Archive for March, 2012
Advertising Standards Canada (ASC) will be holding an introductory session to the Canadian Code of Advertising Standards in Toronto on March 27, 2012 entitled Introduction to the Canadian Code of Advertising Standards & Consumer Complaints Procedure.
The Competition Bureau announced earlier today that five companies and three individuals were found by the Ontario Superior Court of Justice to have violated the Competition Act in relation to a deceptive marketing operation (see: Competition Bureau Secures Over $9 Million and Money Back to Victims for Business Scam).
On March 1, 2012, the omnibus crime bill currently making its way through the House and Senate (Bill C-10) passed third reading and was adopted by the Senate with 6 amendments (adopting a February 28, 2012 Senate Committee Report – see: Standing Senate Committee on Legal and Constitutional Affairs – Ninth Report).
Bill C-10, if it comes into force, will amend the current section 742.1 of the Criminal Code to provide that where a person is convicted of an offence and the court imposes a sentence of less than two years, the court may impose a conditional sentence (i.e., that the sentence be served in the community), except in certain circumstances.
On February 29, 2012, Industry Canada announced that the threshold for review for WTO investors or vendors, other than Canadians, is now C $330 million for 2012 (increased from C $312 million in 2011).
The new threshold was published in the Canada Gazette Part I on February 25, 2012 (see: Canada Gazette).
The monetary threshold for review under the Investment Canada Act (the “ICA”) for WTO investors is both higher than the general thresholds under the ICA, which are $5 million and $50 million for direct and indirect transactions respectively, and increased annually based on GDP growth.
As our new competition law handbook for associations is now out, The Competition Law Guide for Trade Associations in Canada, we thought we would post a few of the more interesting competition/antitrust association cases from 1905 to 2012.
Our small tiptoe through the history of associations and competition law will include cases involving ambulance operators, banks, building contractors, business forms suppliers, coal dealers, corrugated box manufacturers, corrugated metal pipe manufacturers, electrical contractors, fruit growers, gypsum dealers and manufacturers, insurance salespersons, lawyers, mandarin orange importers, notaries, pharmacists, paper mills, plumbing contractors and suppliers, real estate agents, softwood lumber dealers, surveyors and wholesale grocers, among others.
We’ll wrap up with the ongoing TREB case, the CREA case (settled in the fall of 2010) and a few of the more interesting recent international association cases over the past decade. The following are a couple more golden oldies from the “trusts” era:
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The King v. Clarke (1907)
In The King v. Clarke, the president of the Alberta Retail Lumber Dealers’ Association was accused of conspiracy under section 498 of the Criminal Code. This case involved an agreement among the members of the association to fix the price of lumber in various parts of Alberta, including penalties for non-compliance and pressure on lumber manufacturers to refuse to supply to non-members. The association’s by-laws expressly provided for association price lists, the regulation of price in different geographic regions and penalties for non-compliance by members. The accused was convicted at trial, which was affirmed on appeal.
R. v. McMichael (1907)
In R. v. McMichael, the manager of the Dominion Radiator Company was accused of conspiracy under section 520 of the Criminal Code. This case involved agreements between the Master Plumbers Association and the Central Supply Association, including the Dominion Radiator Company, whereby plumber members would buy all of their goods from suppliers that agreed to only supply to the general public and non-member plumbers at higher prices. The accused was found guilty and ordered to pay a fine and serve three months in prison.
CANADIAN CONTEST RULES/PRECEDENTS
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We offer a selection of Canadian contest rules and forms for random draw, skill and other common types of Canadian contests (i.e., contest precedents and forms).
For more information see Canadian Contest Forms/Precedents.
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On February 28, 2012, the Supreme Court of Canada awarded compensatory and punitive damages to a contest entrant for misleading claims in a contest mail-out (see: Jean-Marc Richard v. Time Inc. and Time Consumer Marketing Inc.).
The decision is interesting not only that a contest case made it to the Supreme Court, but that our highest court also allowed punitive damages. The Supreme Court also had interesting comments in this Quebec Consumer Protection Act case regarding the importance of the “general impression” test for evaluating advertising (the “general impression” is also relevant for evaluating whether advertising is false or misleading under the federal Competition Act).
