COMPETITION & ANTITRUST LAW » News

Mobilicity Files Competition Bureau Complaint Against Rogers

admin — Thu, 09 Sep 2010 13:22:25 +0000

The Globe and Mail has reported that new Canadian cellphone player Mobilicity has filed a complaint against Rogers with the federal Competition Bureau. According to the Globe, Mobilicity has filed the complaint in relation to what is alleging is anti-competitive behaviour from Rogers, in particular in relation to Rogers’ new discount cellphone brand Chatr Wireless Inc.

The Globe reported:

“The Toronto-based company, which launched service in May after bidding on new wireless licenses in 2008, has alleged that Rogers’ creation of a new discount cellphone brand, Chatr Wireless Inc., is in “direct breach” of section 78 of the Competition Act.

That section of the act prohibits dominant players in any given industry from using “fighting brands,” which are often called flanker brands in the telecom industry, to eradicate new competition by coming in with lower prices.

John Bitove, Mobilicity’s chairman, said in July that he would file a complaint with the Competition Bureau, after Chatr pricing leaked onto the Internet and showed them to be nearly identical to those of the new wireless players, like Mobilicity and Wind Mobile.”

If Mobilicity’s complaint does indeed include a claim that one of Rogers’ anti-competitive acts is the introduction of a “fighting brand” (one of a non exhaustive list of anti-competitive acts under section 78 of the Competition Actfor the purposes of abuse of dominance), it may have done so given the fact that it could not establish that Rogers was engaging in below cost sales (a prerequisite for predatory pricing claims) or based on the widely known difficulty of making out predatory pricing claims. For example, in addition to the fact that there have been an extremely small handful of contested predatory pricing claims in Canada, the challenge of persuasively arguing that the necessary conditions for successful predation exist not least of which include dominance, high barriers, below cost pricing, whatever the standard – which is unsettled in Canada – and the ability of the dominant firm to recoup its losses once the other firm has exited the market) are well known. In this regard, the Bureau uses several “screening” criteria to weed out complaints that are unlikely to raise genuine and signficant predation issues, including reviewing the complainant’s financial condition (to assess the likelihood that the complainant is or will suffer losses as a result of the alleged predatory conduct and whether conducive market conditions exist for predation – e.g., dominance, high barriers and the ability of the low pricing rival to recoup its losses).

Having said that, the Competition Bureau is believed to want to commence more abuse of dominance cases, given the relatively small universe of abuse cases in Canada (with the corollary that there remains many legal aspects of abuse of dominance that remain unsettled). Though having spent more than three years investigating and proceeding with the Canadian real estate case (see The CREA Abuse of Dominance Case and Hearing Dates Set for CREA Abuse of Dominance Application), it may well scrutinize the Mobilicity complaint closely before deciding whether to proceed.

For more see: Mobilicity Files Complaint Against Rogersand other competition law telecom developments: British Columbia Supreme Court Rejects Novus’ Section 79 Predatory Pricing Claim Against Shaw, Canadian Wireless Wars Continue – Bell’s Solo Wireless Brand to Offer Unlimited Plans.

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For more information about Canadian competition law or our competition law services visit our: Abuse of Dominance, Advertising and Marketing Law, Bid Rigging, Canadian Competition Law, Canadian Competition Law Compliance, Canadian Competition Law Home, Competition Act Amendments, Competition Bureau Investigations, Competition Law Courses and Conferences, Competition Law Litigation, Competition Law Publications, Competition Law Resources, Competition Law Services, Conferences, Conspiracy and Competitor Collaborations, Conspiracy – FAQs, Global Competition / Antitrust Law Resources, Global Competition Law Updates, Investment Canada Act, Merger Control, Merger Control FAQs, Private Actions, Promotional Contests, Publications, Refusal to Deal, Team, Trade Associations or Trade Association Cases pages or visit our website at www.NortonStewart.com.

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

International Bar Association 2010 Annual Conference in Vancouver

admin — Wed, 08 Sep 2010 22:19:23 +0000

We welcome the delegates to the upcoming International Bar Association’s 2010 Annual Conference in Vancouver, which will be held from October 3-8, 2010.

