Archive for the 'Competition Bureau' Category
December 20, 2012
Contested abuse of dominance (i.e., monopolization) cases used to be rather uncommon in Canada (with only a relative handful of contested cases having been commenced since the modern Competition Act was introduced in Canada in 1986). This paucity of cases appears to be changing, based on the Competition Bureau’s evident desire to increase the unilateral conduct jurisprudence in Canada.
Earlier today, and consistent with the Bureau’s recent increasing trend toward deterrence through enforcement, the Bureau announced that it had filed two new abuse of dominance applications against Ontario residential water heater suppliers Direct Energy Marketing Limited and Reliance Comfort Limited Partnership.
In making the announcement, relating to the first new abuse of dominance application since the Bureau commenced section 79 abuse proceedings against The Toronto Real Estate Board in 2011, the Bureau said:
“Following an extensive investigation, the Bureau determined that Direct Energy and Reliance each engaged in practices that intentionally suppress competition and restrict consumer choice. Specifically, each company implemented water heater return policies and procedures aimed at preventing consumers from switching to competitors. This anti-competitive conduct affects consumers, other rental water heater companies, and businesses that sell water heaters, such as home improvement centres.
Currently, when Direct Energy or Reliance customers wish to switch to another provider, they must contend with a number of practices and procedures intended to frustrate the return process for their rented water heaters, including: a requirement to call to obtain authorization to return a rented water heater; aggressive retention tactics during these calls; restrictions on when and where water heaters can be returned; and unwarranted fees and charges.”
The Bureau’s announcement comes several days after media reports that Reliance had commenced consumer protection and Competition Act proceedings against newcomer National Home Services for $60 million for allegedly deceptive marketing practices (see: $60 million lawsuit alleges unfair practices in water heater rentals).
The Bureau is seeking orders from the Competition Tribunal for Direct and Reliance to stop conduct and also pay administrative monetary penalties totaling $25 million, the first time the Bureau has sought AMPs under the abuse of dominance provisions since they became available in 2009 (and consistent with other ongoing advertising cases in which the Bureau is also seeking the maximum penalties possible). $15 million is being sought against Direct because, according to the Bureau, this is the second proceeding that has been commenced against it (Direct’s predecessor Enbridge Services Inc., which was subject to a 10-year consent order – see: here).
The maximum AMPs under the Competition Act for abuse of dominance are $10 million, which may be increased to $15 million for subsequent orders. Following recently updated Abuse of Dominance Guidelines (see: here), however, the factors for when the Bureau will seek AMPs for abuse of dominance (as well as the quantum) remains unclear. Factors that the Competition Tribunal may consider in determining AMPs include competitive effects of the conduct, revenues generated from the challenged practice, the financial position of the respondent and history of Competition Act compliance.
In the Bureau’s previous application against Enbridge (in 2002), the Bureau alleged that anti-competitive acts by Enbridge included certain “exit charges” and conditions for customers (preventing competitors from disconnecting and removing Enbridge water heaters, charging customers a fee for removal and charging an installation cost fee over a long 11 year period) and a “price match guarantee” (that the Bureau argued allowed the water heater supplier to selectively discount buy-out prices, preventing customers from switching to competing suppliers).
December 18, 2012
Earlier today, the Canadian Transportation Agency (CTA) launched a new site for the new all-inclusive air price advertising (see: All-Inclusive Air Price Advertising), in advance of new regulations that will be published in the Canada Gazette (on January 2, 2013).
This new website, and upcoming regulations, has been the result of about two years work and consultations to address consumer concerns regarding airline advertising in Canada, particularly price advertising.
The new framework and regulations also reflect a wider enforcement trend in Canada, including by the federal Competition Bureau, for more complete and up-front price advertising (as well as increased enforcement scrutiny on other key advertising areas including the general impression of advertising, disclaimers, performance claims and effective disclosure in the context of mobile devices and other new media).
According to the CTA, the new regulations are meant to achieve two broad objectives: to better allow consumers to determine total airline fares (and compare airline offerings) and promote fair competition between air carriers (creating a “level playing field for [all airline advertisers] for travel within, or originating in Canada”).
The new regulations will apply to any person that advertises air prices to the public (for travel in or originating in Canada), through interactive or non-interactive media (apparently an effort to keep the scope of communication technology neutral) and will include the following:
1. The total price, including all taxes, fees and charges.
2. A minimum level of disclosure for services offered (including points of origin/destination, whether a flight is one way or return, and any booking or travel availability periods)
3. Access to a breakdown of fees, taxes and charges and any optional services offered for additional charges.
December 17, 2012
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In an interesting article published earlier today by the Vancouver Sun, the Sun is reporting an apparent dispute between an environmental group (Pacific Wild) and B.C. gaming officials in relation to a conclusion by gaming officials that a private wolf-kill contest does not require a permit.
