Google has announced its new privacy policy, which will take effect on March 1. Google is doing away with the over 60 different existing privacy policies for its various products and replacing them with one single shorter and simpler privacy policy.

Those who are most affected by this change are people with Google accounts. Under the new privacy policy, if a user is signed in to the Google account, Google will be able to collect and combine user information from across its various products and services. For example, Google will be able to collect and analyze your search terms on the Google search engine and suggest related videos when you next go onto YouTube. This will enable Google to form fuller and more comprehensive user profiles. As Google emphasized in its announcement, this change will allow it “to create one beautifully simple and intuitive experience across Google.”

Facebook is already able to combine its user data. Facebook tracks everything its users do while on their accounts and that user data is used to target advertising for particular services and products to particular users. Given the volume of registered users and the often more personal nature of the information its users provide on the social networking site, Facebook has grown to be a formidable competitor to Google in the online advertising market.

This change to Google’s privacy policy is clearly a response to Facebook. The range of services and products Google provides is wider than that of Facebook. Though user data Facebook gathers tends to be more personal, Google has attempted to rectify this with the launch of its own social networking site Google+ last year.  Now Google’s new ability to combine user data collected from different services will enable it to better integrate its user data and use it to better target its advertising.

Google’s new change to its privacy policy has raised concerns from some users as well as a number of members of the US Congress. Users cannot opt out of the new privacy policy to prevent their user information from being combined across Google services. Google’s answer is rather unsatisfactory, i.e. don’t log in. information about users activities on Google services while not logged into their Google accounts would not be combined. However, without logging in, many of Google’s services would be inaccessible to users.

There have been growing privacy concerns about the user data Google and Facebook collect, which have attracted the attention of both US lawmakers and the Federal Trade Commission. Google and Facebook both have had to settle with the FTC over investigations of privacy complaints in the past. Google’s privacy policy change is likely to attract further regulatory scrutiny.

- Reprinted with permission.

Is the Price Right?  Increased Regulatory Scrutiny and Class Actions for Representations Involving Price

Businesses operating in Canada should be aware of a recent trend towards greater regulation and enforcement action surrounding pricing representations where additional costs are not clearly disclosed up front. Last week, the Minister of State for Transport announced that the Canada Transportation Agency is proceeding with regulations to require Canadian air carriers to include all fees, charges and taxes in advertised prices. This trend towards requiring up-front disclosure of all fees and charges in any advertised pricing is consistent with the enforcement initiatives recently undertaken by the Competition Bureau (the “Bureau”) as well as the approach taken in recent class actions involving pricing representations brought in Québec and Ontario. The Bureau’s aggressive enforcement approach combined with an increase in class actions concerning pricing representations suggests it may be prudent for businesses to consider disclosing all fees imposed by the seller and applicable to all customers up front in any advertising.

On December 16, the federal Minister of State for Transport, the Honourable Steven Fletcher announced that the Canada Transportation Agency will be developing regulations to require Canadian air carriers to include all charges in advertised prices. Mr. Fletcher explained that the regulations are intended to promote fair competition “by ensuring greater transparency of advertised airfares for Canadian travellers”. The Canada Transportation Agency is empowered under the Canada Transportation Act to make regulations respecting the prices for air services within or originating in Canada advertised in all media, including the Internet. The drafting and consultation process for the regulations is expected to take approximately a year to complete. The planned regulations will require air carriers who advertise prices to include “all costs to the carrier” of providing the service and to indicate in the advertisement all fees, charges and taxes collected by the carrier on behalf of another person. The advertised price must enable consumers to “readily determine the total amount” to be paid. The plans for Canadian airfare pricing regulation follow similar increased regulation in both the European Union and the United States regarding the pricing of airfares.

The move to require up front disclosure of all fees and charges in advertised prices for airline carriers also follows enforcement action undertaken by the Competition Bureau in other industries. Specifically, the Competition Bureau has taken the stance that “the popular trend” of advertising a price to consumers and then disclosing additional mandatory costs in accompanying fine print is misleading and may result in enforcement action. This stance is clearly evidenced in a recent settlement reached with Bell Canada regarding its approach to pricing representations as well as recent speeches by the Commissioner of Competition (the “Commissioner”) regarding the Bureau’s future enforcement activities.

On June 28, 2011, the Bureau announced that Bell Canada had agreed to modify certain advertisements which the Bureau alleged were contrary to the civil misleading advertising provisions in the Competition Act and to pay a penalty of $10 million as well as a sum towards the Bureau’s legal costs. According to the Bureau, Bell made false or misleading representations between December 2007 and June 2011 about the prices at which certain of its services were available. Specifically, the Bureau alleged that Bell’s advertisements created the misleading “general impression” that consumers need only pay the monthly price advertised in the main body of the advertisements and that Bell had used a variety of “fine-print disclaimers” to “hide” additional mandatory fees from customers. According to the Bureau, the actual price paid by Bell’s customers for the advertised products was higher than the price that was advertised in the main body of the advertisement. Although Bell did not accept the Bureau’s allegations, it agreed not to contest these allegations for the purposes of the settlement, and to modify all advertising at issue within 60 days.

Since the Bell settlement was announced, the Commissioner has given various speeches regarding the Bureau’s enforcement priorities for the coming year. In particular, the Commissioner has recently stated that “misleading representations continue to be an area of concern for the Bureau” and, with respect to pricing representations, the Commissioner has stated that the Bureau is “investigating several industries where we are concerned that Canadians have been taken advantage of, in this or related ways”. The Bureau’s focus on misleading advertising and consumer-oriented enforcement appears to be part of the Bureau’s goal to “demonstrate the relevance of the Bureau’s work to Canadians in their everyday lives”.