From the President of the IBA:

“I warmly invite you to join us at the International Bar Association’s 2010 Annual Conference in Vancouver. Our huge network of international lawyers will surely enjoy gathering in Vancouver, with its vibrant business climate, diverse cultural background, and spectacular natural beauty. It is a perfect place for us to spend time together and share our knowledge and experience. I am pleased to note that the Prime Minister of Canada has been invited to open our conference!”

Some highlights of the upcoming IBC conference include:

The largest gathering of the international legal community in the world – a meeting place of more than 4,000 lawyers and legal professionals from around the world.

More than 200 working sessions covering all areas of practice relevant to international legal practitioners.

The opportunity to generate new business with many of the leading firms in the world’s key cities.

Registration fee which entitles delegates to attend as many working sessions throughout the week as they wish.

Continuing legal education and continuing professional development.

A variety of social functions providing ample opportunity to network and see the city’s key sights.

Integrated guest programme.

Excursion and tours programme.

For more information see: International Bar Association Conference – Vancouver (Home), About Vancouver, Registration Information, Registration Fees and Conference Information, Program Search, Tours and Accommodation, Rule of Law Symposium, About the IBA, Preliminary List of Participants, Exhibitors.

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Global Competition Law Update (China) Conditional approval for Novartis’s acquisition of Alcon

admin — Wed, 08 Sep 2010 13:16:20 +0000

We are pleased to provide this global competition law update (China) from our friends at Grandall Legal Group in Beijing.

Introduction

The Ministry of Commerce’s Anti-monopoly Bureau approved Novartis’s acquisition of Alcon on August 13 2010, subject to conditions. The ministry accepted the filing in respect of the acquisition on April 20 2010 and decided on May 17 2010 that a further review period was needed. The ministry reviewed information on: (i) the overlap of the two companies’ products in the Chinese and global markets; (ii) their respective market shares; (iii) the characteristics, applications, prices and sales methods of their products; (iv) the supervisory policies in the relevant market; and (v) the two companies’ relationships with competitors in the market.

Opinions were sought from other companies in the field. After negotiating with the filing parties, consensus was reached on how to reduce the acquisition’s undesirable effects on competition in the relevant markets.

Relevant markets

Anti-infection and anti-inflammatory drugs

The products affected by the acquisition are anti-infection and anti-inflammatory drugs used to treat eyes, particularly for post-surgical infections. Novartis’s and Alcon’s products are sold under the Infectoflam and TobraDex brands, respectively.

After the concentration, Alcon’s share of the Chinese market will exceed 60% and Novartis’s share will be less than 1%. According to information in the filing, Novartis has made a strategic decision to withdraw from the Chinese and global markets.

In deciding to approve the acquisition with conditions, the ministry considered that if Novartis’s decision to exit the market were motivated solely by the purposes of the acquisition, it would still be able to re-enter the market after the transaction and either eliminate or restrict competition in the Chinese market.

Contact lens care products

The post-acquisition enterprise will have almost 60% of the global market for contact lens care products and almost 20% of the Chinese market, making it the second-largest player in China after Hydron Contact Lens.

In 2008 CIBA Vision Shanghai, a Novartis subsidiary, signed a sales and distribution agreement with Hydron whereby the latter became CIBA Vision’s sole distributor in China. The arrangement makes CIBA Vision Shanghai and Hydron strategic partners. However, it will also give the post-acquisition enterprise and Hydron the motive and opportunity to engage in concerted pricing practices and to restrict the volume and location of sales of their products with the effect of eliminating or restricting competition.

In order to mitigate these competition concerns, the ministry has imposed conditions on the transaction.

Conditions

Anti-infection and anti-inflammatory drugs

Novartis is required to cease sales of Infectoflam in China by the end of 2010. In addition, the ministry has stated that:

- for five years after the decision’s effective date, Novartis may not reintroduce Infectoflam (or the same product under a different name) into the Chinese market;

- until the acquisition is completed, Novartis may not sell other ocular anti-infection or anti-inflammatory drugs that are sold in other countries in the Chinese market; and

- for the next five years, Novartis must report annually to the ministry on its compliance with its promise.

Contact lens care products

The CIBA-Hydron agreement must be terminated within 12 months of the ministry’s decision. The relevant party will then have one week in which to notify the ministry of the termination.

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