Archive for the 'Amendments' Category
February 16, 2013
Earlier this month, the Ontario Court of Appeal dismissed an appeal in the Yellow Pages Marketing misleading advertising case (see: Competition Bureau v. Yellow Pages Marketing).
In this case, an individual found liable last year by the Ontario Superior Court to pay a $500,000 “administrative monetary penalty” or “AMP” for misleading advertising appealed the lower court’s judgment (see: here). The Ontario Superior Court had found a group of companies and individuals liable under the civil misleading advertising provisions of the Competition Act for sending deceptive faxes designed to lead recipients to believe that they were merely confirming online directory information for the legitimate Yellow Pages Group (“YPG”) when, in fact, the companies, that were unrelated to YPG, used fine print disclaimers to sign-up recipients to new two-year online directory contracts with significant fees.
In finding the companies and individuals liable, the Superior Court reviewed the relevant law under the civil misleading advertising provisions of the Competition Act, finding that the faxes were misleading, material and that fine print disclaimers used failed to cure otherwise misleading claims. The Court ordered penalties that included a ten-year prohibition order, compensation for consumers and more than $9 million in AMPs, including more than $1 million against individuals – the highest award to date in contested proceedings for a Canadian misleading advertising case.
On appeal, one individual appellant argued that he had been deprived of a fair hearing and opportunity to adduce evidence relevant to his defense, in particular evidence of a lack of involvement in the marketing practices and relevant to the Competition Act’s factors for determining the size of AMP to be imposed. The appellant also argued that the lower court hearing should have been adjourned to allow him to adequately protect himself.
In a short but interesting decision, the Court of Appeal rejected all of these arguments. With respect to evidence, the Court of Appeal found that the appellant chose not to file his own affidavit, affidavit evidence that had been filed addressed the appellant’s involvement in the misleading conduct and financial status and that it was, in any event, open to the lower court judge to decide what weight to give to the available evidence.
As to the fairness of the proceeding, the Court of Appeal found that there was no evidence that any concerns were raised about the evidence in the prior proceedings (or an adjournment requested) and that the lower court judge had no independent obligation to become involved in the presentation of the appellant’s case or evidence called. The Court of Appeal referred to these matters as the “exclusive domain of client and counsel”. The Court held that “other than in extraordinary circumstances such as when it is apparent that a conflict has arisen between a client and his or her counsel, the court should not, on its own accord, become involved in the actual presentation of the case.”
On liability, the Court of Appeal found that the lower court’s finding was “unassailable”, based on evidence the appellant knew the companies were making false and misleading representations, was aware of prior efforts to obtain compliance – for example, in the U.S. – and a 2010 Competition Bureau warning that had specifically been brought to his attention. In upholding the liability finding, the Court of Appeal also pointed to the appellant’s responsibility for complaints and key aspects of the companies’ deceptive marketing activities.
January 28, 2013
Earlier today, the CRTC published its anticipated draft Wireless Code, which will be subject to public comments until February 15, 2013 (see: Help Develop a Wireless Code). According to the CRTC, it has received 3,500 written comments and about 600 online comments, which were reviewed in preparing the new draft Code. This second phase of public comments will also include a public hearing to be held from February 11th to 15th in Gatineau.
In making the announcement CRTC Chairman Jean-Pierre Blais said:
“I would like to thank Canadians for having shared their candid views on wireless services. … The draft code is still very much a work in progress and intended to encourage more discussion. We are inviting Canadians to participate by telling us what they think of the working document. Once finalized, the wireless code will enable them to make informed decisions in a competitive marketplace.”
The draft Code has arisen as a result of growing consumer frustration with wireless contracts, terms of service, fees and disclosure, as well as a desire by industry members to have a single federal code, rather than multiple provincial regimes.
The draft Code addresses major topics including enforcement, contracts, fees (clarity of advertised prices, additional fees, etc.), repairs, unlocking devices and loss/theft. Some of the aspects of the new draft Code that caught my eye, which according to the CRTC is only “intended to stimulate debate and does not constitute a preliminary view” by the CRTC, include:
1. Conflict provisions benefiting consumers (i.e., contemplating that the new Code will co-exist with existing provincial legislation with consumers having the benefit of the most consumer-favorable provisions).
2. Cancellation rights for contracts agreed to by phone or online (allowing consumers to cancel agreements without penalties where they have not either received a copy of the contract or written terms conflict with phone/online sales terms).
3. Penalties that may include explanations/apologies for consumers, undertakings to take steps (or stop conduct) and monetary penalties of up to $5,000.
January 17, 2013
Yesterday the U.S. Department of Justice (DoJ) issued a business review letter concluding that it would not challenge a proposed “gainsharing” program by a New York State hospital association (the Greater New York Hospital Association).
The DoJ’s business review letter (the Canadian parallel being advisory opinions available for proposed conduct under section 124.1 of the Competition Act) is interesting in that it shows the importance of minimizing the exchange of competitively sensitive information in the context of association activities.
