Canadian COMPETITION & ANTITRUST LAW

On December 23, 2009, the Competition Bureau (the “Bureau”) issued its final Competitor Collaboration Guidelines (the “Collaboration Guidelines”).  The Collaboration Guidelines, which have been issued to coincide with the upcoming coming into force of Canada’s new criminal conspiracy rules and replace the Bureau’s earlier Strategic Alliances Guidelines, set out the Bureau’s enforcement approach to Canada’s new two-track criminal conspiracy regime under sections 45 and 90.1 of the federal Competition Act (the “Act”).

General Analytical Framework

In general, the Bureau states that mergers will be reviewed under the existing merger provisions of the Act and that most vertical agreements will be analyzed under the civil provisions of the Act (e.g., the new civil price maintenance and existing abuse of dominance provisions).  Exceptions may include dual distribution agreements (i.e., where a supplier may compete with one or more of its customers). 

With respect to determining whether to evaluate agreements under the criminal or civil track, the Bureau indicates that only naked restraints (i.e., bare price fixing, market allocation and output restriction agreements) will be reviewed under the new section 45.  With respect to the process for review of agreements under section 45 (hard-core criminal offences), the Bureau indicates that it will take the following approach: (i) determine whether to review the agreement/arrangement under the criminal or civil provisions, (ii) if reviewing an agreement under section 45, determine whether in its view the new ancillary restraints defence applies, (iii) where it determines that the ancillary restraints defence applies, it may still seek a remedy under the civil provision (section 90.1) or (iv) refer the matter to the Director of Public Prosecutions for prosecution.

Given that there will be no existing Canadian jurisprudence to interpret the new ancillary restraints defence when the new criminal cartel provisions come into force in March, 2010, in the first few years after the new provisions are in force American jurisprudence will be important to interpret the new provisions.  In this regard, the United States has had a two-track criminal cartel regime for over a century, with hard core agreements reviewed under a per se rule (encompassing for the most part bare price fixing agreements) and non-hard core agreements analyzed under a second separate “rule of reason” approach that considers the pro- and anti-competitive effects of challenged agreements.  Unlike Canada’s new regime, however, which has now expressly codified a two-track approach to criminal conspiracies, the United States has over a century of case law that has interpreted Section 1 of the Sherman Act that does not explicitly set out the categories that are proscribed.

Section 45 – Hard Core Anti-competitive Agreements

The Bureau indicates in its new Competitor Collaboration Guidelines that section 45 will be reserved for the review of hard core agreements (i.e., price-fixing, market allocation and output restriction agreements between competitors and potential competitors) while other types of agreements, such as joint venture agreements, will potentially be subject to review under the new civil provisions.

With respect to the existence of an agreement, the Bureau confirms existing jurisprudence (e.g., that there must be a “meeting of minds”, that informal or covert arrangements may be caught, a cartel may be established whether or not the arrangement has been implemented and that an agreement may be established based on only circumstantial evidence).  With respect to one of the most difficult and controversial areas of criminal cartels – i.e., “tacit agreements” or “conscious parallelism” – the Bureau takes the position that “parallel conduct coupled with facilitating practices, such as sharing competitively sensitive information … may be sufficient to prove that an agreement was concluded between parties.”  With respect to determining whether parties are competitors for the purposes of section 45, the Bureau confirms that the impugned agreement must be in relation to a product in relation to which the parties compete (or are likely to compete).

One of the most challenging issues likely to be faced by competition counsel will be what arguments can be made in situations of common control or where individuals or entities may reasonably be considered to be a single legal entity (and, therefore, that the conspiracy provisions should not apply).  Whereas the United States has developed an intra-enterprise doctrine, under which entities that are in fact a single legal entity may be immune from the application of the Sherman Act, it remains to be seen whether a similar doctrine will develop in Canada.  This is key considering that the exceptions under section 45, including the pre-existing bright line exception for agreements between affiliates, are relatively narrow and do not provide express exceptions for agreements in other types of commercial arrangements (e.g., for principals and agents, partnerships, etc.).   The Bureau does indicate, however, that there may be some latitude for arguing that parties in other types of commercial relationships may, despite the existence of an express exception, nevertheless be considered by the Bureau to be a single economic entity (which was not present in the Bureau’s earlier draft guidelines):

“Parties should note that this exception applies only to companies, and not partnerships, trusts or other non-corporate entities or individuals, although the Bureau will consider the nature of any common control or relationship between the parties when determining whether referral of an agreement for prosecution is appropriate.”

With respect to trade associations, the new Collaboration Guidelines indicate that there may be increased exposure for associations that facilitate anti-competitive agreements.  In this regard, the Bureau states that “rules, policies, by-laws or other initiatives enacted and enforced by an association with the approval of members who are competitors, are considered by the Bureau to be agreements between competitors for the purpose of section 45.”  The Bureau’s position that trade associations that facilitate anti-competitive agreements may be parties to the agreement is noteworthy for several reasons: first, there is little or no recent Canadian authority for this proposition; and second, it is not clear that many trade associations could be considered to compete (or potentially compete) with their members in order to fall within the horizontal prohibition under the new section 45.

With respect to dual distribution agreements, the Bureau indicates that it will review such agreements (i.e., arrangements where a supplier may compete with one or more of its distributors) under the civil provisions of the Act, not under the new criminal conspiracy provisions.

Finally, the Bureau indicates that it will generally not review the following types of (common commercial) ancillary restraints under the criminal provisions, but rather under the civil provisions: (i) non-compete clauses in employment agreements or asset/share agreements, (ii) agreements not to make material changes to a business prior to completing a merger and (iii) non-compete agreements between joint venture partners (where the restraint relates only to the products, services or territories covered by the joint venture).

Section 90.1 – Non-hard Core Anti-competitive Agreements

With respect to the application of the new civil provision (section 90.1) for non-hard-core anti-competitive agreements, the Bureau states that in general agreements that fall within this new provision will be reviewed in a manner consistent with mergers under the Bureau’s Merger Enforcement Guidelines (the “MEGs”).  For example, the Bureau adopts very similar market share safe harbours to those set out for parties to mergers in its MEGs:

“The Commissioner will not challenge an agreement under section 90.1 on the basis of: (i) a concern related to the exercise of market power by the parties to the agreement where the market share held by the parties represents less than 35% of the relevant market; or (ii) a concern related to a coordinated exercise of market power by firms in the relevant market where the share of the four largest firms in the relevant market is less than 65%, or the share of the parties to the agreement is less than 10% of the relevant market.”

Moreover, the Bureau sets out a similar analytical framework to that in the MEGs for mergers for considering whether parties possess market power, with factors including market shares, the likelihood of entry, foreign competition, barriers to entry and innovation.  The Bureau indicates that the new civil provision will be used to review six common forms of commercial agreements: (i) commercialization agreements, (ii) information sharing agreements, (iii) research and development agreements, (iv) joint production agreements, (v) joint purchasing agreements and (vi) non-compete agreements.  These six forms of agreements generally fall into two categories: (i) non-hard-core horizontal agreements whose effects require closer scrutiny (i.e., agreements other than bare price fixing, market allocation and output restriction agreements) and (ii) agreements that fall entirely outside the language of the new section 45 (e.g., upstream joint purchasing agreements).

