspiracies with three subcontractors at two New Jersey Superfund sites – Federal Creosote in Manville, N.J., and Diamond Alkali in Newark, in return for kickbacks of more than $1.5 million. He was also convicted of engaging in an international money laundering scheme, major fraud against the United States, committing two tax violations and obstruction of justice. The various conspiracies took place at different time periods from approximately December 2000 until approximately April 2007. McDonald was initially charged in an indictment returned on Aug. 31, 2009.
Interesting Article on Canadian Competition Enforcement, More Interesting Flurry of Canadians’ Comments on Competition in Canada
March 3, 2014
It seems to me that competition law issues are in the media a lot more over the past few years. And so they should be (ok that’s my, slightly, biased view as a competition lawyer), given that competition affects virtually every decision Canadian consumers make – from buying groceries, to filling up the car, to cell phone plans to choice of where to buy their beer (a recent bugaboo for me of late, the liquor retailing debate).
On the theme of consumers and competition, earlier today CBC published what I thought was a very good comment by Peter Nowak on the perceived increased shift toward consumers by the Canadian Competition Bureau (see: Competition Bureau Taking More Consumer-Friendly Stance).
While I thought this new article was quite good indeed (it discusses recent Bureau cases, competition advocacy efforts, the new Commissioner of Competition and Conservatives’ recent consumer focused-efforts), in some ways I thought the flurry of Canadians’ comments in the half day the article had been published more interesting yet. The some 200+ comments are quite a good impromptu reflection of what Canadians obviously care most about when it comes to competition.
New OECD Publication: “Fighting Corruption and Promoting Competition” (Including Canadian & U.S. Contributions)
March 3, 2014
Earlier today, following its recent Global Forum on Competition, the OECD has published an interesting new report with international contributions on corruption and competition entitled Fighting Corruption and Promoting Competition. This new report includes submissions from Canada (the Competition Bureau) as well as a number of other leading jurisdictions including the United States.
Canada’s submission includes discussions on the Bureau’s partnerships with criminal law enforcement, the Bureau’s anti-corruption work with UPAC (Quebec’s anti-corruption unit), ongoing Charbonneau Commission in Quebec and work with procurement authorities to fight bid-rigging.
February 28, 2014
Virtually every industry, from telecommunications to agriculture, has benefited from standard-setting organizations (SSOs), whose collaborative work can advance technology, promote health and safety, and enhance quality and efficiency. From an antitrust perspective, by facilitating comparability and interoperability, SSOs can lessen barriers to entry, increase competition, reduce costs, and thus serve consumer welfare. It’s no wonder that courts and antitrust enforcement agencies have recognized SSOs’ pro-competitive qualities and the contributions they make to our nation’s economy. But on occasion, some SSOs have been accused of having a dark side, and of serving as a vehicle by which corporate members can use leadership positions within the SSO to promote their own interests and harm competitors.
Recent court decisions reflect plaintiffs’ proclivity to sue SSOs and their corporate members when they believe themselves to have been injured by real or imagined conspiracies that have infiltrated the standard-setting process. One such case, presently ongoing, stands as a reminder of the need for not only SSOs, but also their corporate members, to vigilantly police against conduct that is, or could be viewed as, intended to thwart the business interests of competing firms, and of the very significant potential antitrust liability that awaits those who fail to take these risks seriously and to implement adequate precautionary measures.
Antitrust & Associations: German, Japanese Antitrust Authorities Take Action Against Associations in Price-fixing Cases
February 28, 2014
In two interesting trade association related cases that caught my eye today, the German (Bundeskartellamt) and Japanese (Fair Trade Commission – “JFTC”) antitrust authorities have taken action against two trade associations for their alleged participation in price-fixing agreements with members (see: here and here).
In the German case, the Bundeskartellamt has imposed a fine of about 17 million Euros against four wallpaper manufacturers, the companies’ representatives and their trade association. According to the Budeskartellamt, Germany’s leading wallpaper makers fixed prices during a three-year period through industry trade association meetings. Interestingly in this case, the association’s managing director is said to have actively circulated price increase information from one wallpaper firm to other association members.