In this case, the hospital association sought assurance from the DoJ that its proposed program to have physicians take into account their use of hospital resources (and rewards based on shares of achieved savings) would lead to improvements in quality and efficiency and would not violate federal antitrust laws.
The specifics of the particular program in this case aside (the so-called “gainsharing” program involving some 100 hospitals), the aspect of the review letter I found interesting was the DoJ’s analysis of information exchanges. In this regard, the DoJ considered whether the proposed program would constitute a horizontal agreement among competing hospitals relating to physicians’ compensation or an information exchange between hospitals that would facilitate anticompetitive coordination to limit physician compensation (concluding that the proposed program would be unlikely to facilitate collusion or otherwise raise competitive concerns).
In making this determination, the DoJ considered the fact that the program would not involve the exchange of competitively sensitive information between participating hospitals (and would be limited to non-competitively sensitive cost and benchmark data) and would follow the DoJ/FTC antitrust safety-zone requirements set out in their Statements of Antitrust Enforcement Policy in Health Care (the “Health Care Policy Statements”), namely that the data would be at least three months old, supplied by at least five providers and appropriately aggregated.
In Canada, as in the U.S., the exchange of competitively sensitive information between competitors, such as price, cost, market, supplier or output information, particularly in the context of trade and professional associations, can raise competition law concerns (see e.g.: here).
Generally speaking, there are two potential issues that can arise from the exchange of this type of information without adequate precautions: first, that the exchange results in an agreement that violates the criminal conspiracy provisions of the Competition Act (or raises concerns under the civil agreements provision – section 90.1); and second, that an exchange may allow the Competition Bureau, a court or private plaintiff to infer the existence of illegal or problematic agreement among competitors.
In this regard, in his first public remarks, the Interim Commissioner of Competition specifically highlighted information sharing agreements among association members as a potential concern:
“… we are concerned with conduct that reduces incentives to compete vigorously. Information sharing agreements are an example of this. Competitively sensitive information exchanged among competitors who can have serious negative effects on competition, especially if these are in highly concentrated markets with relatively homogeneous product offerings. Clearly, Trade/Industry Associations must be extra vigilant in their efforts to manage and alleviate risk with respect to their activities.”
January 12, 2013
A recent settlement between the U.S. Department of Justice (DoJ) and an Oklahoma chiropractors association (the Oklahoma State Chiropractic Independent Physicians Association) shows the potential risk of association collective bargaining in the absence of competition law immunities/exceptions.
On January 10th, the DoJ announced that it had reached a settlement with this chiropractors association that will require the association to stop jointly determining prices and negotiating contracts with insurers on behalf of competing chiropractors in Oklahoma. According to the DoJ, the association, representing approximately 45% of the state market, and its executive director negotiated at least seven contracts between chiropractors and insurers that set prices for chiropractic services, with the effect of consumers having to paying higher fees in Oklahoma. The DoJ also took issue with collective steps by the association’s chiropractors to suspend pre-existing contracts with insurers and stop offering insurers incentives or rebates. In making the announcement, the DoJ said:
“By jointly negotiating fees on behalf of competing chiropractors, the association and its executive director increased the prices that consumers paid for chiropractic services in Oklahoma. … Today’s settlement promotes competition among Oklahoma chiropractors and prevents the association and its executive director from engaging in illegal conduct that caused consumers to pay more for their health care.”
Some of the specific allegations made by the DoJ in its civil section 1 Sherman Act complaint related to a membership requirement for association members to authorize the association to contract with 3rd party insurers, terminate existing contracts with insurers, stipulate a minimum reimbursement floor for chiropractors and agree not to pay incentives or rebates (e.g., waive deductibles or co-pays). For example, the association’s website stated: “[the association] concentrates the power of [its] state chiropractic physicians into one group. Through [the association], a chiropractor can maintain an individual practice while associating with other chiropractors to increase contract-negotiating power”. The DoJ also took the position that the defendants’ joint negotiation activities in this case were not ancillary to any pro-competitive purpose or reasonably necessary to achieve any efficiencies.
CANADIAN CASL (ANTI-SPAM LAW) PRECEDENTS
Do you need a precedent or checklist
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We offer Canadian anti-spam law (CASL) precedents and checklists to help electronic marketers comply with CASL. These include checklists and precedents for express consent requests (including on behalf of third parties), sender identification information, unsubscribe mechanisms, business related exemptions and types of implied consent and documenting consent and scrubbing distribution lists. We also offer a CASL corporate compliance program. For more information or to order, see: Anti-Spam (CASL) Precedents/Forms. If you would like to discuss CASL legal advice or for other advertising or marketing in Canada, including contests/sweepstakes, contact us: contact.
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January 9, 2013
Last Friday, Industry Canada released highly anticipated (well at least in Internet, advertising and competition law circles) new draft regulations relating to the impending new Canadian anti-spam legislation (CASL). The new draft regulations, among other things, expand on some key terms in the legislation, clarify some exceptions existing in the legislation and add several new exceptions. These include sending commercial electronic messages to enforce a legal right, an exception for some types of referrals and for electronic communications sent within a company (or between companies in an existing business relationship).