As a practical matter, the introduction of a two-track regime for cartels in Canada will demand that both counsel and the Bureau engage in a more economic-based approach to reviewing agreements, particularly those challenged under the new section 90.1.

It will also mean that increased advocacy will be necessary to argue that some agreements, particularly those whose competitive effects may be unclear, fall either within the new ancillary restraints defence or within the new civil provision (as opposed to the criminal provisions).

CANADIAN COMPETITION LAW LINKS

For more information about Canadian competition law or our competition law services visit our Blog Homepage, Competition Law Services, Canadian Competition Law, Competition Act Amendments, Merger Control, Merger Control FAQs, Abuse of Dominance, Conspiracy,  Advertising and Marketing, Promotional Contests, Trade Associations, Refusal to Deal,  Investment Canada Act, Canadian Competition Law Compliance, Private Actions, Bid Rigging, Canadian Competition Law Resources, Competition Law Links or Global Competition Law and Policy pages or visit our website at www.NortonStewart.com.

CONTACT US

We provide Canadian competition law services to clients across Canada and internationally.  For more information about our Canadian competition law and consulting services contact us at steve@nortonstewart.com, info@competitionlawcanada.com or call us at +1 604 687 0555 or +1 778 867 5558.

DISCLAIMER

The materials and information on CANADIAN COMPETITION LAW are provided as legal information about Canadian competition law.  Reading and accessing this information does not create a lawyer-client relationship.  The information on our blog does not constitute legal advice or a legal opinion on any issue.  In addition, the information and materials on this website will change based on new competition law developments and, as such, may not be current as of the date of access.  As such, we take no responsibility for the accuracy or currency of the competition law information or materials on our blog, which should not be relied upon without receiving legal advice from competent legal counsel.

“Why India Needs Merger Review Now”

Excerpt from a submission to the Indian government on India’s proposed new merger control law

(Dr. Derek Ireland, wtih contributions from Steve Szentesi & Manish Agarwal)

India’s amended Competition Act, including the merger review provisions, was approved by the country’s Parliament in 2007, and enforcement of the abuse of dominance and anti-competitive agreement sections of India’s Competition Act began in the May 2009.  However, enforcement of merger review has been delayed because of business lobbying and the time needed to prepare merger regulations.  Once the current recession comes to an end, the next global merger wave will begin, and many domestic and cross-border transactions will involve companies and markets in the major developing country jurisdictions — starting with the higher growth and more dynamic economies such as India, China, Indonesia and Brazil.  A small but growing number of these domestic and cross-border transactions are expected to raise serious competition issues for developing economies.

The domestic and international business and legal communities are continuing to raise concerns that implementing the merger review section of India’s Competition Act will reduce merger activity and significantly delay and increase the cost of transactions that involve Indian companies.  However, empirical evidence indicates that merger review does not impede cross-border merger activity, the cost of merger review on average amounts to only about 0.1% of the total value of the transaction, and the vast majority of mergers are approved by competition authorities with minimal delay.        

It is imperative that India complete its merger regulations and begin proactive enforcement of merger review as soon as possible.  Otherwise, India will have no mechanism to block or modify mergers that will cause anticompetitive harm to its economy, and will have no influence on the many cross-border transactions reviewed by other competition law jurisdictions that will significantly affect India’s enterprises, consumers, farmers, markets and ability to compete in foreign markets.  Instead, India will continue to be subject to the merger review rules of in particular the more developed OECD jurisdictions. 

There are other fundamental reasons why India needs to implement merger review without delay.  Most importantly, India needs to begin enforcement of merger review in order to complete the triad of the inter-related pillars of the country’s modern competition law, which interact together, support each other and are much more than the sum of their parts.

The Inter-related “Triad” of India’s Modern Competition Law

Merger review prevents a major supplier from further dominating and entrenching itself in a domestic or global market, and from further strengthening its anticompetitive agreements with other suppliers through a merger or acquisition that eliminates a vigorous and effective competitor.  Without merger review, two or more firms that are now colluding or conducting abuse of dominance strategies in a coordinated manner can simply merge to avoid an expensive and embarrassing investigation and penalties under the other two sections.  Further delaying merger review in India increases the risks and high business, economic, social and possible political costs of divestiture, demerger and trying to “unscramble the scrambled eggs” of the merged entity, through applying the abuse of dominance section after the transaction is completed and the merged company is fully operational. 

Merger review prevents a multinational enterprise with a history of cartel activity and other anticompetitive conduct in the global market from entering India’s domestic market through acquiring an efficient local firm that is complying with competition rules.  These foreign-to-local mergers are at times used to “pre-empt” future entry and competition in domestic and global markets through preventing the efficient domestic firm from following through on its plans to expand and diversify into the global market. 

Delaying merger review, as well as overly permissive merger review enforcement, biases the entry decisions of multinational corporations in favour of mergers and acquisitions, and thus reduces greenfield investments that often generate greater benefits for competition, consumers and the total developing economy.  Finally, the expertise, skill development and learning that are created by conducting a complex merger investigation, will increase the quality of the competition agency’s investigations and enforcement actions against cartels, other anti-competitive agreements, and abuses of Dominant position.  Modern merger analysis gives special attention to post-merger coordinated effects that result from the creation or strengthening of a cartel, or similar collusive arrangement, as well as the unilateral effects that occur when the merger establishes or strengthens a dominant firm.  The assessment of existing anticompetitive conduct and effects before the transaction and the risk of unilateral and coordinated effects after the merger employ the same industrial organization models and analytical techniques that are used in investigations of anticompetitive agreements and abuses of dominant position.     

Further delaying merger review enforcement will cause considerable harm to competition, consumers and the credibility of India’s new competition law and agency.  In contrast, as noted at the outset, the costs of merger review to businesses, taxpayers and the economy are minimal when compared with the large assets and sales of the comparatively few merger transactions that are reviewed in detail by competition agencies.  India can further reduce these merger review costs and delays through adopting to the extent possible and desirable merger notification, review and clearance procedures that are similar to those applied in other major competition law jurisdictions.  These are summarized in the eight “Guiding Principles for Merger Notification and Review” prepared by the International Competition Network (ICN).

CANADIAN COMPETITION LAW LINKS

For more information about Canadian competition law or our competition law services visit our Blog Homepage, Competition Law Services, Canadian Competition Law, Competition Act Amendments, Merger Control, Merger Control FAQs, Abuse of Dominance, Conspiracy,  Advertising and Marketing, Promotional Contests, Trade Associations, Refusal to Deal,  Investment Canada Act, Canadian Competition Law Compliance, Private Actions, Bid Rigging, Canadian Competition Law Resources, Competition Law Links or Global Competition Law and Policy pages or visit our website at www.NortonStewart.com.