February 28, 2014
On my daily media sweep I read what I thought was a very good critique by Don Cayo (Vancouver Sun) of Canada’s current dairy industry, and in particular raising questions (yet again) as to whether supply management makes sense in Canada (see: Canada’s dairy monopoly costs families $276 a year).
This quite timely and persuasive comment discusses new Conference Board of Canada work and an upcoming report on the topic (see: here) and questions a number of the claimed justifications for maintaining Canada’s supply-managed dairy industry, including: food safety, price stability for consumers, protection from subsidized production abroad, protection of jobs and efficiency.
Some of the specific topics discussed in the Conference Board’s new research include higher prices for consumers (according to the Conference Board, about $276 per family for dairy products than consumers in other countries), impediments for farmer expansion and export (based on the slow-growing and regulation-constrained Canadian market) and negative impacts on dairy industry employment.
Antitrust & Associations: “Professional and Trade Association Codes of Ethics Can Lead To Antitrust Trouble”
February 25, 2014
Professional and trade associations contribute to the public welfare in many ways, including disseminating information, promoting research, developing standards and spurring industry initiatives. But such associations generally are composed primarily of actual or potential competitors, and sometimes seemingly benign conduct—including even actions intended to promote the ethical conduct of an association’s members—can have untoward consequences for third parties, association members and the association itself, including potential antitrust liability. The recent announcement by the Federal Trade Commission (FTC) of consent decrees entered into by two professional associations—the first representing music teachers, and the other representing legal support services providers—highlights this risk and the need for professional and trade associations to guard against their codes of ethics, and also their policies, standards, rules and procedures, being co-opted for potentially anticompetitive purposes.
Trade and professional associations always have had to guard against the possibility that some members might carry out concerted anticompetitive schemes through use of association meetings and processes. For example, in In re: Plasma-Derivative Protein Therapies Antitrust Litigation, Civ. No. 09-C-7666, MDL No. 2109 (N.D. Ill., Feb. 9, 2011), hospital groups claimed that medical product makers CSL Ltd. and Baxter International, and their co-defendant Plasma Protein Therapeutics Association (PPTA), took part in a conspiracy, including secret meetings among industry rivals carried out through and in coordination with PPTA, to artificially raise the price of plasma-derivative protein therapies and to shrink the supply of plasma products even as demand for them grew. In denying motions to dismiss, the district court rejected the defendants’ assertion that their alleged misdeeds could be innocently explained as the result of independent pricing and production decisions, finding that the complaint sufficiently and plausibly alleged that the market for plasma products was “ripe for collusion.” Thereafter, CSL announced that it and PPTA had settled, with news reports stating that CSL agreed to pay $64 million to exit the antitrust litigation.
Canadian Court Takes Measured Approach to Imposing $500,000 Civil Fine Against Rogers in Performance Claims Case
February 25, 2014
In an interesting and important decision issued by the Ontario Superior Court of Justice on February 21st, the Court has now imposed a $500,000 civil administrative monetary penalty (“AMP”) against Rogers for failing to have performed adequate and proper testing in some Canadian markets for performance claims made in relation to its Chatr Wireless brand (see: Canada (Commissioner of Competition) v. Chatr Wireless Inc., 2014 ONSC 1146).
While the liability decision in this case had been issued last summer (for a summary of some of the key points of the case see my earlier post: Rogers Largely Wins Landmark Chatr Misleading Advertising and Performance Claims Case and Canadian Lawyer comment earlier today: Rogers Escapes Steep Fine), the remedies were to be decided at a later date and have now been determined.
Auto Parts Investigation Rolls Along: Former Auto Parts Executive Sentenced to 1 Year in Prison for Deleting E-mails, Panasonic to Pay $4.5 M in Canada
February 20, 2014
In what can only be called a sobering reminder earlier today of the importance of not obstructing an ongoing criminal antitrust investigation, the U.S. Department of Justice announced that a former auto parts supplier executive has agreed to plead guilty for obstructing the U.S. authorities’ ongoing auto parts cartel investigation and serve jail time.
