Archive for the 'News' Category
Yesterday, the Canadian Council of Chief Executives (CCCE) published a new report on the competitiveness of Canadian agricultural processors in global markets and in particular Asia, entitled: Golden Opportunities and Surmountable Challenges: Prospects for Canadian Agriculture in Asia.
From the CCCE:
“Canada’s agri-food sector has the potential to become a growth engine for the entire economy if the federal government moves quickly to negotiate preferential trade agreements with fast-rising Asian markets, a new report concludes.
‘The rise of China, India and other emerging markets has dramatically changed the outlook for Canadian farmers and agricultural processors,’ says Michael Gifford, Canada’s former chief agricultural trade negotiator and the author of the report. … Mr. Gifford’s paper is the fourth in a series of reports commissioned by the Canadian Council of Chief Executives (CCCE) to explore the impact on Canada of Asia’s growing economic power. …
Mr. Gifford notes that, for decades, Canada’s agri-food sector has struggled with boom-and-bust cycles, frequent surpluses and low farm incomes. As in many other industrialized countries, agricultural production increased rapidly in the second half of the 20th century, outstripping population growth.
However, the rise of China, India and other emerging markets is driving major changes in the global agri-food market. Across Asia, rapid urbanization and income growth are contributing to an unprecedented expansion in the number of middle class consumers, and a consequent increase in demand for meats, vegetable oils, dairy products, fruits and sugar as well as processed food and restaurant meals.
All of this augurs well for countries such as Canada that are net agricultural exporters, Mr. Gifford says. ‘Asia’s expanding appetite for imported food provides Canadian agricultural producers with golden opportunities to grow and prosper – provided that the federal and provincial governments and industry work together to identify and overcome a variety of external and internal challenges.’”
The Federal Government appears to be enhancing its online anti-spam legislation resources in advance of Canada’s new Anti-spam Act coming into force. One of the latest examples of this is its new spam and fraud related glossary available at: Glossary. The Government’s new glossary includes definitions of many spam, fraud and Internet crime related terms.
For more about Canada’s new anti-spam legislation see: Anti-spam Act.
The Canadian Bar Association’s National Section on International Law has published its April 2012 newsletter and is calling for articles for its next newsletter (see: National Section on International Law).
Included in the International Law Section’s Spring newsletter are articles on sanctions, the Kyoto Protocol, substituted service, the new emergency arbitration rules of the International Criminal Court and international investment arbitration.
Manitoba’s Consumer Protection Office has announced that new consumer protection laws for fair and clear cell phone contracts will come into effect later this year (on September 15, 2012).
According to the Consumer Protection Office, the new rules “focus on ensuring that contracts are clear and provide all important information for consumers” and to ensure that “cell phone contracts are fair to both consumers and businesses”.
The new legislation will: (i) require companies to provide a copy of the contract to consumers before the contract begins, (ii) require companies to fully disclose and explain all charges fees and terms, (iii) restrict companies from making unilateral changes to contract terms, (iv) allow consumers to cancel contracts at any time, for a reasonable cancellation fee, (v) require the minimum monthly cost to be included in advertisements, and (vi) restrict automatic contract renewals.
Manitoba’s decision to introduce stricter regulation of cell phone contracts and disclosure follows similar recent enforcement actions, including by the Competition Bureau (see: here), CRTC (see: here, here, here and here) and Canadian Transportation Agency (see: here), as well as a number of recent cases where significant or novel penalties were imposed, including a recent landmark Supreme Court of Canada misleading contest case in which punitive damages were awarded (see: here, here and here).
These cases and initiatives also appear to signal an increase in the regulation of advertising in Canada in general and heightened scrutiny of price advertising and disclosure in particular (see e.g.: Is the Price Right? Increased Regulatory Scrutiny and Class Actions for Representations Involving Price).
The International Competition Network’s (ICN) 2012 Annual Conference has wrapped up and the ICN has posted copies of the papers, chapters and other conference materials including in relation to the ICN’s Advocacy, Cartel, Mergers and Unilateral Working Groups.