December 13, 2012
The Criminal Matters Committee and the Young Lawyers Committee of the Canadian Bar Association’s National Competition Law Section are presenting an upcoming conference (and teleconference) entitled “A Primer of Immunity and Leniency in Criminal Competition Practice”. This conference/teleconference is to be held on January 17, 2013 from 12:30 – 2:00 pm (Toronto time).
Overview from the CBA:
“Canada’s Competition Bureau has consistently cited effective immunity and leniency programs as the most productive means of discovering and prosecuting cartel behaviour. As these programs continue to play an increasingly vital role in the Canadian legal landscape, both new and experienced practitioners alike must stay current on the latest developments and ensure that they understand the key issues. Please join our distinguished panelists for an informative discussion from the perspectives of both the Competition Bureau and the private bar.”
December 11, 2012
The Canadian Council of Chief Executives (CCCE) and School of Public Policy (University of Calgary) hosted a half-day Canada in the Pacific Century conference on December 10th (see: Canada in the Pacific Century), as part of its series on Canada/Asia trade.
The CCCE has now uploaded slides and videos from the conference – see: webcast of “Canada in the Pacific Century”.
Conference overview:
“Asia’s rise is the single most important force transforming the global economy at the beginning of the 21st century. Rapid urbanization and the expected doubling of the world’s middle class will have far-reaching consequences, from unprecedented demand for food, energy and other resources, to a reshaping of the multilateral trading system. Countries and companies that adapt successfully to these changes can expect to prosper and grow; others will be left behind. On behalf of the Canadian Council of Chief Executives, thank you for participating in this conference series on Canada’s economic prospects in a rebalanced global economy.”
December 7, 2012
The Corporate Counsel and Unilateral Conduct/Reviewable Matters Committees of the Canadian Bar Association will be co-hosting the following upcoming teleconference on December 13th: Advising Amongst Uncertainty: Abuse of Dominance in Canada and the New Guidelines:
“Globally, enforcement of unilateral conduct laws has led to some of the most high profile matters in antitrust history, including Microsoft and Google in the US and EU. By comparison, unilateral conduct has seen much less enforcement in Canada in the last decade, which has arguably impacted the amount of attention it receives by businesses and their legal advisers. However, the Competition Bureau’s approach to enforcement appears to have changed since 2009 and has produced recent high profile cases including the Canadian Real Estate Association and Toronto Real Estate Board abuse of dominance cases. With the new Abuse of Dominance Guidelines released on September 20, 2012, both in-house counsel and private practitioners are revisiting this area with interest. But how helpful are the shortened Guidelines in providing meaningful guidance, and where else can counsel turn for information? Join us for lively discussion on the state of Abuse of Dominance in Canada, including hypothetical fact scenarios and practical insights on advising in this complex and evolving area.”
December 7, 2012
Earlier today, the Competition Bureau announced that five individuals have been charged under the Criminal Code and Competition Act for allegedly misleading and deceptive telemarketing (see: Five Individuals Facing Charges for Fraudulent and Misleading Telemarketing Calls).
In making the announcement, the Bureau said:
“In August 2006, a Bureau investigation revealed two telemarketing operations in Montréal using questionable tactics. One, using names such as ‘Advance Financial’, ‘Consumer Benefit’, and others, promoted government grants to American citizens. The other, using names including ‘Global Electronic Solutions/Solutions Électroniques Global’ and ‘Federal Emergency Medical Supply/Agence Federal des Produits Medicales (sic)’, promoted the sale of office supplies and medical kits to Canadian and American businesses. The operations were shut down following a search in December 2006. The combined revenue of the two operations is estimated to be as much as $840,000.
The Bureau’s investigation determined that some of the alleged tactics used during the telemarketing calls included implying that the caller represented a business that had an existing relationship with the victim’s company, indicating that certain products or services were required under government rules, or implying that the call was being made on behalf of a government agency.”
In Canada, the Competition Act makes it a criminal offence to engage in deceptive telemarketing and also requires certain disclosure to be made during telemarketing calls.
In particular, under the Competition Act’s deceptive telemarketing provisions, it is a criminal offence to: (i) make materially false or misleading representations; (ii) operate a contest where the delivery of a prize is conditional on prior payment or certain disclosure is not made (regarding the number and value of prizes, area or areas to which they relate and odds of winning); (iii) offer free or below cost products, as consideration for supplying another product, unless disclosure is made of the fair market value of the first product (and any restrictions, terms or conditions relating to its supply); or (iv) offer products for sale grossly in excess of their fair market value where their delivery is conditional on prior payment by buyers.
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)