Given that the Bureau clearly considers price representations to be an enforcement priority, it is somewhat surprising that the Bureau has not issued any new guidance in the form of revised guidelines or any specific guidance to the industries where the Bureau is concerned about the disclosure provided (as it has done in prior instances). Rather, the Bureau appears to be taking aggressive enforcement action (such as that against Bell) in the hopes that such enforcement activity will motivate compliance. The lack of further guidance on this point is particularly surprising given that the use of “mice print” and disclaimers is widespread in Canadian advertising and the Bureau’s existing guidelines on point merely provide that “if a representation is made concerning the price of a product, any such additional required payment should be disclosed at the same time”. In other words, under the Bureau’s existing guidelines, it is certainly arguable that a customer has received adequate disclosure of the applicable price via the information contained in the smaller print.

In a similar vein, allegedly misleading advertising and charging consumers “undisclosed” costs has given rise to a number of class actions in Québec on the basis of Québec’s Consumer Protection Act (the “Québec CPA”). Section 12 of the Québec CPA, which applies to advertisements in all forms, provides that “no costs may be claimed from a consumer unless the amount thereof is precisely indicated in the contract.” While the word “costs” (or “frais” in French) is not defined in the Québec CPA, Québec courts have interpreted this term broadly as including, for example, commissions, administrative fees and surcharges. Québec’s Consumer Protection Office has taken the position that the advertised price must be the total price that a consumer has to pay and that the only amounts that can be excluded from this price are amounts payable pursuant to federal or provincial legislation that are levied directly on the consumer and that are remitted to a public authority such as, for example, the Québec Sales Tax (QST) or GST. The alleged failure to comply with section 12 of the Québec CPA has given rise, most recently, to a proposed class action against a Québec-based telecommunications company seeking restitution for amounts allegedly improperly charged, as well as $5 million in punitive damages.

Class actions based on a lack of full disclosure of applicable fees and charges have been initiated in Ontario as well. For instance, a class action against United Parcel Service Canada Ltd. (“UPS”) was brought on the basis that UPS failed to disclose mandatory brokerage fees to consumers, and thereby breached various provisions of Ontario’s Consumer Protection Act (“Ontario CPA”). This class action was recently certified by the Ontario Superior Court of Justice. The brokerage fees were imposed on consumers for the delivery of items shipped from the United States, and as the judge pointed out, were not a government imposed duty or tax, but rather were levied by UPS for its customs clearing services. Further, the judge found that various standard form contracts used by UPS did not disclose the disputed fee. UPS has indicated it plans to appeal the Superior Court’s decision.

The federal government’s planned regulation of airline advertising, the Bureau’s aggressive enforcement initiatives regarding price representations as well recent class actions should be taken as cautionary signals to Canadian businesses. In particular, when charges are imposed by the seller and applicable to all customers – in order to avoid enforcement action or litigation – businesses should consider disclosing such fees up front and including such fees in the prices featured in any advertising.

- Reprinted with permission.

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In particular, according to media reports, Rogers is arguing that the civil “performance claim” provision of the Competition Act is contrary to the freedom of expression rights under the Charter and that the penalties for civil misleading advertising are unconstitutional.

In addition to “general misleading advertising” provisions, the Competition Act also prohibits or regulates a variety of other advertising and marketing conduct, including performance claims that are not based on an “adequate and proper test” made before the claim is made.

Over the past few years the Bureau has challenged a fairly wide variety of performance based advertising claims including claims relating to gas saving devices, spas and recently weight loss claims made by Nivea’s Canadian distributor in relation to some Nivea products (see: Competition Bureau Requires Maker of Nivea to Reimburse Customers for Misleading Claims).

The penalties for civil misleading advertising were also recently increased (see: Canada’s Competition Act Amendments), with maximum “administrative monetary penalties” or “AMPs” (essentially civil fines) of up to $10 million for corporations, which has led to speculation as to whether these significant penalties would be subject to constitutional challenge as essentially penal in nature, without the accompanying procedural protections available for criminal offences.

The Rogers case is the first case to challenge the constitutionality of these AMPs recently introduced for misleading advertising.

This case arose based on concerns from several new entrant cell phone companies, including Wind Mobile, that Rogers was engaging in false performance claims relating to its Chatr cell phone brand, including claims that Chatr had “fewer dropped calls than new wireless carriers.”

The Bureau’s position has been that Rogers’ performance claims were both unsubstantiated and could not be substantiated because, for example, the new entrant carriers did not disclose dropped call rates (see: Competition Bureau Takes Action Against Rogers Over Misleading Advertising).

While Rogers’ recent constitutional arguments are interesting, their success is uncertain given, among other things, that a great many of the constitutional challenges to the Competition Act in the past have failed.

This case will, however, regardless of its outcome, prove to be one of the early tests of Canada’s amended Competition Act.

According to the Star, at a Dx3 Canada digital trade show earlier today Mr. Parent said:

“Online behavioral advertising is when we identify you as a user. … People wonder, Is this Big Brother? … Do they know what color hair I have?  Do they know my age and income?”

These remarks, and marketers’ decision to introduce self-regulation to govern “behavioral advertising” (defined by the Office of the Privacy Commissioner as “tracking consumers online activities over time in order to deliver advertisements targeted to their inferred interests”), are presumably intended to circumvent legislative and regulators’ efforts to impose restrictions on behavioral advertising.

