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.

“Mini-Conference”.  Montreal, March 8, 2012.  In celebration of, and cooperation with, the Canadian round of the Jessup, the CCIL is holding a mini-conference in Montreal, integrated with the Jessup competition.  This conference is free to CCIL members, and those who become CCIL members between now and then.  (If you attended the November conference, you are a member.  If not, please follow the link below to find out more about becoming a member.)  The conference will address themes drawn from this year’s Jessup problem and from both the CCIL 2011 conference (culture and international law) and the 2012 conference (international law and crises and emergencies).  For more see: CCIL – Mini-conference

2012 Annual Conference.  Save the Date!  The 2012 CCIL Annual Conference will be held on November 8-10, 2012 in Ottawa.  The theme is International Law and Crises and Emergencies.  More details and a call for papers will follow in a few weeks.  We look forward to welcoming Philippe Sands as one of our keynote presenters.

The “Four Societies”.  The CCIL in association with its American, Japanese and Australian/New Zealand counterparts has issued a call for papers for the next “Four Societies” workshop, scheduled for California in September 2012.  Responses to the call are due on March 1, 2012.  For more see: CCIL – Call for Papers – “International Law and Disasters” – The Fourth International “Fostering a Scholarly Network” Four Societies Conference

The CCIL Review.  We are pleased to announce the “rolling start” or a new “blournal” – a combination of a blog and a journal.  We have a number of articles that have now been posted.  Students have crafted these as part of directed research projects.  We welcome more contributions!  If you have students who you are willing to supervise for the purposes of producing new articles, please let me know.  (And yes, there is a readership – we have even received press inquiries in response to some of the articles).  For more see: CCIL – CCIL Review

The Veteran’s Scholarship.  The CCIL is fundraising for a new scholarship.  The CCIL Veterans Scholarship will provide tuition support to a Canadian Forces veteran with an interest in international humanitarian law entering or pursuing legal studies at the JD or LL.B. level in a Canadian law school.  As president of the CCIL, I am actively fundraising in support of this scholarship along with some former students who are now practicing law.  To this end, we are completing a series of endurance sporting events through 2012.  (Tomorrow, I lace on skates, skis and shoes, in that order, for the first one.)  You can find our more here: CCIL Veterans Scholarship.  We would be very grateful if you would please consider supporting this initiative.  Donations can be made on-line through CanadaHelps (again, follow the link above).  Moreover, our team — Citizen Athlete — is looking for more members willing to make this their fundraising goal for 2012.  Please contact me if you are interested.

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For more information see the CCIL website at:

Canadian Council on International Law

In Pro-Sys, a majority of the British Columbia Court of Appeal set aside an earlier Supreme Court of British Columbia decision granting certification and dismissed the action on the basis that the representative plaintiffs, as indirect purchasers, had no cause of action maintainable in law.

In Sun-Rype, the British Columbia Court of Appeal similarly set aside an earlier Supreme Court of British Columbia decision granting certification for indirect purchaser plaintiffs, holding that they had no cause of action (and remitted the application to the trial court for consideration with respect to the direct purchaser plaintiffs).

These companion decisions by the British Columbia Court of Appeal were in contrast and conflict to a recent Quebec Court of Appeal decision in Option Consommateurs v. Infineon Technologies AG, which unanimously overturned a 2008 Quebec Superior Court decision denying a motion to commence indirect purchaser class action proceedings.

Presumably based on the uncertainty of indirect purchasers’ ability to commence price-fixing class actions in Canada (the Supreme Court does not issue reasons in leave applications), and the conflicting existing case law including these recent British Columbia and Quebec appellate decisions, the Supreme Court granted leave to appeal on December 1, 2011 (see: Canadian Supreme Court Grants Leave in Pro-Sys/Microsoft and Sun-Rype Indirect Purchaser Competition/Antitrust Class Actions).

After some years of unsettled law and conflicting decisions, it looks as though after June plaintiff and defense counsel, and their clients, will receive some long-awaited certainty regarding the ability of indirect purchasers to commence price-fixing class actions and the status of the passing-on defense in Canada.

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For more see: Canadian Supreme Court Grants Leave in Pro-Sys/Microsoft and Sun-Rype Indirect Purchaser Competition/Antitrust Class Actions, Quebec Court of Appeal Rejects BC Court of Appeal Passing-on Defence Decisions in Pro-Sys and Sun-Rype, British Columbia Court of Appeal Allows Microsoft Appeal in Pro-Sys v. Microsoft – Creates de facto Passing-On Defence

For more about our firm and our practices see:

 Hakemi & Company

Conservative Justice and Public Safety Ministers Rob Nicholson and Vic Toews are asking Senators to “expeditiously” approve the Bill.

Bill C-10, which completed second reading in the Senate in December, would, among other things, eliminate conditional sentences of two years or less (i.e., sentences served in the community rather than a correctional facility) 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 agreements (section 47).

This would be achieved by amending section 742.1 of the Criminal Code to restrict the availability of conditional sentences for all offences for which the maximum term of imprisonment is 14 years or life (and for specified offences, prosecuted by way of indictment, for which the maximum term of imprisonment is 10 years).

Both sections 45 (criminal conspiracy agreements, including price-fixing and market division/allocation agreements between competitors) and 47 (bid-rigging) of the Competition Act are indictable offences, subject to maximum terms of imprisonment of 14 years (increased as a result of recent amendments to the Competition Act in 2009 and 2010).