According to the DoJ, the former executive of Japan-based Denso Corporation has agreed to plead guilty to obstruction and serve a year and a day in U.S. prison for deleting e-mails and electronic documents in early 2010 after learning the FBI had executed a search warrant on Denso’s U.S. subsidiary. (In March, 2012, Denso pleaded guilty and was sentenced to pay a USD $78 million criminal fine for its role in conspiracies to fix the prices of heater control panels and electronic control units supplied to Toyota.)
Competition & Wireless: Want Your Say on Roaming, Wireless Regulation? CRTC Launches New Public Consultation
February 20, 2014
Earlier today, and close on the heels of the announcement of winners in the Government’s 700 MHz spectrum auction yesterday (see: here), the CRTC has announced that it is launching a new public consultation on the state of competition in the wholesale mobile wireless services market.
According to the CRTC’s announcement, it is interested in hearing from Canadians on: (i) the state of the market for wholesale mobile wireless services (including wholesale roaming and wholesale tower sharing); (ii) the impact that the wholesale mobile wireless services market has on the retail market; and (iii) whether greater regulatory oversight would be appropriate if it were to find that the wholesale mobile wireless services market is not sufficiently competitive.
Competition & Pharmaceuticals: New Publication: “Competition Issues in the Distribution of Pharmaceuticals” (Including Canada & U.S.)
February 20, 2014
As part of its upcoming Global Forum on Competition, the OECD has published an interesting new report on competition in the pharmaceuticals sector entitled Competition Issues in the Distribution of Pharmaceuticals. This new report, with submissions from Canada (the Competition Bureau) and United States (DoJ and FTC), includes discussions on a variety of competition/antitrust topics related to the distribution of brand and generic pharmaceticals.
The Canadian submission includes discussions on: the Canadian pharmaceutical sector, distribution of pharmaceuticals in Canada, activities that may raise competition/antitrust issues, brief summaries of the Competition Bureau’s past efforts in the pharmaceutical area (e.g., Canadian Generic Drug Sector Study) and statements of the Bureau’s enforcement and advocacy policies in the pharmaceutical sector.
New Competition Advocacy Initiative Announced by Canadian Competition Bureau: Toronto Taxi Regulation
February 18, 2014
Earlier today, the Competition Bureau announced Its most recent new competition advocacy initiative, relating to the regulation of the Toronto taxi industry (see: Competition Bureau Provides Submission to City of Toronto’s Taxicab Industry Review). The Bureau also issued a companion Submission by the Commissioner of Competition to the City of Toronto Taxicab Industry Review.
The key recommendations made in the Bureau’s newest competition advocacy initiative include Issuing new taxi licenses in Toronto and amending regulations to allow new cost-savings software applications to pay for motor vehicle transport services.
Trade Association Reportedly Used as Umbrella for Market Division, Output Restriction Cartel Agreement Among German Sugar Manufacturers
February 18, 2014
Earlier today, the German antitrust authority (Bundeskartellamt) announced that it had fined Germany’s three largest sugar manufacturers € 280 million in a market division / output restriction cartel case (see: Bundeskartellamt Imposes Fines on Sugar Manufacturers).
According to the Bundeskartellamt, the infringements related to an agreement among the three manufacturers over about a fifteen-year period to limit German sugar sales to their respective home sales areas and export sugar rather than sell to customers within competitors’ sales areas.
Bank of Canada’s Rules for Reproducing Canadian Bank Notes – Example of a Key Advertising Review Question: “Do We Own It”?
February 18, 2014
A lot of advertising law, both in Canada and other major jurisdictions, tends to revolve around two major themes: deception and ownership. As such, when it comes to reviewing advertising for compliance in Canada, a lot of issues (or potential issues) can be identified with two main questions: first, “is it true” (i.e., false or misleading)?; and second, “do we own it”?
I’ve written a lot about the first theme here over the past few years (e.g., the false and misleading advertising provisions of the Competition Act), but not so much about the second theme. On the second theme, a small question arose on a recent advertising review for a promotion for one of my clients. In their draft creative, they were proposing to reproduce images of Canadian currency.