CONTACT US

We provide Canadian competition law services to clients across Canada and internationally.  For more information about our Canadian competition law and consulting services contact us at steve@nortonstewart.com, info@competitionlawcanada.com or call us at +1 604 687 0555 or +1 778 867 5558.

DISCLAIMER

The materials and information on CANADIAN COMPETITION LAW are provided as legal information about Canadian competition law.  Reading and accessing this information does not create a lawyer-client relationship.  The information on our blog does not constitute legal advice or a legal opinion on any issue.  In addition, the information and materials on this website will change based on new competition law developments and, as such, may not be current as of the date of access.  As such, we take no responsibility for the accuracy or currency of the competition law information or materials on our blog, which should not be relied upon without receiving legal advice from competent legal counsel.

The Ontario Superior Court has imposed a record CDN $15 million fine against Toronto-based company DataCom Marketing Inc., which operated a business directory scam targeting U.S. and Canadian businesses.

According to the Competition Bureau:

“Toronto-based DataCom contacted thousands of small and medium-sized businesses between 1994 and 2005, tricking businesses into believing that they had already ordered a business directory listing and using deceptive scripts and aggressive collection tactics. Victims lost hundreds of dollars each while the scam netted $12.9 million in profits.”

Canada’s new Commissioner of Competition said:

“We applaud the court’s decision … This is a clear signal to fraudulent telemarketers that their acts will be treated seriously by the courts. In turn, we, at the Bureau, will not hesitate to take action against fraudulent telemarketers when we uncover evidence that the law has been violated.”

According to the Bureau, DataCom’s founder and former president had been previously sentenced to two years in jail, three years probation and was subject to a ten year ban on telemarketing activities.

This most recent deceptive telemarketing case both highlights the potentially significant penalties under the federal Competition Act and that deceptive marketing remains a top enforcement priority for the Competition Bureau.

OUR MISLEADING ADVERTISING & MARKETING LAW SERVICES

We practice federal competition law, have provided competition law and compliance advice to clients across Canada and internationally and provide a full range of competition law services in relation to the criminal conspiracy, merger, abuse of dominance, misleading advertising and deceptive marketing provisions of the federal Competition Act.  Our misleading advertising and marketing law services include advice in relation to:

- The general misleading advertising provisions of the Competition Act.
- “Ordinary selling price” provisions (sales).
- Promotional contests.
- Multi-level marketing plans.
- Pyramid selling.
- Telemarketing.
- Deceptive prize notices.
- Double ticketing & bait and switch advertising.
- Performance claims & comparative advertising.
- Scope of the recent Competition Act amendments.
- Consumer packaging and labeling legislation.

CANADIAN COMPETITION LAW LINKS

For more information about Canadian competition law or our competition law services visit our Blog Homepage, Competition Law Services, Canadian Competition Law, Competition Act Amendments, Merger Control, Merger Control FAQs, Abuse of Dominance, Conspiracy,  Advertising and Marketing, Promotional Contests, Trade Associations, Refusal to Deal,  Investment Canada Act, Canadian Competition Law Compliance, Private Actions, Bid Rigging or Global Competition Law and Policy pages or visit our website at www.NortonStewart.com.

CONTACT US

We provide Canadian competition law services to Canadian and international clients.  For more information about our Canadian competition law and consulting services contact us at steve@nortonstewart.com, info@competitionlawcanada.com or call us on +1 604 687 0555 or +1 778 867 5558.

As a result of recent landmark amendments to the federal Competition Act (the “Act”), the impact of competition law on trade associations in Canada is now much more significant.  This article discusses some of the highlights of Canada’s new competition law and the impacts of the new criminal conspiracy provisions that will come into force in March, 2010.

The Competition Act & Trade Associations

There are no specific provisions of the Act dealing with trade associations.  However, some of the general provisions that are particularly relevant to trade association activities include the criminal conspiracy, bid rigging, misleading advertising, bid rigging and abuse of dominance provisions – all of which have recently changed.

In general, the types of association activities that can raise competition law issues include those dealing with pricing, customers, territories, market shares, terms of sale and advertising.  Some specific activities that can be problematic include fee guidelines, advertising restrictions, membership restrictions, association discipline, bylaws and rules relating to key aspects of competition and price fixing, market allocation and bid rigging agreements engaged in by association members.

New Criminal Conspiracy Rules

Significant new criminal conspiracy provisions will come into force in March.  Under the new rules, it will be possible to establish price fixing, market allocation and output restriction agreements (three types of “hard core” cartel agreements) without establishing any adverse market effects.

The primary impact of these changes will be that, whereas formerly market power was a prerequisite to establish a criminal conspiracy (i.e., that a cartel agreement prevented or lessened competition “unduly” in one or more relevant markets), under the new law, parties to an agreement with modest market shares may also be caught.  As such, trade association members that engage in price fixing, market allocation or boycott agreements (and potentially where associations facilitate such agreements) will face potentially increased criminal liability.

In addition, the penalties for criminal cartels will also more than double – with fines of up to $25 million fines and/or imprisonment for up to 14 years (increased from $10 million and 5 years).   The enforcement of the criminal conspiracy provisions also remains an enforcement priority for the Competition Bureau, which has indicated in recent public statements that it is increasingly interested in detecting domestic (i.e., Canadian) cartels.

New Penalties for Misleading Advertising

The false or misleading representation provisions of the Act are also highly relevant to trade associations and their members.  The Act contains both criminal and civil misleading advertising provisions, which apply to false or misleading representations made to promote the supply or use of a product or a business interest.    As a result of the recent amendments, contravention of these provisions will now potentially be subject to civil fines of up to $750,000 (for individuals) and $10 million (for corporations).

New Penalties for Abuse of Dominance

As a result of the recent landmark amendments, civil fines have been introduced for abuse of dominance for the first time in Canada of up to $10 million ($15 million for repeat contraventions).  Under the Act, abuse of dominance occurs where a dominant firm (or firms) has engaged in a practice of anti-competitive acts that has an intended negative effect on a competitor that is exclusionary, predatory or disciplinary, with the result that competition has been, is being or is likely to be prevented or lessened substantially.

Some of the types of trade association activities that can raise abuse of dominance issues include restricting access to essential services or markets and standard setting that may prevent or impede entry.

New Bid Rigging Law

Canada has a standalone bid rigging provision that applies where, in response to a call for tenders or bids, one or more bidders agrees not to submit a bid (or where two or more bidders agree to submit bids that have been prearranged).  These rules can be relevant to members of trade associations that are involved in competitive bids or tenders (e.g., the construction industry).  After the recent amendments, it is also now a criminal offence to agree to withdraw a bid that has already been made.

Trade Association Enforcement Guidelines

Finally, the Bureau has recently issued a new draft Information Bulletin on Trade Associations specifically dealing with the enforcement of the Act in relation to trade associations.  Together with its proposed new enforcement guidelines for competitor collaborations, the new trade association enforcement guidelines are expected to further alter the analysis of the application of Canadian competition law to the activities of trade associations and their members.