For example, on December 6, 2011, the federal Privacy Commissioner Jennifer Stoddart announced new online tracking guidelines for advertisers which, among other things, restrict the tracking of children and tracking technologies people can’t opt out of (i.e., turn off) (see: Privacy Commissioner Issues New Online Behavioural Advertising (Tracking) Guidelines).

In announcing new industry self-regulatory measures, Mr. Parent also made a distinction between tracking “devices” as opposed to “people”: “Actually, we are identifying your device, not you …”

According to the IAB, under the advertising industry’s new self-regulation regime, online ads that reach users through behavioral tracking will soon carry arrow-shaped icons in the top right hand corner that, when clicked, will take users to a new website called Privacy Matters Canada where targeted advertising will be explained and users will be given a chance to opt out.

These recent behavioral advertising developments clearly illustrate that advertisers are moving rapidly away from traditional forms of advertising and marketing (e.g., direct mail, print advertising, etc.) and that this is proving challenging to legislators and law-makers to effectively regulate.

At the same time, new legislation has been introduced that will impact how companies market in Canada, most notably the new federal anti-spam legislation (Bill C-28), and new cross-border enforcement initiatives were announced including a new international do-not-call enforcement network co-chaired by the CRTC.

These developments mean that it remains important for companies to effectively and efficiently navigate through Canadian advertising and marketing rules.  Some of the more interesting and noteworthy developments in 2010 and 2011 are discussed below.

CANADIAN ADVERTISING LAW: A YEAR IN REVIEW

Bell Canada pays $10 million AMP.

On June 28, 2011, the Competition Bureau (the “Bureau”) announced that Bell Canada agreed to stop making allegedly misleading claims regarding the prices of some of its services and pay an administrative monetary penalty (“AMP” – essentially a civil fine) of $10 million, the maximum penalty for misleading advertising under the Competition Act (the “Act”).  The Bureau challenged the accuracy of price claims made by Bell, as well as alleged hidden fees and fine-print disclaimers.  The Bureau’s concerns were based, among other things, on services that were literally not available at the advertised prices, including for Bell’s home phone, Internet, satellite TV and wireless services. Advertising claims can violate the misleading advertising provisions of the Act where they are either literally false or misleading (e.g., material information, such as price or important conditions, are not adequately disclosed).

New federal anti-spam legislation (Bill C-28).

In late 2010, the federal government introduced new federal anti-spam legislation (Bill C-28, the Fighting Internet and Wireless Spam Act – “FISA”).  Unlike similar U.S. legislation, FISA creates an “opt-in” regime for commercial electronic marketing, imposing both consent and form requirements, and also amends the Act to prohibit false or misleading commercial representations made electronically (e.g., in website headers, web links or website content).  In particular, the criminal and civil misleading advertising provisions of the Act, and related penalty provisions, have been broadened to expressly include misleading representations in the electronic and online environment.  Once FISA is in force, maximum penalties will be $1 million (for individuals) and $10 million (for corporations).

Bureau challenges Rogers’ performance claims.

The Bureau is currently challenging Rogers for allegedly making false performance claims in relation to its Chatr cell phone brand (in particular, claims that Rogers’ brand had fewer dropped calls than competing new entrants).  The Bureau is seeking a court order for Rogers to cease the conduct, a $10 million AMP, restitution for consumers and publication of a corrective notice.

Privacy Commissioner issues new online behavioural advertising (tracking) guidelines.

On December 6, 2011, the federal Privacy Commissioner issued new online tracking guidelines for advertisers which, among other things, restrict the tracking of children and tracking technologies without an opt-out mechanism.

New international do-not-call network. 

In October, 2011, the federal CRTC announced that, together with the Australian Communications and Media Authority, it has assembled 12 enforcement agencies to form an international do-not-call network (Australia, Canada, France, Hong Kong, Ireland, Israel, Korea, Mexico, New Zealand, Spain, the UK and the United States).  Telemarketing in Canada is already subject to competition law rules, the national Do Not Call List and provincial licensing requirements.

Recent speech by the Commissioner highlights enhanced Bureau enforcement.

On October 25, 2011, the Bureau published the Commissioner of Competition’s (the “Commissioner”) speech given at the 2011 CBA Annual Competition Law Conference.  It is fair to say the Commissioner’s speech presented a singular tone across the civil and criminal competition law areas: continued enforcement.  Some highlights of her speech regarding advertising include comments that misleading advertising “continues to be an area of concern”, that companies should not “mislead the public by hiding charges or conditions in fine print” or by “making claims you can’t back up” (i.e., false performance claims).  The Commissioner also said the Bureau continues to look for “tangible results for Canadians” including restitution for false advertising claims and settlements to stop false marketing claims.

Misleading advertising a continued enforcement priority. 

Enforcement continued to be a theme for the Commissioner in two talks in Vancouver in the fall of 2011, where she confirmed that misleading advertising and deceptive marketing remain enforcement priorities – or, as the Commissioner put it, “an area of concern.”  In general, the Commissioner indicated that the Bureau did not have the resources to pursue all misleading and deceptive marketing and, with respect to fraudulent marketing, that enforcement was akin to the “whack a mole” game in that once a deceptive marketer was “hit” in one jurisdiction, they frequently “arose” in another.  The Commissioner also highlighted some of the Bureau’s initiatives with other major enforcement agencies – for example, the U.K., Australia and the United States – that have proven effective in fighting cross-border deceptive marketing.

Canadian telemarketer receives a two-year prison sentence.

