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September 30, 2013

The Canadian Bar Association’s annual Fall Competition Law Conference is quickly approaching and, as usual, this is the time of year that Competition Bureau announcements typically accelerate (coinciding with the conference).

In this regard, in addition to the Bureau’s announcement last week that it had updated and expanded its Immunity and Leniency FAQs, the Bureau made a number of new announcements today relating to its price maintenance case against Visa/MasterCard, confidential information policy and online children’s advertising:

No Appeal on Credit Cards Case

The Bureau announced today that it would not be appealing to the Federal Court its recent Competition Tribunal loss in the Visa/MasterCard price maintenance case.  In making the announcement, the Bureau merely stated that it would be “exploring other avenues to protect Canadians by promoting competition” in the Canadian credit card market.  In dismissing the Bureau’s application, the Tribunal strongly indicated that the Bureau should be pursuing regulatory change (not enforcement) in the credit card fee market:

“However, this is an exceptional case and we are convinced that it makes more sense to begin with a regulatory approach rather than to back into it.  A section 76 Order would be a blunt instrument and there will be technical hitches, unforeseen consequences, a need for ongoing adjustment and stakeholder consultation.  The experience in other jurisdictions such as Australia and the United Kingdom shows that concerns will be raised by consumers regarding surcharging and possible gouging, and rather sooner than later, intervention will have to take place by way of regulation.”

The Tribunal held that the fundamental defect in the Bureau’s price maintenance theory against Visa and MasterCard was a failure to show any resale of a product, as required by the amended price maintenance provision of the Competition Act (section 76).  For my earlier post on this decision see: here.

The Bureau has recently been discussing its desire to “strategically intervene” in regulated markets for more competition (see e.g., the Bureau’s recent advocacy consultation announcement and Commissioner speeches – see: here, here, here and here).  There have also been calls generally for the Bureau to more actively engage in competition advocacy in regulated sectors (see e.g., the recent C.D. Howe Institute report: here).

So it may be that the Bureau elects to pursue an advocacy route (i.e., legislative change) to remedy what it perceives to be anti-competitive effects in the credit card market.  With as much as 25% of the Canadian economy regulated by the Bureau’s own estimation, and increasing criticism of insulated Canadian domestic markets, it appears that the Bureau may have a fairly wide choice of regulated markets in which it may intervene.

Annual Online Deceptive Advertising Sweep (This Year: Children’s Advertising)

The Competition Bureau generally conducts annual (or more frequent) deceptive marketing Internet sweeps.  Earlier today, it announced that it was once again coordinating a joint deceptive marketing Internet sweep with ICPEN (the International Consumer Protection and Enforcement Network).  This particular sweep involves online children’s games and apps (“targeted misleading and inadequate information disclosure in the content of children’s online games and applications”).  In making the announcement, the Bureau said:

“The goal of this year’s sweep is to increase awareness of how vulnerable children can be when exposed to misleading and inadequate information disclosure in the content of online games and applications.  The sweep will also facilitate further action by each agency, from education to enforcement, in light of the information gathered.”

Deceptive online children’s advertising, privacy, video game and app issues have also recently been the subject of review by other international agencies, including the U.S. FTC (see: here, here, here and here) and the U.K. OFT (see: here and here).  Some of the Bureau’s past online misleading advertising sweeps have included online and mobile fraud in 2012 (see: here), social media sites in 2010 (see: here), loan and grant schemes in 2009 (see: here) and misleading online health claims in 2007.

Updated Competition Bureau Confidentiality Bulletin

The Bureau also announced today that it has updated its Confidentiality Bulletin.

The Bureau’s Confidentiality Bulletin sets out the Bureau’s policy in relation to a variety of confidential information related topics including: section 29 of the Competition Act (which governs the Bureau’s use of confidential information provided to it, both voluntarily and through compulsory production, such as search warrants); cooperation with other Canadian law enforcement agencies; sharing information with foreign antitrust enforcement agencies; information provided to the Bureau under its Immunity and Leniency Programs; the whistleblower provisions of the Act; and access to information requests.

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