Canada-related materials include a summary of the Canadian Competition Bureau’s information sharing mechanisms (see: Cartel Working Group – Charts Summarizing Information Sharing Mechanisms) and discussions of some of the Bureau’s criminal enforcement efforts (see: Cartel Working Group – Anti-Cartel Enforcement Manual).
In anticipation of Canada’s new Anti-spam Act coming into force, the federal Government has launched another tool for Canadian consumers and businesses – a “Fight Spam Quiz”.
The quiz (or rather quizzes – one for consumers and another for businesses and organizations) include questions about scareware, phishing, Wi-Fi and security, spambots, malware, spam, viruses, corporate Internet and e-mail usage policies, VPNs (virtual private networks) and Denial of Service (DoS) attacks.
To take the quiz see: Fight Spam Quiz
Earlier today, the Retail Council of Canada (RCC) issued a news release and its submission to the Standing Committee on National Finance regarding retail pricing in Canada. The Committee commenced a study of the reasons for price differences in Canada and the United States last fall, and has heard from a wide spectrum of witnesses, including from government (the Competition Bureau, Canadian Heritage, Transport Canada, CBSA and Department of Finance), the private sector, academics and industry associations and groups.
In addressing the Committee, the RCC’s President Diane Brisebois urged them to “help set the record straight about the real causes of price differences in Canada versus the United States”.
According to the RCC, Canadian retailers are confronted by the following factors that impact retail pricing in Canada: (i) import duties on finished goods, (ii) supply management affecting food product prices (i.e., marketing boards that impact the prices of dairy, poultry and other products), (iii) vendor pricing (i.e., higher prices for Canadian retailers) and (iv) regulatory harmonization (e.g., in the book industry, in relation to which the RCC said Canada was the “poster child” for regulation leading to higher book prices). The RCC particularly emphasized existing “outdated” tariffs for adversely impacting Canadian retail prices.
The RCC’s submission discusses, among other things, the Canadian retail industry and suggested areas for government action (in relation to country pricing, duty remission on imported consumer goods, supply management and regulatory harmonization/red tape reduction).
Interestingly, the RCC did not address any competition or marketplace concentration issues in its submission, which is interesting given the high level of consolidation in many Canadian industries (including in some retail segments), except to comment on increased foreign competition:
The American Bar Association’s Section of Antitrust Law has launched a very interesting (if perhaps appealing only to competition/antitrust geeks) collection of video interviews with and speeches by some of the leading U.S. antitrust practitioners, enforcement officials and bench. Included are Anne Bingaman, Terry Calvani, Judge Frank Easterbrook, Eleanor Fox, William Kovacic, Tim Muris, Robert Pitofsky and Judge Richard Posner, among others.
In an interesting recent note, Jones Day has commented on a recent FTC administrative action against three of the largest U.S. suppliers of ductile iron pipe fittings (DIPF) alleging that they engaged in price-fixing and other anticompetitive behaviour. In connection with this case, the FTC has published a proposed consent order for public comment to resolve claims that one supplier, Star, violated section 5 of the Federal Trade Commission Act by engaging in price fixing.
The case is interesting in that the FTC’s complaint alleges that two of the suppliers, McWane and Sigma, invited the third, Star, to collude by communicating through a letter to common customers. The FTC also alleges that the suppliers utilized an industry trade association (the Ductile Iron Fittings Research Association) to exchange sales information to monitor and enforce the parties’ alleged agreement.
The FTC’s proposed consent order would prohibit Star from: (i) agreeing to fix, raise or stabilize DIPF prices (or allocate markets, customers or business opportunities for DIPF), (ii) soliciting any competitor to participate in such anti-competitive conduct or (iii) participate in any agreement between competitors to exchange competitively sensitive information (e.g., sales information).
In Canada, while there is no express provision in the Competition Act exclusively governing information exchanges, the principal risk of such exchanges between competitors is that they can lead to agreements (e.g., price-fixing agreements) that violate the criminal conspiracy provisions of the Competition Act (section 45). Such information can include prices, costs, customers, suppliers, markets, market shares and business and strategic plans.