Impacts on Canadian Trade Associations

The landscape of Canadian competition law has drastically changed.  Some have said the recent amendments are the most significant in twenty-five years.  In our view, the changes are the most significant since Canada introduced competition law in 1889.  The impacts on Canadian firms and trade associations will be significant.  It remains to be seen, however, what the practical outcomes will be for Canadian firms and associations as a result both of the new rules and Competition Bureau and private enforcement.

OUR SERVICES FOR TRADE ASSOCIATIONS

We practice federal competition law, have provided competition law and compliance advice to clients across Canada and internationally and provide a full range of competition law services in relation to the criminal conspiracy, merger, abuse of dominance, misleading advertising and deceptive marketing provisions of the federal Competition Act.

We also regularly counsel Canadian trade associations on the application of the Competition Act to activities of trade associations and their members.  Some of the types of trade association activities that can, in some instances, raise criminal or civil competition law issues include fee tariffs or guidelines, advertising restrictions or guidelines, membership criteria and member expulsions, meetings and other events where competitively sensitive information is discussed, unilateral and concerted refusals to deal with competitors (including discounters and alternative business models) and some joint association activities including joint negotiation and lobbying.

Our Canadian competition law services for trade associations include:

- Competition law compliance programs for associations.
- Competition law compliance seminars and talks for association executives.
- Audits and compliance reviews of trade association activities.
- Advice on the application of the recently amended Competition Act.
- Vetting trade association meetings, conventions and communications.
- Reviewing trade association rules, bylaws, policies and voluntary codes.
- Advice in relation to joint association activities (e.g., joint negotiation).
- General competition law and competition compliance advice for associations.

CANADIAN COMPETITION LAW LINKS

For more information about Canadian competition law or our competition law services visit our Blog Homepage, Competition Law Services, Canadian Competition Law, Competition Act Amendments, Merger Control, Merger Control FAQs, Abuse of Dominance, Conspiracy,  Advertising and Marketing, Promotional Contests, Trade Associations, Refusal to Deal,  Investment Canada Act, Canadian Competition Law Compliance, Private Actions, Bid Rigging or Global Competition Law and Policy pages or visit our website at www.NortonStewart.com.

CONTACT US

We provide Canadian competition law services to Canadian and international clients.  For more information about our Canadian competition law and consulting services contact us at steve@nortonstewart.com, info@competitionlawcanada.com or call us on +1 604 687 0555 or +1 778 867 5558.

TRADE ASSOCIATIONS

OUR SERVICES

We practice federal competition law, have provided competition law and compliance advice to clients across Canada and provide a full range of competition law services in relation to the criminal conspiracy, merger, abuse of dominance, misleading advertising and deceptive marketing provisions of the federal Competition Act.  We regularly counsel trade associations and their executives and personnel on compliance with the Competition Act. Our Canadian competition law services for trade associations include:

- Trade association competition law compliance programs.
- Competition law compliance seminars and talks for association executives, boards and staff.
- Audits and compliance reviews of trade association activities.
- Advice on the application of the recently amended Competition Act to association and member activities.
- Vetting trade and professional association meetings, conventions and communications for compliance.
- Reviewing trade association rules, bylaws, policies and voluntary codes of conduct.
- General competition law and competition compliance advice for associations and their executives.

RECENT TRADE ASSOCIATION NEWS

Competition Bureau Announces Coming Into Force of Canada’s New Conspiracy Laws

New Canadian Laws for Agreements Between Competitors

Competition Bureau Continues Challenge of CREA MLS Rules

CREA MLS Abuse of Dominance Case

Competition Bureau Refuses to Vary Interac Consent Order

Interac Association Request to Vary Consent Order

Competition Bureau Issues Final Competitor Collaboration Guidelines

Competitor Collaboration Guidelines

OVERVIEW OF TRADE ASSOCIATIONS & THE COMPETITION ACT

Trade associations often serve many legitimate purposes, including promoting common interests to the public, lobbying, advocacy, research, education and promoting and improving product standards.  However, because trade association activities involve the interaction of direct competitors, associations can in some cases raise competition law issues under the federal Competition Act (the “Act”).

Recent public criminal and civil association investigations have involved the Saskatchewan Roofing Contractors Association and The Canadian Real Estate Association, among others.  There have also recently been historic amendments to the Act that have resulted in, among other things, significantly increased penalties for conspiracy (fines of up to $25 million and/or imprisonment for up to 14 years) and misleading advertising (with civil fines of up to $10 million for corporations).

In general, the types of association activities that can in some cases raise competition law issues include those dealing with pricing, advertising, customers, territories, market shares, terms of sale and other key aspects of competition.  Some of the specific association activities that can potentially raise issues include: (i) board and membership meetings, (ii) information exchanges (exchanges of competitively sensitive information), (iii) association rules and bylaws (e.g., mandatory or suggested fee guidelines, advertising restrictions, membership restrictions, member discipline and other rules relating to competitive aspects of member activities), (iv) dealing with members and discipline and (v) advertising or marketing restrictions.

Sections Relevant to Trade Associations

There are no specific sections of the Act dealing exclusively with trade associations.  However, some of the general sections that are particularly relevant to trade association activities include the criminal conspiracy, abuse of dominance, price maintenance and misleading advertising sections of the Act (discussed below).

Criminal Conspiracy

Section 45 of the Act, which is in many cases the most important section for trade associations, contains three criminal conspiracy offences.  The investigation and prosecution of criminal conspiracies is also a top enforcement priority for the Bureau.

Under section 45, three types of “hard core” anti-competitive agreements will be illegal as of March 12, 2010:

Price fixing agreements.  Section 45 will make it a criminal offence for competitors (or potential competitors) to fix, maintain, increase or control the price for the supply of a product (e.g., agreements to set prices, discounts, minimum prices or establish fee tariffs).  “Price” is broadly defined to include discounts, rebates, allowances and price concessions.  Based on the potential liability for price fixing agreements, it is important that prices, discounts and other aspects of price are determined independently by association members and that members do not discuss price or other competitively sensitive topics.

Market allocation/division agreements.  Section 45 will also makes it a criminal offence for competitors (or potential competitors) to allocate sales, territories, customers or markets for the production or supply of a product (e.g., agreements between competitors to not compete in relation to certain customers, groups or types of customers, in certain regions or market segments or in relation to certain types of transactions or products).

Supply restriction agreements.  Finally, section 45 will make it a criminal offence for competitors (or potential competitors) to fix, maintain, control, prevent, lessen or eliminate the production or supply of a product including services (e.g., agreements to limit the quantity or quality of products supplied, reduce the quantity of quality of products supplied to specific customers, limit increases in production or discontinue supply to specific customers or groups of customers).

In general, the risk for trade associations under the criminal conspiracy sections is twofold: (i) that an association itself may become a party (or be seen as aiding or abetting) to an anti-competitive agreement and (ii) that trade association members themselves may become parties to an anti-competitive agreement.

To establish these offences, it is not necessary to prove that there have been any negative effects on any particular market (i.e., the offences are “per se” offences, which means that merely establishing that there was an agreement and intent to enter the agreement is sufficient with no adverse market effects).