On October 3, 2011, the Bureau announced that a deceptive telemarketer was sentenced to two years in prison for a deceptive telemarketing scheme relating to the sale of business directories.  This is the most recently announced telemarketing case by the Bureau, which shows that the criminal deceptive telemarketing and misleading advertising provisions of the Act remain enforcement priorities.  The case also illustrates that, while uncommon for competition law offences, the Bureau is increasingly seeking penalties against individuals.  The Bureau has brought and sought penalties in a number of deceptive telemarketing cases in the past several years, many of which have involved cross-border marketing of business directories to U.S. and other international companies.  The Act prohibits false or misleading telemarketing representations and also prohibits telemarketers from engaging in other activities including: (i) requiring advance payments to receive a prize, (ii) offering gifts as inducements to purchase other products without fairly disclosing the value of the gifts, (iii) failing to provide adequate and fair disclosure of the number and value of prizes and (iv) requiring advance payments for products offered at inflated prices.  Telemarketers are also required to disclose certain information at the beginning of a call and other information at some point during a call.

Bureau negotiates settlement with Canadian Nivea distributor over performance claims.

On September 7, 2011, the Bureau announced a settlement with Nivea’s Canadian distributor, Beiersdorf Canada Inc., relating to allegedly false or misleading performance claims.  The Bureau took issue in this case with claims suggesting that the use of skin cream could lead to weight loss.  Under the consent agreement negotiated with the Bureau, Beiersdorf agreed to pay a $300,000 AMP, refund Canadian customers and remove its products from Canadian shelves.  Under the Act, false or misleading product performance claims can violate both the “general” criminal or civil misleading advertising provisions (sections 52 and 74.01) and a specific performance claim provision, which prohibits representations to the public regarding the performance of products that are not based on “adequate and proper testing”.  This section can be particularly relevant to advertising and marketing where the speed, efficiency or other product performance is a key marketing component.  While performance claims themselves are not prohibited, any product testing or verification must be conducted before a claim is made and the onus, if challenged, is on the person making the claim to verify the performance.   The Competition Tribunal (the “Tribunal”) has also established a non-exhaustive list of factors relevant to determining whether product testing is “adequate and proper”.

Albertans sentenced to jail time for cross-border deceptive telemarketing.

On August 30, 2011, the Bureau announced that five Alberta individuals were convicted and sentenced for deceptive telemarketing under the Act.

International sweep of social media sites.

In late 2010, the Bureau participated in an international sweep of social media sites to detect fraudulent and deceptive advertising on social networking sites.

AMPs imposed in job search service case.

In late 2010, the Tribunal imposed AMPs of $20,000 and $10,000 against parties in Canada (Commissioner of Competition) v. Premier Career Management Group Corp. for making misleading claims in relation to a job search service (following a Federal Court of Appeal decision reversing an earlier Tribunal decision finding the claims were not made “to the public”).

Bureau settles with two Canadian spa retailers.

In 2010, the Bureau announced it had reached settlements with two spa retailers in relation to allegedly false energy savings claims.  According to the Bureau, the retailers made misleading representations incorrectly conveying the impression that their hot tubs or insulation met the criteria of the ENERGY STAR Program.  This case is the most recent example of the Bureau’s action in the spa retailing sector.  The Bureau and the Canadian Standards Association have also jointly published enforcement guidelines addressed specifically to environmental marketing – Environmental Claims: A Guide for Industry and Advertisers – intended to provide companies with more guidance for environmental marketing and “consumers with greater assurance about the accuracy of environmental claims.”

Developments in 2011 include new cases, enforcement and legislation in most key areas including abuse of dominance (the Competition Bureau’s ongoing challenge of The Toronto Real Estate Board and CREA settlement in late 2010), criminal conspiracy (developments in price-fixing class action litigation and some Bureau enforcement), refusal to deal (several important private access section 75 cases, including a decision of the Federal Court of Appeal), contested mergers (in the waste and airline markets), price maintenance (the merchant fees case involving Visa and MasterCard) and misleading advertising (involving Bell Canada, Rogers and others).

The Competition Bureau is testing the new rules under Canada’s Competition Act, which came into force in 2009 and 2010, and private plaintiffs are creating new law in a number of ongoing competition/antitrust class actions in Canada (principally indirect purchaser price-fixing cases relating to the sale and supply of dynamic random access, or “DRAMs”, high fructose corn syrup and computer operating systems).

At the same time, several new pieces of legislation have been introduced including a federal omnibus crime bill, which will eliminate conditional sentences for some competition law offences, and sweeping new anti-spam legislation (Bill C-28 or “FISA“) that once in force will be among the strictest anti-spam regimes in the world.

The Commissioner of Competition, and other federal enforcement officials including the RCMP, have also expressed intentions to adopt tougher enforcement stances in relation to competition law and other white collar crime.

In general, these developments mean that it remains important for Canadian companies, organizations and their executives to maintain a practical awareness of Canadian competition law.

Some of the key competition law and related developments of 2011 include:

New RCMP Commissioner Announces New “Tough Line” on White-collar Crime

The new head of the RCMP, Bob Paulson, who was named new RCMP Commissioner in November, has vowed to take a new “tough line on white-collar crime” (See: New RCMP head takes tough line on white-collar crime), particularly in relation to major fraud and securities law investigations.

This announcement follows a recent law enforcement trend by the Conservative government generally and key Canadian regulatory officials.  For example, an extensive federal omnibus crime bill was recently passed that will, among other things, significantly restrict conditional sentences (e.g., sentences served in the community for criminal offences) including for some criminal offences under the Competition Act.

Supreme Court of Canada Denies Leave in Refusal to Deal Case: Nadeau Poultry Farm v. Groupe Westco Inc.