Given that the Competition Act has been amended to significantly increase the penalties for criminal conspiracy offences (and lower the enforcement bar by removing the former competitive effects test – see: Competition Act amendments), Bill C-10 will, if enacted, further increase the potential risk for individuals violating these key criminal offences under the Act.

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For more about the criminal conspiracy rules in Canada and our services see:

Conspiracy (Cartels)

Hakemi & Company

The National Competition Law Section of the Canadian Bar Association will be holding a teleconference on February 29, 2012 entitled: “Criminal Conspiracy or Legitimate Competitor Collaboration?  Tips for In-House Counsel”

From the Canadian Bar Association:

“Authorities have recently noted their first conviction under Canada’s amended conspiracy law, commenting: “[This investigation] highlights the Bureau’s reinvigorated mandate to stop consumer harm caused by price-fixing, and to secure significant fines for these serious criminal offences.” 

In-house counsel practising competition law are often asked to evaluate the competition law risks associated with activities such as joint selling initiatives, joint ventures, buying groups, participation in trade associations, and merger transactions.  As such, in-house counsel are an organization’s first line of defence to identify potential illegal arrangements to fix prices, allocate markets or restrict output, that create risks of criminal investigation and prosecution; and that can result in significant fines, imprisonment, damage to an organization’s reputation, and civil damage claims.

The line between criminal conspiracies and pro-competitive strategic alliances among competitors, however, can at times be difficult to detect. It is critical that in-house counsel have the tools necessary to distinguish benign or pro-competitive activity from potentially criminal conduct.”

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For more about this teleconference see:

Criminal Conspiracy or Legitimate Competitor Collaboration?  Tips for In-House Counsel

For more about Canada’s amended conspiracy laws and our compliance services see:

Conspiracy (Cartels)

Competition Law Compliance Programs

Hakemi & Company

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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For more about Canadian advertising and marketing law see:

Misleading Advertising

Canadian Advertising & Marketing Law

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We provide competition and foreign investment law services to clients across Canada and internationally.

Maple’s offer to acquire the TMX is subject to approval from provincial securities regulators and the Competition Bureau, which commenced a second-stage review in November, 2011.

Some of the potential issues the transaction raises include a high degree of concentration in the trading services market and access and pricing issues in relation to clearing and settlement services, as in addition to combining the TMX with Alpha (Canada’s second largest exchange) the transaction would also include the acquisition of CDS Inc., Canada’s currently not-for-profit equity and fixed-income securities clearing operator.

The Globe and Mail has reported for example that the Competition Bureau said Tuesday that “significant and material change to the competitive consequences to the proposed transaction would be required to sufficiently address the Commissioner’s concerns” (see: Hurdles remain on TMX-Maple proposal, regulator says).

According to Bloomberg, however, Maple has “recently” submitted a pricing model for CDS and proposed remedies to address concerns relating to the securities trading market.

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For more about Canadian merger control see: Merger Control

In making the announcement, the Bureau said:

“Two of the accused, Gary Neiderer and Fabien Chouinard are territorial managers employed by Sonic. They were sentenced today to fines of $3,000 and $4,000 respectively. The other five accused are service stations owners. Jacques Blais and Louis Blais operated under the Shell banner. Luc Fecteau, Yvan Grondin and Jacques Robert operated under the Esso banner. The five owners were each sentenced to fines of $5,000.

Charges were laid in June 2008 and July 2010 against 38 individuals and 14 companies for fixing the price of gas at pumps in Victoriaville, Thetford Mines, Magog and Sherbrooke, Quebec. As of today, 21 individuals and six companies have pleaded guilty in this case, with fines totalling over $2.8 million. Of the 21 individuals who have pleaded guilty, six have been sentenced to terms of imprisonment totalling 54 months.”

The Bureau has also significantly expanded its summary of investigations into gasoline pricing in Canada, presumably based on the number of complaints and inquiries the Bureau receives relating to gas prices – see: Investigating Cartels – Gas Prices.

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For more information about price-fixing laws in Canada see:

Conspiracy (Cartels)

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.

“Accordingly, it is not plain and obvious that the plaintiffs’ claim fails to disclose a reasonable cause of action regarding the tort of conspiracy.  Indeed, in my view the plaintiffs have alleged that the defendants engaged in a classic type of conspiracy, namely, combining together to drive a business competitor and their novel business model out of the marketplace.

While the plaintiffs candidly admit a lack of detailed knowledge as to all of the factual nuances of the conspiracy, this is hardly surprising given the nature of the allegation.  As Cumming J. aptly stated, when faced with similar circumstances in North York Branson Hospital v. Praxair Canada Inc., [1998] O.J. No. 5993 (S.C.J.), at para. 22:

‘In truth, the very nature of a claim of conspiracy is that the tort resists detailed particularization at early stages.  The relevant evidence will likely be in the hands and minds of the alleged conspirators.  Part of the character of a conspiracy is the secrecy and the withholding of information from alleged victims.  The existence of an underlying agreement bringing the conspirators together, proof of which is a requirement borne by a plaintiff, often must be proven by indirect or circumstantial evidence.  A conspiracy is more likely to be proven by evidence of overt acts and statement by the conspirators from which the prior agreement can be logically inferred.  Such details would not usually be available to a plaintiff until discoveries.  These considerations and the general theme of Hunt, instructing courts not to shy away from difficult litigation, also militate against holding pleadings in civil conspiracy cases to an extraordinary standard.’”