Information exchanges can also be relevant in establishing the existence of an illegal agreement under section 45 (i.e., be used by the Bureau, a court or a private plaintiff to infer the existence of an agreement that violates section 45).
On April 19, 2012, the U.K. Office of Fair Trading (OFT) announced its decision that British Airways (BA) and Virgin Atlantic Airways (VAA) engaged in anti-competitive practices relating to passenger fuel surcharges and fined BA £58.5 million. This case relates to coordination between the airlines on surcharge pricing for long-haul flights through the exchange of pricing and other competitively sensitive information.
In making the announcement, the OFT said:
“This decision brings an end to this investigation and sends out a strong message that coordinating pricing through the exchange of confidential information between competitors is unlawful. The size of the fine underlines that it is important for companies to take steps to ensure that they have an effective compliance culture. The fine would have been higher still but for the co-operation provided by BA throughout the OFT’s investigation. Without this, together with BA’s admission of the infringement, the case would have taken considerably longer to resolve.”
According to the OFT, VAA brought the matter to the OFT’s attention and was not fined under the OFT’s leniency policy.
In Canada, the Competition Bureau also has Immunity and Leniency Programs, which are both increasingly important tools for the Bureau for the detection of cartels and important options for parties participating in criminal conduct under the Competition Act to reduce liability.
The case is also interesting in highlighting the risk of information exchanges between competitors.
In Canada, while there is no express provision in the Competition Act exclusively governing information exchanges, the principal risk of such exchanges between competitors is that they can lead to agreements (e.g., price-fixing agreements) that violate the criminal conspiracy provisions of the Competition Act (under section 45).
Information exchanges can also be relevant in establishing the existence of an illegal agreement under section 45 (i.e., be used by the Bureau, a court or a private plaintiff to infer the existence of an agreement that contravenes section 45).
Following amendments to Canada’s Competition Act in 2009 and 2010, agreements to exchange competitively sensitive information may also raise issues under section 90.1 of the Act (the civil reviewable practice section for agreements among competitors) if their effect is to prevent or lessen competition substantially.
In an interesting story earlier today, Bloomberg reported that Public Safety Canada has warned Industry Canada that loosening investment restrictions in Canadian telecommunications providers would pose a “considerable risk” to Canadian national security.
In particular Bloomberg has reported that Public Safety Canada told Industry Canada that the “security and intelligence community is of the view that lessening or removing restrictions from the Telecommunications Act, without implementing mitigation measures, would pose a considerable risk to public safety and national security.” Bloomberg also reports that Public Safety Canada is working with Industry Canada to “ensure that any risks to Canada’s telecommunications sector are identified and addressed”.
Last month Industry Minister Christian Paradis announced that the Telecommunications Act would be amended to lift foreign investment restrictions for telecom companies with less than a 10% market share and that the Government would be imposing caps in upcoming spectrum auctions in 2013 to “guarantee that both new wireless competitors and incumbent carriers have access to the spectrum up for auction”. The Government also introduced several other measures, including the improvement and extension of tower sharing and roaming policies and imposing obligations on 700 MHz spectrum licence holders for the timely delivery of advanced wireless services to rural Canadians.
Foreign investors are presently subject to Canada’s national security review regime (in addition to general Investment Canada Act review or notification), under which the Minister and federal Cabinet can review proposed or completed investments that may be “injurious to national security” (a purely political and undefined test).
Under Canada’s (relatively new) national security review regime, the Government may conduct a national security review of an investment regardless of whether it triggers the general thresholds for review under the Investment Canada Act or whether control of a Canadian business is acquired.
Global Competition Review has published its 2012 edition of Vertical Agreements with a global survey of the regulation of vertical agreements including in Canada.
From GCR:
“Global Competition Review is delighted to publish the sixth edition of Vertical Agreements, a volume in the Getting the Deal Through series of annual special reports providing international analysis in key areas of law and policy for corporate counsel, cross-border legal practitioners and business people.
Following the format adopted throughout the series, the same key questions are answered by leading practitioners in each of the 37 jurisdictions featured.”