It is also not necessary to show that an agreement was ever carried out (i.e., the offence is in the agreement not in the implementation).  An agreement can also be established based merely on circumstantial evidence (i.e., while the existence of an agreement must be proven beyond a reasonable doubt, an actual written agreement does not need to be produced, which can be proven by other evidence – e.g., evidence of meetings among competitors followed by a stabilization of prices, etc.).

Finally, with respect to the criminal conspiracy offences, there will now be a new “ancillary restraints” defense, which will provide a defense where it can be shown that an agreement between competitors is: (i) ancillary to a broader agreement, (ii) is directly related to and reasonably necessary to give effect to the broader agreement and (iii) that the broader agreement does not itself constitute an offence under section 45.  While this new defense will likely apply to agreements that are either potentially pro-competitive (e.g., certain joint venture arrangements) or “on the line”, it will likely provide no defense to “hard core” anti-competitive agreements – i.e., bare price fixing, market division/allocation or output restriction agreements.

The penalties for violating the criminal conspiracy sections can be very severe and, as of March 12^th, will include fines of up to $25 million (per count), imprisonment for up to 14 years and/or “prohibition orders” to stop the conduct.  In addition, private parties that have suffered actual loss or damage as a result of criminal conduct under the Act (including s. 45 – criminal conspiracies), including competitors or customers, have the right to commence private civil damages actions.

Abuse of Dominance

Abuse of dominance is another section that potentially applies to trade associations and their activities.  Under sections 78 and 79 of the Act, abuse of dominance occurs where a dominant firm (or firms) in a market has engaged in or is engaging in a practice of anti-competitive acts that has an intended negative effect on a competitor that is exclusionary, predatory or disciplinary, with the result that competition has been, is being or is likely to be prevented or lessened substantially.

Evaluating whether conduct constitutes an abuse of dominance can be highly complex and require significant economic analysis.  Having said that, some of the types of trade association activities that can potentially raise abuse of dominance issues include efforts to restrict access to essential services or markets or setting educational, qualification or membership standards that result in impeding entry.

The penalties for abuse of dominance include “administrative monetary penalties” (essentially civil fines) of up to $10 million ($15 million for subsequent orders).

Price Maintenance

The new civil price maintenance sections of the Act can also, in some cases, be relevant to trade association activities.

The first type of price maintenance that is potentially relevant involves refusals to supply products (including services) or discriminate against other persons engaged in business based on their low pricing policy, where the conduct has an adverse effect on competition in a market.  The second type of price maintenance that is potentially relevant to association activities involves inducing a supplier, by agreement, threat, promise or any like means, as a condition of doing business with the supplier, to refuse to supply to another person based on the other person’s low pricing policy.

Where the elements for the new price maintenance sections are established, the Competition Tribunal (the “Tribunal”) may make an order prohibiting a person from engaging in the conduct.

Misleading Advertising

The false or misleading representation provisions of the Act (often referred to as “misleading advertising”) can be highly relevant to both trade associations and their members, depending on the level of advertising and marketing engaged in by an association and its members.

The Act contains both criminal and civil misleading advertising provisions, which apply to false or misleading representations made to promote the supply or use of a product, including services, or any business interest.  Subsection 74.01(1) of the Act contains the general civil prohibition against false or misleading representations:

“A person engages in reviewable conduct who, for the purpose of promoting, directly or indirectly, the supply or use of a product or for the purpose of promoting, directly or indirectly, any business interest, by any means whatever, makes a representation to the public that is false or misleading in a material respect.”

For a representation to be false or misleading, it must be shown that a representation has been made, to the public, to promote a product or business interest, that is literally false or misleading (or with a false or misleading “general impression”) and that the representation is “material” – i.e., likely to influence a consumer into buying or using the product or changing their conduct.

The criminal misleading advertising provision is substantially similar, but requires in addition to the above elements that a representation be made with intent (i.e., knowingly or recklessly).

The penalties for civil misleading advertising include “administrative monetary penalties” (essentially civil fines) of up to $750,000 (for individuals) or up to $10 million (for corporations), an order to cease the activity or an order to publish a corrective notice.  The penalties for criminal misleading advertising include fines up to $200,000 and/or imprisonment for up to one year (on summary conviction) or fines in the discretion of the court and/or imprisonment for up to 14 years (on indictment).

Based on the potential liability, it is prudent for trade associations and their members to ensure that they do not engage in false or misleading representations in their day-to-day business dealings and as well that associations ensure that their rules and bylaws do not encourage misleading advertising (or restrict legitimate pro-competitive advertising by members).

RECENT CANADIAN TRADE ASSOCIATION, CONSPIRACY & BID-RIGGING CASES

The following are some of the recent publicly reported Canadian trade association, conspiracy and bid-rigging cases that have involved Competition Bureau (the “Bureau”) investigations, penalties, court orders or settlements.

Canadian Real Estate Association Alleged Abuse of Dominance Case (2010)

Market:  Residential real estate services.

Overview:  Alleged abuse of dominance case. On February 8, 2010 the Bureau filed an abuse of dominance application with the federal Competition Tribunal (the “Tribunal”) alleging that MLS rules adopted by The Canadian Real Estate Association limit choice and prevent innovation in the market for residential real estate services nationally in Canada.  In particular, the Bureau is challenging MLS rules that it claims require that certain services be provided as a condition for real estate agents to list properties on local real estate boards’ MLS systems and that it claims limit consumer choice of residential real estate services.

The Bureau’s position is that CREA and its members have used their alleged control of the MLS system and related trademarks to impose exclusionary restrictions impacting the supply of residential real estate brokerage services and as a result have limited alternative real estate services business models in the market.

This case is interesting for a number of reasons, including that, if a decision is issued by the Tribunal, it would be the first Canadian “essential facilities” case to be decided on its merits (i.e., a case dealing with whether and under what terms access to an important asset, or “essential facility”, must be granted).

Result:  CREA filed its response on March 26, 2010.  The case is currently ongoing.

Quebec Street Lights Tender Bid-rigging Case (2010)

Market:  Contracting services.

Overview:  The defendants in this case were accused of bid-rigging in relation to a call for bids for a street light project.

Result:  The corporate defendant was fined $50,000 and two individual defendants were sentenced to a ten year prohibition order.

Quebec Retail Gasoline Price-Fixing Case (2008–2009)

Market:  Retail gasoline.

Overview:  Price-fixing conspiracy case.  In 2008 charges were laid against 13 individuals and 11 companies accused of fixing retail gasoline prices at the pump in Victoriaville, Thetford Mines, Magog and Sherbrooke, Quebec.

Result:  As of December, 2009, 10 individuals and six companies pleaded guilty in this case with total fines imposed of more than $2.7 million.  Les Pétroles Therrien Inc. and Distributions Pétrolières Therrien Inc. were fined $179,000, Ultramar Ltée was fined $1.85 million and Jacques Ouellet was fined $50,000.

Of the ten individuals that pleaded guilty, 6 were sentenced to terms of imprisonment.