In this case, the plaintiff received an “Official Sweepstakes Notification” that suggested he won USD $833,337. The prize notification letter included conditional clauses which began “If you have and return the Grand Prize winning entry in time” and information that the recipient would qualify for a $100,000 bonus prize if the entry was validated within five days. The mailing also included the official rules in small print and an offer to subscribe to Time magazine. The rules provided that a winning number had been pre-selected by computer and that the holder of the number could receive the grand prize only if the reply coupon was returned by the deadline (otherwise the prize winner would be selected by random draw from all eligible entries with odds of winning of about 1 in 120 million).
The plaintiff returned the coupon and subscribed to Time. Though he began receiving his magazines, no cheque arrived. Contacting Time, he was told that he would not be receiving a cheque, his document had not contained the winning entry for the draw and was merely an invitation to participate in the sweepstakes.
The Competition Bureau announced earlier today that it was kicking off Fraud Prevention Month with a series of panel discussions on fraud prevention across Canada that will assemble experts from law enforcement agencies, academics and business and consumer groups.
In making the announcement, the Bureau said:
“The Competition Bureau is organizing a series of panel discussions on fraud prevention across Canada that will bring together experts from law enforcement agencies, academia, as well as businesses and consumer groups. The focus of these discussions will be on practical strategies for fighting fraud and raising awareness so that Canadians can protect themselves in the marketplace, particularly in the online and mobile environments. These events will take place at the University of Ottawa on March 6, at the University of Alberta in Edmonton on March 8, and at Concordia University in Montreal on March 13.
Fraud is a crime that affects individuals, businesses and the economy as a whole. ‘It’s a matter of confidence,’ said Melanie Aitken, Commissioner of Competition. ‘Consumers need to know enough to make informed purchasing choices, based on advertising that is truthful and complete.’
The Competition Bureau, along with the Fraud Prevention Forum, plays an important role in helping Canadians get the information they need to be informed and confident consumers. Consumers also have a role to play in stopping fraud by arming themselves with the facts and reporting fraud when they encounter it.
The Fraud Prevention Forum, chaired by the Competition Bureau, is comprised of more than 125 private sector firms, consumer and volunteer groups, government agencies, and law enforcement organizations that have come together to help combat fraud and raise awareness. During Fraud Prevention Month, Forum members will participate in a number of targeted activities across the country, designed to raise awareness among consumers and businesses about the dangers of fraud.”
Recent fraud related cases that the Bureau has been involved in include bid-rigging (see: here and here), price-fixing (see: here, here, here, here, here and here), market division (see: here), deceptive telemarketing (see: here and here) and deceptive marketing cases (see: here and here).
On February 13, 2012, the Federal Court of Appeal released an important limitations period judgment in Garford Pty Ltd. v. Dywidag Systems International.
In this case, the Australian company Garford commenced an action against Dywidag Systems International and several individual defendants seeking damages for alleged infringement of some of Garford’s Canadian patents and based on alleged violations of section 45 of the Competition Act (criminal conspiracy agreements).
In a lower court decision, the Federal Court granted the defendants summary judgment dismissing Garford’s claim on the basis that it was limitation barred under the Competition Act.
Section 36 of the Competition Act contains specific limitation periods that require, among other things, claims to be brought within two years of the relevant conduct (“two years from … the day on which the conduct was engaged in”).
Garford appealed, and the Federal Court dismissed its appeal. The Court of Appeal held that it could find no error in the lower court’s application of the law or factual findings and was “in substantial agreement with [its] reasoning with respect to the limitation period.”
Garford had argued that the lower court erred in failing to hold that the “discoverability principle” applied to extend the limitation period under section 36. The “discoverability principle” or “rule” operates on the theory that, in competition law matters, the start of the limitation period should be postponed until the time a plaintiff knew (or ought to have known) of the anti-competitive conduct.
The Court of Appeal held that the issue of discoverability did not arise on the facts of this case because, among other things, between April 10, 2006 (the date on which Garford’s solicitors sent a cease and desist letter to the defendants) and the date the action was commenced (August, 2008 – more than two years later) there were no new facts relevant to the alleged breaches of section 45. In the Court’s words: “the information available to Garford on April 10, 2006 was essentially the same information it had when it commenced the action.”
Interestingly, however, the Court of Appeal left the door open for the discoverability rule to apply in other cases:
“For these reasons, the judge’s findings of fact, which on the applicable standard of review cannot be set aside in this case, preclude any argument based on discoverability, assuming without deciding, it is legally available.”
As such, the applicability of the discoverability rule as a mechanism to extend the limitation period under section 36 of the Competition Act remains unsettled.
Templates/precedents and checklists to run promotional contests in Canada
Templates/precedents and checklists to comply with Canadian anti-spam law (CASL)