On December 22, 2011, the Supreme Court of Canada, per Justices McLachlin, Rothstein and Moldaver, denied leave to appeal in Nadeau Poultry Farm Limited v. Groupe Westco Inc. (see: Supreme Court of Canada denies leave in Nadeau Poultry Farm v. Groupe Westco Inc. (December 22 2011)).  The applicant in this section 75 refusal to deal case under the Competition Act, Nadeau Poultry Farm, was seeking leave to appeal an earlier Federal Court of Appeal decision that affirmed a Competition Tribunal decision dismissing its application in 2009 (see: Federal Court of Appeal dismisses appeal in Nadeau Poultry Farm Ltd. v. Groupe Westco Inc.).

Federal Government Passes Omnibus Crime Bill (Bill C-10) – Eliminates Conditional Sentences for Cartel (Conspiracy) and Bid-rigging Offences

On December 5, 2011, a federal omnibus crime bill (Bill C-10) was passed that will, among other things, eliminate conditional sentences of two years or less from being ordered by courts for violation of two of the core criminal offences under the Competition Act: criminal conspiracy agreements (section 45) and bid-rigging (section 47).

Privacy Commissioner Issues New Online Behavioural Advertising (Tracking) Guidelines

On December 6, 2011, the federal Privacy Commissioner issued new online tracking guidelines for advertisers which, among other things, restrict the tracking of children and tracking technologies without an opt-out mechanism.

Federal Government Raises the Possibility of Amending Canada’s Foreign Investment Rules – Again

Bloomberg reported that the federal Minister of Industry has again raised the prospect of amending Canada’s Investment Canada Act in remarks made in New York (see: Canada Open to Changing Foreign-Takeover Law, Paradis Says).  The Industry Minister’s comments closely follow a recent C.D. Howe Institute report calling for fundamental changes to Canada’s foreign investment rules to stimulate foreign direct investment in Canada, including a change to the overarching test for foreign investment approval (replacing the current “net benefit to Canada” test with a national interest test) (see: New Publications – C.D. Howe Institute Report – Reforming the Investment Canada Act: Walk More Softly, Carry a Bigger Stick).

Canadian Supreme Court Grants Leave in Pro-Sys/Microsoft and Sun-Rype Indirect Purchaser Competition/Antitrust Class Actions

The Supreme Court of Canada, per Justices LeBel, Fish and Cromwell, granted leave to appeal in the Pro-Sys Consultants Ltd. v. Microsoft Corporation and Sun-Rype Products Ltd. v. Archer Daniels Midland Company cases.  These cases relate to conflicting indirect purchaser class action certification decisions in British Columbia (companion decisions of the British Columbia Court of Appeal) and Quebec (a recent decision of the Quebec Court of Appeal) (See: Quebec Court of Appeal rejects B.C. Court of Appeal passing-on defence decisions in Pro-Sys and Sun-Rype and British Columbia Court of Appeal allows Microsoft appeal in Pro-Sys v. Microsoft – creates de facto passing-on defence).

Commissioner of Competition Addresses Current Enforcement Priorities in Two Wide-ranging Talks

The Commissioner of Competition, Melanie Aitken, addressed current enforcement priorities in two engaging and wide-ranging talks recently in Vancouver: a keynote speech at a reception hosted by the University of British Columbia, National Centre for Business Law at the Four Seasons and a Vancouver Competition Policy Roundtable meeting organized by Professor Tom Ross of the Sauder School of Business.

Competition Bureau Has “Serious Concerns” About Potential Competitive Effects of TMX/Maple Transactions

The Bureau recently announced that it had “serious concerns” about the Maple Group’s bid to acquire the TMX Group:

“The Commissioner advised Maple and TMX Group that she has serious concerns about the likely competitive effects of the proposed transactions in the current environment, primarily in connection with equities trading and clearing and settlement services in Canada.

The Commissioner indicated that she has not reached a final conclusion and that her current views may be affected by further factual information and developments, which may include changes in the applicable securities regulatory regime, and any commitments or other remedial measures that Maple may be prepared to take to address her concerns.

Maple and TMX Group intend to continue to work closely with staff of the Competition Bureau to address the Commissioner’s concerns, including by identifying appropriate remedial measures. As Maple has stated previously, it is committed to working constructively with all of the relevant regulators, including Canadian securities regulators, to address any questions they may have so that the proposed transactions can proceed in the best interests of TMX Group, its shareholders and the Canadian capital markets. Maple and TMX Group continue to strongly believe that the proposed transactions will substantially benefit all capital market participants.”

(TMX News Release, November 29, 2011)

Madam Justice Simpson Proposes Reforms to the Competition Tribunal

In a short but interesting recent note, Madam Justice Sandra J. Simpson has proposed that changes be made to the federal Competition Tribunal, including wider powers for the Tribunal to decide references and award damages for abuse of dominance (monopolization).

Quebec Court of Appeal rejects BC Court of Appeal passing-on defence decisions in Pro-Sys and Sun-Rype

The Quebec Court of Appeal unanimously overturned the earlier 2008 Quebec Superior Court decision in Option Consommateurs v. Infineon Technologies AG, (the ongoing indirect purchaser “DRAMs” case) which had earlier denied a motion to commence class action proceedings.

Supreme Court of Canada Denies Leave in U.S. Steel Investment Canada Case

On November 24, 2011, the Supreme Court of Canada denied leave in United States Steel Corporation et al. v. Attorney General of Canada. See: Supreme Court of Canada Judgements. See also: National Post – Supreme Court Won’t Hear U.S. Steel Appeal.  This landmark Investment Canada Act dispute, between the Canadian Government attempting to enforce undertakings provided by U.S. Steel, has since been settled.