CANADIAN CASL (ANTI-SPAM LAW) PRECEDENTS
Do you need a precedent or checklist
to comply with CASL (Canadian anti-spam law)?
We offer Canadian anti-spam law (CASL) precedents and checklists to help electronic marketers comply with CASL. These include checklists and precedents for express consent requests (including on behalf of third parties), sender identification information, unsubscribe mechanisms, business related exemptions and types of implied consent and documenting consent and scrubbing distribution lists. We also offer a CASL corporate compliance program. For more information or to order, see: Anti-Spam (CASL) Precedents/Forms. If you would like to discuss CASL legal advice or for other advertising or marketing in Canada, including contests/sweepstakes, contact us: contact.
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January 4, 2013
On January 4, 2013, Industry Canada issued revised draft regulations (Electronic Commerce Protection Regulations) for Canada’s upcoming anti-spam legislation (“CASL”). The revised regulations will be subject to comment until February 4, 2013 and generally clarify certain key CASL definitions and exceptions and add some new exceptions. Some of the key aspects of the new draft regulations include:
January 4, 2013
On January 4, 2013, Ontario’s consumer protection agency (the Ministry of Consumer Services) announced that it is planning to regulate debt settlement companies and issued proposed regulatory changes for public comments. In making the announcement, Ontario’s Minister of Consumer Services said:
“There is evidence of harmful practices used by some debt settlement companies and that is why our government is taking steps to protect consumers. We want to put a stop to abusive practices in the marketplace. Consumers should know their rights before they sign contracts and they should not make any payments until they get results.”
The new regulations, which according to the Ministry are intended to protect Ontario consumers from “exaggerated claims and abusive practices”, may include regulations to: (i) prevent debt settlement companies from charging up-front fees, (ii) limiting the fees debt settlement companies can charge consumers, (iii) require clear and transparent contracts (clear disclosure of key contract terms including fees, services and conditions) and (iv) require a ten-day cooling-off period.
The new rules would apply to for-profit and not-for-profit operators offering to arrange debt settlements for consumers and would be subject to existing Ontario consumer protection laws (e.g., the Collection Agencies Act and Consumer Protection Act). The planned new rules would also apply to traditional debt management plans offered through credit counseling services.
December 5, 2012
In interesting and wide ranging comments given earlier today in Vancouver, as a prelude to published remarks, the Interim Commissioner of Competition John Pecman discussed current Bureau priorities, some key enforcement trends and gave some indication of future policy direction at the Bureau.
Perhaps appropriately, the Interim Commissioner began his remarks by noting that today, December 5th, has been designated by the Indian based NGO CUTS International as “world competition day” (with this year’s topic being designated by CUTS as the impact of cartels on the world’s poor).
Some highlights from the Interim Commissioner’s remarks included:
Enforcement. An overarching theme of today’s discussion in Vancouver was a continued focus on enforcement and an unwavering willingness by the Bureau to commence litigation (though underscored throughout the talk by a message that the Bureau continues to be interested in collaboration and dialogue). While the Interim Commissioner said that the Bureau’s default is generally to work collaboratively, the Bureau will continue not to hesitate to litigate. The Interim Commissioner also spoke about a desire to return to some of the “bread and butter” priorities of the Bureau in both the criminal and deceptive marketing areas. Interestingly, the Interim Commissioner indicated that despite recent Federal budgetary cuts, the Bureau was working toward enhancing its internal litigation capabilities.
Consultations & New Guidelines. The Interim Commissioner indicated that the Bureau would be commencing consultations with the competition bar in Canada in the new-year, as well as stakeholders, business groups and procurement groups to amplify and clarify several key areas, including the Bureau’s Immunity and Leniency Programs and electronic document production. The Interim Commissioner also indicated that the Bureau would be working towards issuing new price maintenance guidelines, FAQs for unilateral conduct and new general guidelines on Bureau enforcement. The Interim Commissioner also suggested a desire by the Bureau to move away from issuing advisory opinions in individual cases toward a focus on published materials (i.e., guidelines).
Maxzone. With respect to the recent decision by Chief Justice Crampton in the Maxzone case, the Interim Commissioner indicated that the decision both sends a strong message that serious white-collar crime conduct akin to fraud should be appropriately punished (including by increasing recommendations for prison sentences) while other aspects of the decision were less workable practically, for example Chief Justice Crampton’s suggestion that defendants should work to achieve restitution with plaintiffs prior to plea agreements (which can delay criminal investigations). In this regard, the Interim Commissioner commented on the existing partition between private actions and criminal enforcement, saying there already existed a mechanism for restitution (section 36 of the Competition Act – the provision under which private civil actions in Canada are commenced). Overall, however, Mr. Pecman described the ongoing shift of Canadian courts toward sterner sentencing and recent Criminal Code sentencing amendments eliminating conditional sentences for cartel and bid-rigging offences as a “sea change” to how competition law offences are treated in Canada.
Templates/precedents and checklists to run promotional contests in Canada
Templates/precedents and checklists to comply with Canadian anti-spam law (CASL)