This case is noteworthy in that it involves one of the high priority sectors for the Bureau (retail gasoline) as well as being a recent example of where the sentences involved imprisonment (served in the community).

Air Cargo Price-fixing Case (2009)

Market:  Air cargo services.

Overview:  International price-fixing case in relation to surcharges for air cargo exported on certain routes from Canada.

Result:  On October 30, 2009 the Bureau announced that British Airways Plc (“BA”) had pleaded guilty in the Federal Court and was fined $4.5 million for its participation in an air cargo cartel affecting Canada.  In particular, BA admitted to fixing surcharges relating to the sale and supply of international air cargo exported on particular routes from Canada between 2002 and 2006.  In this case, each of BA, Air France, KLM, Martinair and Quantas pleaded guilty to fixing surcharges on the sale and supply of international air cargo.  The total fines imposed in this case were more than $14.6 million (Air France: $4 million; KLM: $5 million; Martinair: $1 million; Qantas: $155,000; BA: $4.5 million).

This case is noteworthy for the significant penalties imposed as well as highlighting that the investigation of cartels remains a top enforcement priority for the Bureau.

Interac Association Abuse of Dominance Case (1996, 2010)

Market:  ATM services.

Overview:  Alleged abuse of dominance case (variation of Consent Order).

Result:  The Interac Association requested that the Commissioner of Competition (the “Commissioner”) consent to vary a 1996 Consent Order to permit Interac to restructure from a not-for-profit association structure to a for-profit model.  The Consent Order in this case included, among other things, terms relating to membership requirements of the Interac Association and fees.  The Bureau refused to remove certain “safeguards” in the Consent Order and stated that it did “not agree that the removal of the restriction against for-profit activities by Interac would be pro-competitive, or is necessary to allow Interac to remain competitive.”

This case is interesting in that it involves issues relating to access and terms of use for an “essential facility” (in this case a shared electronic network services network established by the Interac Association).

Saskatchewan Roofing Contractors Association Alleged Bid-riggina and Conspiracy Case (2009)

Market:  Roofing contracting services.

Overview:  Alleged bid-rigging and conspiracy case.

Result:  On June 22, 2009 the Bureau announced that a court order had been issued prohibiting the Saskatchewan Roofing Contractors Association from taking any action directed towards the commission of an offence under the conspiracy or bid-rigging provisions of the Competition Act (the “Act”).  The order was a result of allegations that some members of the association had discussed not submitting bids in response to a request for tenders for a roofing project in Saskatchewan.  The order also requires the association to educate its members on the relevant provisions of the Act and terms of the order, and requires the association’s members, as a condition of membership, to acknowledge in writing that they will comply with the association’s corporate compliance program.

This case is noteworthy as a recent example of the Bureau’s continued interest in ensuring that Canadian trade and professional associations comply with the Act, as well as indicating that the criminal conspiracy and bid- rigging provisions of the Act remain top enforcement priorities for the Bureau.

Newfoundland School Bus Operators Alleged Price-fixing Case (2009)

Market:  School bus services.

Overview:  Alleged market division and price-fixing case involving school bus services in and around St. John’s Newfoundland and Labrador. This case involved allegations that the parties had entered into agreements to divide the market and fix prices for school bus services and allegations of bid-rigging activities between 2001 and 2003.

Result: In February, 2009 the Bureau announced that it had obtained two prohibition orders against 14 companies and 18 individuals operating school bus services.

Federal Government IT Contracts Alleged Bid-rigging Case (2009)

Market:  IT services.

Overview:  In February, 2009 the Bureau announced that criminal charges had been laid against 14 individuals and 7 companies accused of rigging bids to obtain Government of Canada contracts for information technology services.  The Bureau stated that it had discovered evidence indicating that several IT services companies in the National Capital Region had been secretly coordinating their bids to “defraud the government by winning and dividing contracts, while blocking out honest competitors.”

Result:  One individual pleaded guilty to one count of bid-rigging, another individual (the former owner of TRM Technologies Inc.) pleaded guilty and was fined $25,000 and a prohibition order was issued against TRM Technologies Inc.

International Hydrogen Peroxide Price-fixing Case (2008)

Market:  Hydrogen peroxide.

Overview:  International price-fixing case.

Result:  In November, 2008, the Bureau announced that Akzo Nobel Chemicals International BV had pleaded guilty and was ordered to pay a fine of $3.15 million in relation to fixing the price of hydrogen peroxide sold in Canada.  The Bureau stated that in its investigation it benefited from the cooperation of an immunity applicant under its formal Immunity Program.

International Rubber and Chemicals Price-fixing Conspiracy (2007)

Market:  Rubber and chemicals industry.

Overview:  Charges under section 45 of the Act relating to price-fixing conspiracies in the rubber and chemicals industry.

Result:  On October 30, 2007, Bayer Group pleaded guilty for its participation in three cross-border price-fixing conspiracies.  Bayer AG was fined $2.9 million for its participation in the rubber chemical conspiracy and $400,000 for its participation in the nitrite rubber conspiracy.  Bayer corporation was fined $345,000 for the aliphatic polyester polyols conspiracy.

International Graphite Electrodes Price-fixing Case (2007)

Market:  Graphite electrodes.

Overview:  International price-fixing case.

Result:  In November, 2007 the Bureau announced that SEC Carbon Ltd. (“SEC”) pleaded guilty to participating in a conspiracy in the graphite electrodes market and was fined $250,000.  SEC was the eighth party to be convicted in Canada in this case where total fines imposed were about $25 million.

Fort McMurray Auto Body Shops Alleged Price-fixing Case (2007)

Market:  Auto body services.

Overview:  Alleged price-fixing case involving auto body services.

Result:  In February, 2007, the Bureau announced that a settlement was reached with six auto body shops in Fort McMurray.

The parties agreed to a binding court order that prohibited the six companies from: (i) engaging in communications relating to pricing or services and (ii) entering into agreements relating to pricing of products or services to customers or insurance companies. The companies were also required to publish a corrective notice outlining key terms of the court order and were required to implement a competition law compliance program.

COMPETITION LAW AND ASSOCIATIONS – LINKS AND RESOURCES

For competition law and associations links and resources see:

Trade Association Resources – Canada

Trade Association Resources – United States

Trade Association Resources – Europe

Trade Association Resources – International

OUR SERVICES FOR TRADE ASSOCIATIONS

We practice federal competition law, have provided competition law and compliance advice to clients across Canada and internationally and provide a full range of competition law services in relation to the criminal conspiracy, merger, abuse of dominance, misleading advertising and deceptive marketing provisions of the federal Competition Act.

We also regularly counsel Canadian trade associations on the application of the Competition Act to activities of trade associations and their members.  Some of the types of trade association activities that can, in some instances, raise criminal or civil competition law issues include fee tariffs or guidelines, advertising restrictions or guidelines, membership criteria and member expulsions, meetings and other events where competitively sensitive information is discussed, unilateral and concerted refusals to deal with competitors (including discounters and alternative business models) and some joint association activities including joint negotiation and lobbying.