Competition Bureau Announces Quebec Sewer Services Bid-rigging Cartel

On November 22, 2011, the Competition Bureau announced that criminal charges had been laid against six companies and five individuals accused of rigging bids for provincial and municipal contracts for sewer services in Montreal (see: Competition Bureau Exposes Sewer Services Cartel in Quebec and Backgrounder – Competition Bureau Exposes Sewer Services Cartel in Quebec).  While the Bureau has yet to bring a section 45 conspiracy case under the amended conspiracy provisions of the Competition Act, it has been very active in bringing bid-rigging cases under section 47 of the Act.

C.D. Howe Institute Issues Report on Competition Bureau Enforcement and Strategic Alliances

On November 10, 2011, the C.D. Howe Institute issued a report reviewing the Competition Bureau’s enforcement of the criminal conspiracy offences of the Competition Act, enforcement efforts in relation to strategic alliances and policies regarding the issuance of binding advisory opinions.

Competition Tribunal Grants CREA Leave to Intervene in TREB Abuse of Dominance Case

On November 2, 2011, Madam Justice Simpson of the federal Competition Tribunal granted leave to Realtysellers and The Canadian Real Estate Association to intervene in the Bureau’s abuse of dominance (monopoly) case against The Toronto Real Estate Board.

CRTC and 12 International Enforcement Agencies Form International Do Not Call Network

The federal Canadian Radio-television and Telecommunications Commission announced that, together with the Australian Communications and Media Authority, it has assembled 12 international enforcement agencies to form an International Do Not Call Network.  See: CRTC announces creation of international network to facilitate cooperation on telemarketing enforcement.

Commissioner of Competition Speech Highlights Enhanced Competition Bureau Enforcement

On October 25, 2011, the Competition Bureau published the Commissioner’s speech given at the 2011 Canadian Bar Association’s Annual Competition Law Conference in Ottawa.  It is fair to say that the Commissioner’s recent speech presented a singular tone across the civil and criminal competition law areas: continued enhanced enforcement.

Ottawa Bid-rigging Case to Go to Trial

On October 5, 2011, the Ottawa Business Journal, Ottawa Citizen and Vancouver Sun reported that Ontario Justice Ann Alder ruled that an Ottawa bid-rigging case in the technology sector can go to trial.  In this case, the Competition Bureau alleged that a number of companies, including TGP Technology, Spearhead Management, The Devon Group, Brainhunter, Nortak Software and Tipacimowin Technology, rigged bids in relation to IT contracts totaling about $67 million issued by the Canada Border Services Agency, Department of Transport and Public Works (see: Competition Bureau Announces Charges Against Companies Accused of Rigging Bids for Government of Canada Contracts and Backgrounder).  Charges were also dismissed against several companies.

Competition Bureau Issues Updated Merger Enforcement Guidelines

On October 6, 2011, the Competition Bureau issued its updated Merger Enforcement Guidelines.  The Bureau’s new MEGs, which set out its approach to the substantive review of mergers in Canada, are the first update to the MEGs since 2004 and the result of public consultations in 2010 and 2011.

Telemarketer Receives Two-Year Prison Sentence

On October 3, 2011, the Competition Bureau announced that a deceptive telemarketer has been sentenced to two years in prison in relation to a deceptive telemarketing scheme relating to the sale of business directories (see: Deceptive Telemarketer Receives a 2-year Prison Sentence).

Competition Tribunal Grants Leave in Refusal to Supply Data Case

In a significant recent decision by the Competition Tribunal, the Tribunal granted leave to the Used Car Dealers Association of Ontario to make a section 75 refusal to deal application relating to a refusal by the Insurance Bureau of Canada to supply data to the UCDA.  This recent case, reasons for which were issued on September 9, 2011, is significant, in that the UCDA was seeking leave to make its application in light of a longstanding adverse decision – the Warner music case (which has stood as a barrier to invoking section 75 in relation to refusals to licence intellectual property).

Competition Bureau Negotiates Settlement with Canadian Distributor of Nivea Products over Allegedly Misleading Performance Claims

On September 7, 2011, the Competition Bureau announced that it had reached a settlement with Nivea’s Canadian distributor, Beiersdorf Canada Inc., relating to allegedly false or misleading performance claims in its advertising.  In particular, the Bureau took issue with claims that suggested that the use of skin cream could lead to weight loss.  Under the terms of the consent agreement negotiated with the Bureau, Beiersdorf has agreed to pay an “administrative monetary penalty” or “AMP” (essentially a civil fine) of Cdn. $300,000, refund Canadian customers and remove its products from Canadian shelves.

Competition Bureau Revisits its Self-regulated Professions Study After Four Years

On September 2, 2011, the Competition Bureau released its “ex-post assessment” of its 2007 Self-Regulated Professions Study (Self-regulated professions – Balancing competition and regulation (December, 2007)).  According to the Bureau, its new Study “surveys and assesses developments that have taken place relating to recommendations made in [its] 2007 Study” and “provides an overview of the progress made since 2007” to the earlier recommendations made by the Bureau.

Alberta Telemarketers Sentenced to Jail Time for Cross-border Deceptive Telemarketing Scheme

On August 30, 2011, the Competition Bureau announced that five individuals in Alberta were convicted and sentenced of deceptive telemarketing under the Competition Act.