On April 16, 2012, the Ministry of Justice announced that it was introducing new legislation that will, if passed, standardize the time limits for filing lawsuits in British Columbia.
In making the announcement the Ministry said:
“Bill 34, the proposed new Limitation Act covers breach of contract, wrongful dismissal, personal injury, defamation and other civil actions. It sets a single, two-year limitation period for most civil claims and reduces the maximum time limit for filing a claim to 15 years from the date the act in question occurred. The proposed reforms balance the rights of both plaintiffs and defendants, yet ensure important aspects of the current law remain unchanged.
These changes are the result of significant consultation with the public, consumer groups and business, legal and local government representatives, and they will make B.C.’s law consistent with reforms in Alberta, Saskatchewan, Ontario and New Brunswick.
Limitation periods can affect the justice system and its efficiency, the cost and availability of insurance products for all British Columbians, and how financial arrangements are structured. They can also determine how long individuals and businesses must keep records that might be required to support a legal action.”
The new legislative reforms introduced by the Government yesterday were first proposed in a 2010 white paper and based on public consultations.
Bill C-34, if passed, will involve a move away from a variety of basic limitation periods (currently based on the type of cause of action) to a single two-year limitation period for most civil claims, with exceptions for the enforcement of monetary judgments and statutes with specific limitation periods – for example, the Competition Act.
The new legislation would also mean that the maximum time limit for filing a claim would be reduced to 15 years from 30 years. Under the new legislation, the ultimate limitation period would also be suspended until a claim was discovered (if a defendant willfully concealed facts about an injury, loss, damage or that they were responsible for the act or omission or where a defendant willfully misled a plaintiff about whether civil proceedings would provide an appropriate remedy).
The Institute of European and International Business Law from the University of St. Gallen in Switzerland will be hosting the nineteenth St. Gallen International Competition Law Forum ICF on June 7 and 8, 2012.
From the Institute of European and International Business Law:
“The Institute of European and International Business Law from the University of St. Gallen, Switzerland is pleased to invite you to the nineteenth St. Gallen Inernational Competition Law Forum ICF on June 7 and 8 2012. Once again, leading experts in national, European and international competition law will come together to discuss their ideas on the latest trends and developments in the field and their practical implications.
The St. Gallen International Competition Law Forum ICF prides itself on being one of the most established events of its kind in Europe. It attracts influential policy shapers, this year, for example, Joaquin Almunia (European Commissioner of Competition), Andreas Mundt (President of the German Competition Authority) and William Kovacic (Former Commissioner of the U.S. Federal Trade Commission) as well as internationally renowned academic experts and leading business practitioners.
You will find all information on the conference in the programme flyer (see: Programme) and under www.sg-icf.ch. As places are limited, we encourage early registration!
If you have further questions, please do not hesitate to contact the Institute of European and International Business Law (europarecht@unisg.ch).
We very much look forward to seeing you this summer in St. Gallen!”
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The International Law Section of the American Bar Association will be holding its 2012 Spring Meeting on April 17-21, 2012 in New York.
Sessions will include: The Framework of International Legal Practice, Drafting International Contracts, Cross-Border Litigation and Dispute Resolution, Competition & Antitrust Issues in International Transactions, Fighting Online Piracy – New Perspectives on ISP Liability Under EU, U.S. & U.K. Copyright Law, Damages in International Contracts, Selling Consumer Products into the U.S. and Canada, the Globalization of Anti-Corruption Laws, the Evolution of International Criminal Law and Price Signaling and Hub-and-Spoke Communication: How to Avoid the Cutting Edge of Antitrust Liability.
For the conference program see:
The Federal Office of the Privacy Commissioner has launched a new and enhanced website that includes new anti-spam legislation information relating to the role of the Privacy Commissioner (see: Online Privacy: Fighting Electronic Spam and Other Online Threats).
The new Federal privacy law resources include information about Canada’s new anti-spam legislation, the role of the Privacy Commissioner in its enforcement, Internet threats (including address harvesting, botnets, denial-of-service attacks, dictionary attacks, malware and phishing) and steps consumers and businesses can take to be protected against spam.