Our Canadian competition law services for trade associations include:

- Competition law compliance programs for associations.
- Competition law compliance seminars and talks for association executives.
- Audits and compliance reviews of trade association activities.
- Advice on the application of the recently amended Competition Act.
- Vetting trade association meetings, conventions and communications.
- Reviewing trade association rules, bylaws, policies and voluntary codes.
- Advice in relation to joint association activities (e.g., joint negotiation).
- General competition law and competition compliance advice for associations.

CANADIAN COMPETITION LAW LINKS

For more information about Canadian competition law or our competition law services visit our Blog Homepage, Competition Law Services, Canadian Competition Law, Competition Act Amendments, Merger Control, Merger Control FAQs, Abuse of Dominance, Conspiracy,  Advertising and Marketing, Promotional Contests, Trade Associations, Refusal to Deal,  Investment Canada Act, Canadian Competition Law Compliance, Private Actions, Bid Rigging or Global Competition Law and Policy pages or visit our website at www.NortonStewart.com.

CONTACT US

We provide Canadian competition law services to Canadian and international clients.  For more information about our Canadian competition law and consulting services contact us at steve@nortonstewart.com, info@competitionlawcanada.com or call us on +1 604 687 0555 or +1 778 867 5558.

CLE Seminar – Canada’s New Competition & Foreign Investment Law 2010

Steve Szentesi will be chairing and speaking and Tom Hakemi will be speaking at an upcoming Continuing Legal Education BC competition law seminar in the spring – Canada’s New Competition & Foreign Investment Law 2010.  This upcoming half day practitioner-oriented seminar, which will be held on March 18th (one week after the last of the amendments come into force),  will review the major amendments to Canada’s competition and foreign investment law.  The changes include amendments to the merger, criminal conspiracy, abuse of dominance, misleading advertising and criminal pricing provisions of the Competition Act.  Also included will be a review of the recent changes to Canada’s Investement Canada Act and adoption of a national security test for foreign investment in Canada.  Steve and Tom will be speaking on Canada’s new U.S. style two-track criminal conspiracy regime and impacts on Canadian and international companies, trade associations and private competition law actions and class actions in Canada.

Recent & Upcoming Publications

- Contribution to a submission to the Indian government on merger control in India (Derek Ireland author) (2010)
- “Convergence and Canada’s New Merger Control Regime”, paper presented at joint WCCG and IAL Conference, Delhi, India (2009)
- “Competition Law & Trade Associations”, Boardwalk newsletter (December, 2009)
- “Canada’s Competition Act Amendments”, the Advocate (spring 2010)
- “Competition Act Amendments Impact Trade Associations”, Lawyers Weekly (January, 2010)
- Competition Law & REALTORS, Aliance for Canadian Real Estate Education compliance book (spring 2010)

Canada’s New Criminal Conspiracy Rules

On March 12, 2010 new criminal conspiracy rules will come into force that are the most significant changes to Canada’s cartel rules in a hundred years.  This update highlights the new rules, impacts on Canadian and international companies, trade associations  and competition law private civil actions.

The changes to Canada’s conspiracy rules will be the most significant in a century.  Some of the changes include the adoption of a “two-track” conspiracy regime (with a criminal track for “hard core” agreements – i.e., price fixing, market allocation and output restriction agreements) and separate civil track for non-hard core agreements that prevent or lessen competition substantially. 

The penalties for contravening the new criminal conspiracy rules will also be substantially increased with fines of up to $25 million and/or imprisonment for up to 14 years (increased from $10 million and 5 years).

Some of the key impacts include: (i) increasing the importance for trade associations and companies to review existing or adopt new competition law compliance programs, (ii) substantially increasing the risk associated with “hard core” cartel agreements based on the lower legal burden and significantly higher penalties, (iii) the introduction of a U.S.-style ancillary restraints defence, which will be relevant for the preparation and review of some types of agreements (e.g., joint venture agreements), (iv) altering the review of many types of common commercial agreements between competitors and potential competitors (e.g., franchise, joint venture, licence and dual distribution agreements) and (v) increasing the importance of reviewing and controlling information exchanges with competitors (i.e., exchanges of competitively sensitive information).

Impacts on Private Actions

The upcoming changes are also expected to lead to an increased number of private civil actions (and potentially competition law class actions) as a result of the lower bar to establish criminal price fixing, market allocation and output restriction agreements.

Other Recent Amendments

The impending changes to Canada’s criminal conspiracy rules are part of recent sweeping amendments to Canada’s Competition Act.  Some of the other key changes include: (i) a two-track U.S.-style merger notification regime, (ii) increased penalties for failure to comply with the merger notification provisions, (iii) increased penalties for misleading advertising up to $10 million for corporations, (iv) penalties for abuse of dominance up to $10 million, (v) amendments to the Investment Canada Act and (vi) adoption of a national security test for foreign investment.

CANADIAN COMPETITION LAW LINKS

For more information about Canadian competition law or our competition law services visit our Blog Homepage, Competition Law Services, Canadian Competition Law, Competition Act Amendments, Merger Control, Merger Control FAQs, Abuse of Dominance, Conspiracy,  Advertising and Marketing, Promotional Contests, Trade Associations, Refusal to Deal,  Investment Canada Act, Canadian Competition Law Compliance, Private Actions, Bid Rigging, Canadian Competition Law Resources, Competition Law Links or Global Competition Law and Policy pages or visit our website at www.NortonStewart.com.

CONTACT US

We provide Canadian competition law services to clients across Canada and internationally.  For more information about our Canadian competition law and consulting services contact us at steve@nortonstewart.com, info@competitionlawcanada.com or call us at +1 604 687 0555 or +1 778 867 5558.

DISCLAIMER

The materials and information on CANADIAN COMPETITION LAW are provided as legal information about Canadian competition law.  Reading and accessing this information does not create a lawyer-client relationship.  The information on our blog does not constitute legal advice or a legal opinion on any issue.  In addition, the information and materials on this website will change based on new competition law developments and, as such, may not be current as of the date of access.  As such, we take no responsibility for the accuracy or currency of the competition law information or materials on our blog, which should not be relied upon without receiving legal advice from competent legal counsel.

The Competition Bureau announced yesterday that another individual has pleaded guilty to criminal charges under the federal Competition Act for conspiring to fix the price of gasoline at the pump in Quebec (Sherbrooke).  According to the Bureau, Michel Dubreuil, who was a former owner of two stations under the Esso banner in Sherbrooke, was sentenced to six months in jail (to be served in the community, based on his having no prior criminal record).  Mr. Dubreuil was also ordered to make a $25,000 donation to charity.  To date, charges have been laid against thirteen individuals and eleven companies accused of fixing the price of retail gas at the pumps in Quebec (Victoriaville, Thetford Mines, Magog and Sherbrooke).  As of yesterday, fines in this matter have totalled over $2.7 million.