Competition Bureau Issues New Merger Remedies Study

On August 11, 2011, the Competition Bureau issued a Merger Remedies Study, summarizing its review of the effectiveness of merger remedies negotiated in 23 Canadian merger cases between 1995 and 2005.  According to the Bureau, the results of its study will be used to revise its Information Bulletin on Merger Remedies in Canada first issued in 2006 (see: Information Bulletin on Merger Remedies in Canada) and its companion consent agreement outline template.

Ontario Used Car Dealers Association Attempts to Go Around Landmark Warner Decision in Data Refusal to Supply Case

In a very interesting refusal to supply case currently before the Competition Tribunal, the Used Car Dealers Association of Ontario sought leave from the Competition Tribunal for the re-supply by the Insurance Bureau of Canada of data used in one of the UCDA’s information products for members.

Montreal Company Pleads Guilty in Bid-rigging Case

On July 19^th 2011, the Competition Bureau announced that a Montreal company, Les Entreprises Promécanic Ltée, pleaded guilty to three charges of bid-rigging and was fined $425,000 for its alleged role in rigging bids in relation to residential highrise building ventilation contracts in Montreal.  According to the Bureau, the Montreal company admitted that it was involved in coordinating with competitors to pre-determine the outcome of bids. Interestingly, this case also included an internal compensation arrangement between the parties to the bid-rigging arrangement to ensure that contracts were awarded to the pre-arranged company.

The Competition Bureau’s Application to Block the Air Canada/United Continental Joint Venture – A Few Interesting Aspects

On June 27th 2011, the Competition Bureau announced that it would seek to block a proposed joint venture between Air Canada and United Continental which, according to the Bureau, would “monopolize ten important Canada/United States routes and substantially reduce competition on nine additional routes.”  This case is one of two contested merger cases recently brought by the Bureau, the first in six years, and will, among other things, test the new civil agreement provision of the Competition Act (section 90.1).

Bell Canada Agrees to Pay $10 Million Fine in Misleading Advertising Case

On June 28th, the Competition Bureau announced that Bell Canada has agreed to stop making allegedly misleading claims relating to the prices for its services and to pay an administrative monetary penalty or “AMP” (essentially a civil fine) of $10 million, the maximum penalty for misleading advertising under the Competition Act.

Maple Group Launches Cdn. $3.7 Billion Hostile Bid for TMX Group Inc.

On June 13, 2011, the Maple Group Acquisition Corp., a consortium of 13 Canadian financial institutions, launched a Cdn. $3.7 billion hostile bid to acquire 70% of the TMX Group Inc. for $48 per share.

Two More Individuals Plead Guilty in Quebec Price-fixing Case

On June 10, 2011, the Competition Bureau announced that two more individuals pleaded guilty in the Quebec gasoline price-fixing case to fix the price of gasoline at the pump in Quebec regional markets.

U.S. Federal Trade Commission Brings $450 Million Internet Fraud Case Against Alberta Online Operator

The U.S. Federal Trade Commission announced that it has filed a $450 million internet fraud civil suit against an Alberta online operator.

Competition Bureau Issues No Action Letter in TMX/LSE Deal

The Wall Street Journal reported that the Competition Bureau issued a no action letter in the proposed TMX Group Inc. / London Stock Exchange Group plc transaction.

Further Guilty Plea in Quebec Gasoline Price-fixing Cartel

The Competition Bureau announced that a further individual pleaded guilty and was fined in the Quebec gas price-fixing cartel.  In making the announcement, the Bureau said that Micheline Lapointe-Cabana, owner of a service station in Magog, Quebec operated under the Petro-Canada banner, was sentenced to personally pay a fine of $20,000.

Competition Bureau Files Abuse of Dominance Case Against the Toronto Real Estate Board

On May 27, 2011, the Competition Bureau commenced an abuse of dominance case against The Toronto Real Estate Board before the Competition Tribunal.

Competition Bureau Issues New Fee and Service Standards Handbook for Written Opinions

On May 18, 2011, the Competition Bureau issued its new Fee and Service Standards Handbook for Written Opinions to reflect the significant amendments to the Competition Act that came into force in 2009 and 2010 (see: Competition Bureau Updates Fee and Service Standards Handbook for Written Opinions).

Customer Allocation Conspiracy in the Refrigeration and Food Service Equipment Industry

The Competition Bureau announced that Kason Industries Inc. plead guilty for participating in a customer allocation conspiracy and was fined $250,000 by the Federal Court of Canada.

British Columbia Court of Appeal Allows Microsoft Appeal in Pro-Sys v. Microsoft

On April 15, 2011, the British Columbia Court of Appeal allowed Microsoft’s appeal in the Pro-Sys v. Microsoft class action case.  This important decision, in which the Court of Appeal dismissed the plaintiffs’ action and set aside the earlier class certification order, was issued concurrently with a second Court of Appeal judgment in Sun-Rype Products v. Archer Daniels.  These decisions are now subject to an appeal to the Supreme Court of Canada, based on the unsettled ability of indirect purchaser plaintiffs to commence competition/antitrust class actions in Canada.

Competition Bureau Announces New Size of Transaction Threshold for Mergers for 2011

The Competition Bureau announced that the pre-merger notification transaction-size threshold for 2011 will increase to $73 million (see: 2011 Pre-Merger Notification Transaction-Size Threshold).

Competition Bureau to Challenge Completed BC Landfill Merger

The Competition Bureau announced that it has applied to the Competition Tribunal for a Tribunal order to dissolve CCS Corporation’s acquisition of Complete Environmental Inc., owner of the proposed Babkirk Secure Landfill in Northeastern British Columbia (see: Competition Bureau Challenges BC Landfill Merger).  Final arguments were recently heard by the Tribunal in this merger to monopoly case which, together with the ongoing Air Canada / United Continental case, is one of two contested mergers, the first in Canada in six years.