Canada’s new anti-spam legislation was enacted in the fall of 2010 and is not yet in force, although is expected to come into force later this year or in early 2013 with the finalization of draft Industry Canada Regulations (final CRTC Regulations were published late last month – see: CRTC Publishes Final Anti-spam Act Regulations).
On April 13, 2012, the Competition Bureau announced that Suncor Energy Products Inc. (Sunoco) pleaded guilty to fixing gasoline prices from May to November, 2007 in Belleville, Ontario and that the Ontario Superior Court sentenced it to pay a $500,000 fine (see: Suncor (Sunoco) Energy Pleads Guilty to Price-Fixing in Belleville, Ontario).
In making the announcement, the Commissioner of Competition said:
“We are committed to pursuing those who engage in anti-competitive behaviour that harms Canadian businesses and consumers … Illegal agreements between competitors to fix prices deny consumers the benefits of competitive prices and choice.”
Last month, Pioneer Energy LP, Canadian Tire Corporation and Mr. Gas also pleaded guilty to price-fixing during the same period (in Kingston and Brockville) and were fined $2 million (see: Competition Bureau Announces $2 Million in Ontario Gas Price-fixing Case).
Under section 45 of the Competition Act, three types of agreements between competitors are “per se” illegal (i.e., with no adverse competitive impacts required to be proven): (i) price-fixing agreements (agreements to fix, maintain, increase or control the price for the supply of a product or service), (ii) market allocation/division agreements (agreements to allocate sales, territories, customers or markets for the production or supply of a product), (iii) output/supply restriction agreements (agreements to fix, maintain, control, prevent, lessen or eliminate the production or supply of a product).
Other types of agreements between competitors are potentially subject to review under a second and separate non-criminal reviewable matters agreement provision (section 90.1).
According to the Bureau, it became aware of the price-fixing activities in this case using its Immunity and Leniency Programs (see: Backgrounder – Gasoline Companies Plead Guilty to Price-Fixing in Kingston and Brockville, Ontario). Under the Competition Bureau’s Immunity and Leniency Programs, applicants may receive full immunity from prosecution or reductions in penalties for cooperating with a Bureau investigation.
Under the Bureau’s Immunity Program, a party or company implicated in criminal conduct under the Act may offer to cooperate with the Bureau in its investigation and request immunity (i.e., full immunity from prosecution for criminal offences under the Act). Under the Bureau’s Leniency Program, parties that have contravened criminal provisions of the Act that are not entitled to full immunity (e.g., are not “first in”) may nevertheless be eligible for leniency in sentencing. Importantly, the Bureau’s Immunity Program is a “race” in that only the first eligible applicant is entitled to full immunity. As such, evaluating whether the Bureau’s Immunity and Leniency Programs are available is an important and time-sensitive step for parties to potentially reduce liability.
According to the Bureau, it also used wiretaps and search warrants in its investigation in this case, searching five corporate locations, nine residences and two residential offices, seizing thousands of paper and electronic records and interviewing witnesses (for more about the Bureau’s enforcement powers see: Bureau Enforcement).
On April 12, 2012, the Competition Bureau published a new Merger Review Performance Report. The Bureau’s new Report contains a summary of updated and newly issued merger-related guidelines, statistics relating to its review of mergers in the past two years (since its last merger performance report was issued in 2010) and discussions of recent initiatives and policy changes.
Some of the highlights of the Bureau’s new Report include:
Merger-review related policy objectives. The Bureau describes its new and updated merger guidelines as part of its “ongoing initiative to realign its processes, and to develop and revise its guidance documents to ensure the successful implementation of the 2009 amendments to the merger provisions of the Act and the Notifiable Transactions Regulations.” The Bureau’s new or recently updated merger-related guidelines include its Fees and Service Standards Policy for Mergers and Merger-Related Matters, Fees and Service Standards Handbook for Mergers and Merger-Related Matters, Procedures Guide for Notifiable Transactions and Advance Ruling Certificates under the Competition Act, several new Merger Interpretation Guidelines (including in relation to hostile transactions), updated Merger Enforcement Guidelines (which govern the Bureau’s substantive review of mergers), Merger Review Process Guidelines (which address the Bureau’s approach to Canada’s new two-stage merger review regime, include second phase reviews and the use of supplementary information requests (“SIRs”)).
