Canadian COMPETITION & ANTITRUST LAW

Telemarketing. Competition Act, section 52.1:  “’telemarketing’ means the practice of using interactive telephone communications 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.” Competition Bureau, Enforcement Guidelines, Telemarketing – Section 52.1 of the Competition Act: “’Interactive telephone conversations’ will be interpreted as live voice communications between two or more persons.  The Bureau will not consider ‘interactive telephone communications’ to have occurred with regard to: fax communications; Internet communications; or a customer’s interaction with automated prerecorded messages.”

Tied selling. Competition Act, section 77:  “’tied selling’ means  (a) any practice whereby a supplier of a product, as a condition of supplying the product (the ‘tying’ product) to a customer, requires that customer to (i) acquire any other product from the supplier or the supplier’s nominee, or (ii) refrain from using or distributing, in conjunction with the tying product, another product that is not of a brand or manufacture designated by the supplier or the nominee, and (b) any practice whereby a supplier of a product induces a customer to meet a condition set out in subparagraph (a)(i) or (ii) by offering to supply the tying product to the customer on more favourable terms or conditions if the customer agrees to meet the condition set out in either of those subparagraphs.”  U.S. Federal Trade Commission, Guide to the Antitrust Laws: “Offering products together as part of a package can benefit consumers who like the convenience of buying several items at the same time. Offering products together can also reduce the manufacturer’s costs for packaging, shipping, and promoting the products. … For competitive purposes, a monopolist may use forced buying, or “tie-in” sales, to gain sales in other markets where it is not dominant and to make it more difficult for rivals in those markets to obtain sales. This may limit consumer choice for buyers wanting to purchase one (“tying”) product by forcing them to also buy a second (“tied”) product as well.  Typically, the “tied” product may be a less desirable one that the buyer might not purchase unless required to do so, or may prefer to get from a different seller. If the seller offering the tied products has sufficient market power in the “tying” product, these arrangements can violate the antitrust laws.  Northern Pacific Railway v. United States, 356 U.S. 1 (1958): Tying is “an agreement by a party to sell one product [the tying product] but only on the condition that the buyer also purchases a different (or tied) product, or at least agrees that he will not purchase that product from any other supplier.”  “[Tying arrangements] deny competitors free access to the market for the tied product, not because the party imposing the tying requirements has a better product or lower price but because of his power or leverage in another market.  At the same time buyers are forced to forego their free choice between competing products.”

Timing agreement.  A type of agreement sometimes entered into between merging parties and the Competition Bureau in the context of merger review.  In general, merging parties in Canada may complete a transaction that is reviewable by the Bureau when: (i) clearance is received (i.e., an advance ruling certificate or “ARC” or a “no action letter”) or (ii) the applicable waiting period(s) have elapsed, subject to the Bureau having obtained an injunction (i.e., an interim order under section 100 of the Competition Act) prohibiting the parties from completing or where parties have entered into a timing agreement with the Bureau.  Timing agreements may include a variety of commitments, including obligations to provide the Bureau with additional information to review the merger, the timing for completion and advance notice of completion.  See Competition Bureau, Merger Review Process Guidelines.