This recent gasoline case shows both that the Bureau is sensitive to consumer perception of price fixing of retail gasoline in Canada (this is presumably a deterrent setting case), as well as the Bureau’s increased interest in detecting domestic criminal cartels.  It will remain to be seen whether, and to what extent, enforcement increased following the coming into force of the new criminal conspiracy provisions under the Competition Act in March, 2010 (which will result in three new “per se” criminal offences prohibiting “hard core” price fixing, market allocation/division and output restriction agreements, together with increased penalties of criminal fines up to $25 million and/or imprisonment for up to 14 years).

CANADIAN COMPETITION LAW LINKS

For more information about Canadian competition law or our competition law services visit our Blog Homepage, Competition Law Services, Canadian Competition Law, Competition Act Amendments, Merger Control, Merger Control FAQs, Abuse of Dominance, Conspiracy,  Advertising and Marketing, Promotional Contests, Trade Associations, Refusal to Deal,  Investment Canada Act, Canadian Competition Law Compliance, Private Actions, Bid Rigging, Canadian Competition Law Resources, Competition Law Links or Global Competition Law and Policy pages or visit our website at www.NortonStewart.com.

CONTACT US

We provide Canadian competition law services to clients across Canada and internationally.  For more information about our Canadian competition law and consulting services contact us at steve@nortonstewart.com, info@competitionlawcanada.com or call us at +1 604 687 0555 or +1 778 867 5558.

DISCLAIMER

The materials and information on CANADIAN COMPETITION LAW are provided as legal information about Canadian competition law.  Reading and accessing this information does not create a lawyer-client relationship.  The information on our blog does not constitute legal advice or a legal opinion on any issue.  In addition, the information and materials on this website will change based on new competition law developments and, as such, may not be current as of the date of access.  As such, we take no responsibility for the accuracy or currency of the competition law information or materials on our blog, which should not be relied upon without receiving legal advice from competent legal counsel.

The federal Competition Bureau has begun issuing “Competition Bureau Updates” with summaries of recent enforcement matters.  Highlights of the Bureau’s November Update include:

Quebec Gasoline Cartel

According to the Bureau, proceedings in relation to the Quebec gasoline cartel case are ongoing.  The Bureau has announced that Canada’s Director of Public Prosecutions has filed a motion in the Quebec Court of Appeal to appeal the sentence of Daniel Drouin that was handed down in August (Mr. Drouin received an absolute discharge and made a $10,000 charitable donation).

Guilty Pleas in Deceptive Telemarketing Case

According to the Bureau, three individuals have pleaded guilty to deceptive telemarketing charges in relation to the promotion of business directories.  The individuals in this case were prohibited from engaging in telemarketing for ten years as well as a six month conditional sentence and restrictive curfew conditions.

Competition Bureau Internet Sweep

The Bureau, together with members of the International Consumer Protection and Enforcement Network, conducted an Internet sweep to detect fraudulent and misleading Internet websites.  The Bureau stated that whereas last year’s sweep resulted in over 37,000 Internet websites marked for further investigation (by the 21 participating countries), the Bureau focused its sweep this year on loan and grant schemes.

Prison Sentence in Mass Marketing Fraud Case

The Bureau has announced that two individuals involved in a cross-border mass marketing scheme have been sentenced to three years in prison for fraud related offences and six months for possession of stolen property.  According to the Bureau, their company (Aid4Families) conducted Internet advertising guaranteeing high monthly returns for investors, collecting more than $500,000 from U.S. residents.

These most recent announcements by the Bureau illustrate that criminal cartels and deceptive marketing remain enforcement priorities for the Bureau.  It will remain to be seen whether Bureau enforcement (and private action activity) increases following the coming into force of the new criminal cartel rules in March, 2010.

CANADIAN COMPETITION LAW LINKS

For more information about Canadian competition law or our competition law services visit our Blog Homepage, Competition Law Services, Canadian Competition Law, Competition Act Amendments, Merger Control, Merger Control FAQs, Abuse of Dominance, Conspiracy,  Advertising and Marketing, Promotional Contests, Trade Associations, Refusal to Deal,  Investment Canada Act, Canadian Competition Law Compliance, Private Actions, Bid Rigging, Canadian Competition Law Resources, Competition Law Links or Global Competition Law and Policy pages or visit our website at www.NortonStewart.com.

CONTACT US

We provide Canadian competition law services to clients across Canada and internationally.  For more information about our Canadian competition law and consulting services contact us at steve@nortonstewart.com, info@competitionlawcanada.com or call us at +1 604 687 0555 or +1 778 867 5558.

DISCLAIMER

The materials and information on CANADIAN COMPETITION LAW are provided as legal information about Canadian competition law.  Reading and accessing this information does not create a lawyer-client relationship.  The information on our blog does not constitute legal advice or a legal opinion on any issue.  In addition, the information and materials on this website will change based on new competition law developments and, as such, may not be current as of the date of access.  As such, we take no responsibility for the accuracy or currency of the competition law information or materials on our blog, which should not be relied upon without receiving legal advice from competent legal counsel.

In an announcement yesterday, Paul Crampton, formerly a partner in the competition and antitrust law group at Oslers in Toronto, has been appointed to the Federal Court of Canada.  The Financial Post stated:

“… Mr. Crampton has counselled clients on a range of trade issues, including international mergers and the impact of the Investment Canada Act on deals.  The author of legal text Mergers and the Competition Act, Mr. Crampton joins the Federal Court, which hears competition and trade cases, at a time when Canada has revamped its competition laws and many speculate there will be an increase in litigation.  As well, the Investment Canada Act has come under fire over some recent mergers, including the divestment of Nortel’s assets to foreign players and the legislation is at the centre of a dispute between the federal government and U.S. Steel over the closing of much of its Ontario operations earlier this year.”

Having worked with Paul in Toronto, we congratulate him on his new appointment and wish him all the success in his new role.

CANADIAN COMPETITION LAW LINKS

For more information about Canadian competition law or our competition law services visit our Blog Homepage, Competition Law Services, Canadian Competition Law, Competition Act Amendments, Merger Control, Merger Control FAQs, Abuse of Dominance, Conspiracy,  Advertising and Marketing, Promotional Contests, Trade Associations, Refusal to Deal,  Investment Canada Act, Canadian Competition Law Compliance, Private Actions, Bid Rigging, Canadian Competition Law Resources, Competition Law Links or Global Competition Law and Policy pages or visit our website at www.NortonStewart.com.

CONTACT US

We provide Canadian competition law services to clients across Canada and internationally.  For more information about our Canadian competition law and consulting services contact us at steve@nortonstewart.com, info@competitionlawcanada.com or call us at +1 604 687 0555 or +1 778 867 5558.

DISCLAIMER

The materials and information on CANADIAN COMPETITION LAW are provided as legal information about Canadian competition law.  Reading and accessing this information does not create a lawyer-client relationship.  The information on our blog does not constitute legal advice or a legal opinion on any issue.  In addition, the information and materials on this website will change based on new competition law developments and, as such, may not be current as of the date of access.  As such, we take no responsibility for the accuracy or currency of the competition law information or materials on our blog, which should not be relied upon without receiving legal advice from competent legal counsel