New standard language for “no action” letters. The Bureau discusses its new standard language for “no action” letters to align its clearance language to section 123(2) of the Competition Act and “more accurately reflect the distinction between the discretionary issuance of an ARC and [a no action letter]”.
New merger remedies bulletin. The Bureau has announced, consistent with recent public remarks by the Commissioner, that it intends to update its 2007 Merger Remedies Bulletin “in the coming months” based on its August, 2011 Merger Remedies Study.
Merger position statements. The Bureau discusses its recent initiative to begin issuing position statements for certain merger reviews to “enhance its communication and transparency with stakeholders”. The Bureau also discusses some of the factors it will consider in deciding whether to issue a position statement, including the complexity and importance of issues, involvement of novel analytical tools and level of interest in the case.
Merger registry. The Bureau discusses its recently launched (in February of this year) merger register.
Merger review statistics. The Bureau’s Report includes merger review statistics, including a significant drop in reviews (a decrease of about 100 reviewed mergers between FY2007-2008 and FY2008-2009, the “biggest decline in a single fiscal year since the introduction of filing fees in 1997), the impact of filings following the increase in the size of transaction threshold in 2009 (from C $50 to $70 million at the time – the size-of-transaction threshold is currently C $77 million), a “steady influx of highly complex transactions raising serious competition concerns” (including the BHP/Potash, LSE/TMX, TMX/Maple Group and Google/Motorola transactions) and the issuance of 18 SIRs since the introduction of Canada’s two-stage merger review regime in 2009.
Review of non-notifiable mergers. The Bureau discusses its relatively recent initiative to increase its monitoring and review of non-notifiable transactions (in Canada, all mergers as defined under the Competition Act are potentially reviewable regardless of whether they require pre-merger notification). In this regard, the Bureau states that it “recently implemented a new initiative to actively monitor transactions in the Canadian marketplace”. According to the Bureau, this shift in its policy was largely driven by the reduced timeframe to challenge mergers post-closing as a result of the 2009 amendments (reduced to one year from the previous three). The Bureau states that its monitoring of non-notifiable deals includes “regular scanning of various media sources and mergers and acquisition databases, as well as the review of relevant marketplace complaints received by the Bureau.”
Our friends at the Canadian Council on International Law have announced a call for papers for the CCIL 41st Annual Conference: Ronald St. John Macdonald Young Scholars Award.
From the CCIL:
“The Canadian Council on International Law is inviting international law papers from students who are studying at the graduate or undergraduate level in any discipline. Articling students are also eligible: papers from articling students will be considered under the graduate student category. Successful applicants will give a presentation based on their papers at the 2012 CCIL Annual Conference to be held in Ottawa from November 8-10, 2012. One award will be given for the best graduate paper and one for the best undergraduate paper. Winners will receive the fourth annual Ronald St. John Macdonald Young Scholars Award. (Subsidies for travel to the annual conference are available.)
This year’s CCIL conference theme is “SOS International Law: International Law and Disasters and Emergencies”. Crises and emergencies come in many forms. They may be financial, environmental or purely political, as states break apart, governments are ousted or armed conflicts occur. From the financial turmoil in the United States and Europe, to the surge for democracy in the Arab world and resulting civil conflicts, to natural disasters in Haiti and Japan, and to the predicament of nuclear proliferation in Iran and elsewhere, international relations have been preoccupied by these crises and emergencies. And behind these newspaper headlines are countless crises averted or emergencies abated, where early intervention forestalls disasters before they emerge.
International reactions to emergencies and crises are the stuff of high politics. In some instances, international law may prove a useful tool in the decision-making of states confronting such calamities. In other cases, it seems woefully inadequate and plays at best a supporting role. What part is there for international law in dealing with crises and emergencies? Is international law capable of providing useful guidance during catastrophes? Or is it instead burdened with feet of clay?