Spa Retailers Out of Hot Water After Settlement with Bureau for Allegedly False Energy Savings Claims

The Competition Bureau announced that it reached a settlement with two spa retailers in relation to allegedly false energy savings claims (see: Spa Retailers Required to Stop Making False ENERGY Star Claims). According to the Bureau, the retailers made misleading representations incorrectly conveying the impression that their hot tubs or insulation met the criteria of the ENERGY STAR Program.

Canada Passes Federal Anti-Spam Legislation – Bill C-28 – the Fighting Internet and Wireless Spam Act

In late 2010, Canada passed new anti-spam legislation (Bill C-28) which will, once in force, be among the strictest anti-spam regimes in the world.

The Canadian Marketing Association will be holding a one-day seminar on January 24, 2012 on non-for-profit marketing: “Marketing Online Successfully”.

From the Canadian Marketing Association:

“If you’re a not-for-profit marketer who’s looking for a quick way to become more comfortable with and proficient at Internet direct marketing – this seminar is for you!

With the CMA’s Intensive One-Day Internet Marketing Seminar for Not-For-Profit marketers, you’ll save time, skip the aggravation and quickly move up your Internet marketing learning curve as you join a select group of Canadian not-for-profit marketers for a practical, interactive, hands-on session on Internet direct marketing.

Content areas will include: recap of online Canadians’ habits and usage; discussion about mobile, video and other upcoming trends; review of results tracking methodologies; in-depth look at direct response Internet media and pay per click search engine marketing as a basis for building SUCCESSFUL acquisition and advocacy based direct response campaigns; and real life examples and case studies of not for profit marketers who are doing Internet marketing right.

The seminar is led by Jay Aber, President of The Aber Group Inc., a leading Internet-based direct marketing firm whose clients include Plan Canada, WWF-Canada, Heart & Stroke, Habitat for Humanity, American Express, Sun Life & Stratford Shakespeare Festival among many others. In addition to his other accomplishments, Jay chaired the Digital Marketing Council for the CMA for six years and wrote and taught the inaugural CMA’s e-Marketing (now Digital Marketing) course.”

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For more information see:

Canadian Marketing Association – Not-For-Profit Seminar: Marketing Online Successfully

In making the announcement, which were part of remarks made at the Marketing and the Law Conference in Toronto (see: “Respecting Privacy Rights in the World of Online Behavioural Advertising”, Remarks by Jennifer Stoddard, Privacy Commissioner of Canada at the Marketing and the Law Conference (Toronto, December 6, 2011)), the Privacy Commissioner said:

“The use of online behavioural advertising has exploded and we’re concerned that Canadians’ privacy rights aren’t always being respected. 
Many Canadians don’t know how they’re being tracked – and that’s no surprise because, in too many cases, they have to dig down to the bottom of a long and legalistic privacy policy to find out. …

Some people like receiving ads targeted to their specific interests.  Others are extremely uncomfortable with the notion of their online activities being tracked.  People’s choices must be respected.”

The new guidelines, intended to assist organizations engaged in online behavioural advertising to ensure that their practices are “fair and transparent” and compliant with the Personal Information Protection and Electronic Documents Act (PIPEDA), say that information about behavioural advertising should be clear, obvious and understandable and that people should be able to easily able to opt out.  (The Office of the Privacy Commissioner defines “behavioural advertising” as tracking consumers online activities over time in order to deliver advertisements targeted to their inferred interests.)

The new guidelines set out several specific restrictions regarding the use of behavioural advertising, including the ability to opt out, restricting the use of “web bugs or web beacons, super cookies, pixel hacks or device fingerprinting” or other types of “covert tracking” technologies where a user is unaware and cannot decline behavioural advertising and restrictions on the collection of certain types of health information, including health information.

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For the complete news release see:

New online advertising guidance sets out restrictions for tracking

For the new guidelines see:

Privacy and Online Behavioural Advertising

From the Canadian Institute:

“We have obtained the highest quality speakers to present you with cutting edge analysis and practical guidance on the latest issues in this constantly evolving area of law. In fact, leaders in this field have been relying on our conference year after year to hone their skills, so join us at The Canadian Institute’s 18th Annual Advertising & Marketing Law program and be equipped with the tools necessary to be completely confident in your practice.  Keynote Address: Melanie Aitken, Commissioner of Competition, Competition Bureau Canada Recent Enforcement Initiatives and Future Directions of the Competition Bureau.

In the past year we have already seen, and will continue to see significant developments. You will learn about them all through our stimulating and interactive mix of sessions, including:

The latest need to know enforcement trends and priorities of the Competition Bureau

An in-depth analysis of the Anti-Spam legislation – in anticipation of it being proclaimed into force

The noteworthy differences between our Anti-Spam legislation and the U.S. Can-Spam Act

A practical session on drafting disclaimers on all forms of media

The most up-to-date tips on running contests

Risk mitigation for all emerging and recently revived marketing & advertising techniques

The latest issues and trends from the U.S. and how they may affect you”

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For more information see:

The Canadian Institute – Advertising and Marketing Law Conference

Our new blog will include news and developments in Canadian advertising and marketing law, key resources and links and overviews of advertising law, the new anti-spam legislation (Bill C-28), comparative advertising, promotional contest law, misleading advertising, packaging and labeling laws and telemarketing.