Papers that reflect the conference theme will be given strong consideration by the CCIL Ronald St. John Macdonald Award Selection Committee. Papers must be no more than 35 pages in length.”
On April 13, 2012, the Competition Bureau announced that it had obtained six more guilty pleas in connection with its ongoing Quebec gasoline price-fixing investigation (five individuals and one company), with additional fines of $155,000. According to the Bureau, 27 individuals and 7 companies have pleaded guilty to date in this case with total fines of over $3 million.
This investigation is the largest criminal investigation in the Bureau’s history and has been active for about four years (charges were first laid in June 2008).
Under section 45 of the Competition Act, three types of agreements between competitors are “per se” illegal (i.e., with no adverse competitive impacts required to be proven): (i) price-fixing agreements (agreements to fix, maintain, increase or control the price for the supply of a product or service), (ii) market allocation/division agreements (agreements to allocate sales, territories, customers or markets for the production or supply of a product), (iii) output/supply restriction agreements (agreements to fix, maintain, control, prevent, lessen or eliminate the production or supply of a product).
Other types of agreements between competitors are potentially subject to review under a second and separate non-criminal reviewable matters agreement provision (section 90.1).
The Competition Bureau also has formal Immunity and Leniency Programs under which applicants may receive full immunity from prosecution (or reductions in penalties) for cooperating with an investigation, and which the Bureau increasingly relies on to detect cartels.
Under the Bureau’s Immunity Program, a party or company implicated in criminal conduct under the Act may offer to cooperate with the Bureau in its investigation and request immunity (i.e., full immunity from prosecution for criminal offences under the Act). Under the Bureau’s Leniency Program, parties that have contravened criminal provisions of the Act that are not entitled to full immunity (e.g., are not “first in”) may nevertheless be eligible for leniency in sentencing. Importantly, the Bureau’s Immunity Program is a “race” in that only the first eligible applicant is entitled to full immunity. As such, evaluating whether the Bureau’s Immunity and Leniency Programs are available is an important and time-sensitive step for parties to potentially reduce liability.
Earlier today, the U.S. Department of Justice (“DoJ”) announced in a press release that it had reached a settlement with three of the parties in its e-book price fixing investigation (Hachette Book Group (USA), HarperCollins Publishers L.L.C. and Simon & Schuster Inc.) and would continue its litigation against Apple Inc., Holtzbrinck Publishers LLC (operating as Macmillan) and Penguin Group (USA), filing a civil antitrust lawsuit in New York.
The DoJ alleges that Apple and the publishers in this case conspired to “end e-book retailers’ freedom to compete on price, take control of pricing from e-book retailers (such as Amazon and Barnes & Noble) and substantially increase the prices that consumers pay for e-books.”
In making the announcement, U.S. Attorney General Eric Holder said:
“As a result of this alleged conspiracy, we believe that consumers paid millions of dollars more for some of the most popular titles. … We allege that executives at the highest levels of these companies–concerned that e-book sellers had reduced prices–worked together to eliminate competition among stores selling e-books, ultimately increasing prices for consumers.”
According to the DoJ, it cooperated closely with the European Commission, as well as state authorities in Connecticut and Texas to “uncover the publishers’ illegal conspiracy”.
The core of the DoJ’s allegations is that Apple and the five publishers involved sought to eliminate price competition among retailers selling e-books by entering into agreements that eliminated price competition between competing booksellers. In particular, the DoJ alleges that the publishers introduced a new model, agreed upon by them, under which they took control of pricing authority from retailers and raised e-book prices (rather than, as previously, selling wholesale to retailers allowing them to set prices).
Also interesting are allegations by the DoJ that the parties periodically met in “private dining rooms of upscale Manhattan restaurants used to discuss confidential business and competitive matters” including Amazon’s e-book’s retailing policies.
The Competition Bureau has published its March Report of Concluded Merger Reviews.
Launched in February amid some controversy from the competition bar (see: Competition Bureau to Issue Monthly Merger Review Reports), the Bureau’s second monthly report includes fourteen transactions in which Advance Ruling Certificates were issued in two and No Action Letters issued in the remainder.
On April 11, 2012, the Competition Bureau issued new merger interpretation guidelines for public comment: Pre-Merger Notification Interpretation Guideline Number 15: Assets in Canada and Gross Revenues From Sales in, from or into Canada (Sections 109 and 110 of the Act).
In issuing the new guidelines the Bureau said:
“Interpretation Guideline 15 provides guidance on how to calculate the aggregate value of assets in Canada and the gross revenues from sales in, from or into Canada. It also provides information on how to determine whether gross revenues from sales are generated from assets in Canada. This guidance may assist businesses in determining whether the parties-size and transaction-size thresholds under sections 109 and 110 of the Act are exceeded.”
The Bureau has currently issued merger notification interpretation guidelines relating to the definition of an “operating business” under the Competition Act, multiple-step transactions, ordinary course acquisitions and corporate spin-offs, among others.
With respect to the new guidelines issued for public consultation, the calculation of Canadian assets and revenues is related to the “size of parties” and “size of transaction” thresholds for merger notification under sections 109 and 110 of the Competition Act. Generally speaking, for a merger to be notifiable in Canada it must: (i) involve the acquisition of an “operating business” in Canada, (ii) be one of five specified types of transactions set out in the Act, (iii) exceed the prescribed thresholds under the Act and (iv) not fall within an applicable exception.
The Bureau’s new guidelines set out, among other things, the Bureau’s position regarding determining the location of tangible, intangible and financial assets and revenues, the use of segmented financial statements and the calculation of revenues for the size of transaction threshold. The Bureau’s new guidelines also include a number of illustrative examples.
Advertising Standards Canada (ASC) will be hosting Jonathan Salem Baskin as the keynote speaker for its Annual General Meeting on May 3rd.
From the ASC:
“Attend ASC’s Annual General Meeting Keynote to hear Jonathan Salem Baskin, co-author of the newly released Tell the Truth: Honesty is Your Most Powerful Marketing Tool, speak on how truth telling is the core of successful marketing communications. Baskin will discuss how consumers are using social media in their pursuit of truth, causing advertisers to totally rethink their creative strategies.
This event, his only scheduled Canadian appearance, will take place in Toronto on Thursday, May 3, 2012, and should not be missed!”
On April 10, 2012, the Competition Bureau issued a statement summarizing its review of the acquisition of Quad/Graphics Canada, Inc. by Transcontinental Inc. (a printing merger involving the retail flyer market).
The Bureau’s announcement is part of its recent initiative to increase the transparency of its merger review process, which has included the launch of a new Monthly Report of Concluded Merger Reviews (launched earlier this year with some controversy from the competition bar), new Merger Enforcement Guidelines (“MEGs”) (which govern the Bureau’s substantive review of mergers in Canada), new Merger Review Process Guidelines (reflecting the Bureau’s experience with Canada’s new two-stage merger review process since it was introduced in March, 2009) and recent public remarks by the Commissioner.
With respect to merger review summaries in particular, the Commissioner announced that the Bureau would be launching summaries of some of its merger reviews in recent public remarks:
“Among other initiatives, I am pleased to announce that, following the recommendations of an internal working group on transparency, we intend to publish more position statements that describe the Bureau’s analysis of complex merger cases, and to establish a merger register — a list of all closed merger reviews, updated on a monthly basis.”
While the Bureau had previously been issuing Technical Backgrounders for completed merger reviews, the Bureau discontinued that practice in 2009.
In the Bureau’s Quad/Graphics-Transcontinental merger review statement, the Bureau states that it issued a No Action Letter (“NAL”) to Transcontinental, based on factors including increased foreign (U.S.) competition in the relevant retail flyer market.
According to the Bureau, while it concluded that there was increased concentration in Canada, “U.S. printers with printing facilities located in close proximity to the Canadian border … are imposing competitive discipline on the retail flyer market in Canada.”
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