Archive for the 'Competition Bureau' Category
The Competition Bureau has published its March Report of Concluded Merger Reviews.
Launched in February amid some controversy from the competition bar (see: Competition Bureau to Issue Monthly Merger Review Reports), the Bureau’s second monthly report includes fourteen transactions in which Advance Ruling Certificates were issued in two and No Action Letters issued in the remainder.
On April 11, 2012, the Competition Bureau issued new merger interpretation guidelines for public comment: Pre-Merger Notification Interpretation Guideline Number 15: Assets in Canada and Gross Revenues From Sales in, from or into Canada (Sections 109 and 110 of the Act).
In issuing the new guidelines the Bureau said:
“Interpretation Guideline 15 provides guidance on how to calculate the aggregate value of assets in Canada and the gross revenues from sales in, from or into Canada. It also provides information on how to determine whether gross revenues from sales are generated from assets in Canada. This guidance may assist businesses in determining whether the parties-size and transaction-size thresholds under sections 109 and 110 of the Act are exceeded.”
The Bureau has currently issued merger notification interpretation guidelines relating to the definition of an “operating business” under the Competition Act, multiple-step transactions, ordinary course acquisitions and corporate spin-offs, among others.
With respect to the new guidelines issued for public consultation, the calculation of Canadian assets and revenues is related to the “size of parties” and “size of transaction” thresholds for merger notification under sections 109 and 110 of the Competition Act. Generally speaking, for a merger to be notifiable in Canada it must: (i) involve the acquisition of an “operating business” in Canada, (ii) be one of five specified types of transactions set out in the Act, (iii) exceed the prescribed thresholds under the Act and (iv) not fall within an applicable exception.
The Bureau’s new guidelines set out, among other things, the Bureau’s position regarding determining the location of tangible, intangible and financial assets and revenues, the use of segmented financial statements and the calculation of revenues for the size of transaction threshold. The Bureau’s new guidelines also include a number of illustrative examples.
On April 10, 2012, the Competition Bureau issued a statement summarizing its review of the acquisition of Quad/Graphics Canada, Inc. by Transcontinental Inc. (a printing merger involving the retail flyer market).
The Bureau’s announcement is part of its recent initiative to increase the transparency of its merger review process, which has included the launch of a new Monthly Report of Concluded Merger Reviews (launched earlier this year with some controversy from the competition bar), new Merger Enforcement Guidelines (“MEGs”) (which govern the Bureau’s substantive review of mergers in Canada), new Merger Review Process Guidelines (reflecting the Bureau’s experience with Canada’s new two-stage merger review process since it was introduced in March, 2009) and recent public remarks by the Commissioner.
With respect to merger review summaries in particular, the Commissioner announced that the Bureau would be launching summaries of some of its merger reviews in recent public remarks:
“Among other initiatives, I am pleased to announce that, following the recommendations of an internal working group on transparency, we intend to publish more position statements that describe the Bureau’s analysis of complex merger cases, and to establish a merger register — a list of all closed merger reviews, updated on a monthly basis.”
While the Bureau had previously been issuing Technical Backgrounders for completed merger reviews, the Bureau discontinued that practice in 2009.
In the Bureau’s Quad/Graphics-Transcontinental merger review statement, the Bureau states that it issued a No Action Letter (“NAL”) to Transcontinental, based on factors including increased foreign (U.S.) competition in the relevant retail flyer market.
According to the Bureau, while it concluded that there was increased concentration in Canada, “U.S. printers with printing facilities located in close proximity to the Canadian border … are imposing competitive discipline on the retail flyer market in Canada.”
The National Competition Law Section of the Canadian Bar Association is holding its 2012 Spring competition law conference in Toronto (the 2012 Competition Law Spring Forum: Best Practices in a Time of Active Enforcement) on May 2, 2012 at the Toronto Board of Trade.
From the CBA:
“Aided by the 2009/10 changes to the Competition Act, the Canadian Competition Bureau has adopted an aggressive enforcement agenda. There are more litigated cases in the Tribunal and the Courts than ever before, including the first prosecution under the new conspiracy provisions of the Act. Commissioner Melanie Aitken has made it clear that there are more to come. Our expert panelists will provide guidance on effectively protecting your clients’ interests at all stages – from preventative compliance programs to responding to criminal or civil enforcement actions. We are delighted to announce that Commissioner Melanie Aitken will be our keynote lunchtime speaker.”
This year’s Spring conference will include panels on compliance, responding to Competition Bureau investigations, misleading advertising, developments in merger review and recent competition law developments (including the TREB abuse case, the contested Air Canada / United merger, Bell Canada advertising case and recent bid-rigging cases).
On March 28, 2012, the CRTC published its final Regulations under the Anti-spam Act (see: Electronic Commerce Protection Regulations (CRTC)).
Rob Currie, a professor at the Schulich School of Law, Dalhousie, has written a rather good and interesting note on Bill C-30 (the “Lawful Access” Bill or “Protecting Children From Internet Predators Act”) and the Council of Europe’s Cybercrime Convention, which Canada is a signatory to.
He discusses Canada’s participation in the Cybercrime Convention, the fact that Canada has not yet ratified based on an absence of investigative tools that are a prerequisite to ratification and the wider objectives of the Convention.
In a curious story that caught my eye today, CTV reported that the City of Ottawa is threatening to terminate its contracts with companies found to have conspired to fix the price of gas in Ottawa and ban all future City purchases from them.
According to CTV, City of Ottawa Councilors Stephen Blais and Steve Desroches sent a letter to Canadian Tire, Mr. Gas and Pioneer in Ottawa, all of which pleaded guilty in Ontario Superior Court last week to fixing the price of gas in 2007 and were fined $2 million (see: Competition Bureau Announces $2 Million Fines in Ontario Gas Price-fixing Case).
This case is the second major gasoline price-fixing investigation that the Bureau has disclosed in the past several years (the Bureau is currently concluding the largest criminal investigation in its history in relation to gasoline price-fixing in Quebec – see: Further Individual Pleads Guilty in Quebec Gasoline Price-fixing Cartel).
On March 22, 2012, the Competition Bureau issued revised draft Abuse of Dominance Guidelines for public comment. The Bureau had previously issued updated draft Abuse Guidelines in January, 2009 (the Bureau’s Abuse of Dominance Guidelines have not been updated since 2001).
Generally speaking, under section 79 of the federal Competition Act, abuse of dominance occurs when a dominant firm (or firms) engages in a practice of anti-competitive acts that results in a prevention or substantial lessening of competition. Canada’s modern abuse of dominance provisions were added to the Act following significant amendments in 1986.
Like other major jurisdictions, in Canada it is not dominance per se that is prohibited, but rather the abuse of a dominant position (Canada does not, unlike the United States, recognize attempted monopolization).
To establish abuse of dominance, the Commissioner of Competition must establish the following elements on an application to the federal Competition Tribunal:
1. A firm (or firms) is dominant in a relevant market (dominance);
2. The firm has engaged in a practice of anti-competitive acts; and
3. The firm’s conduct has resulted in (or is or is likely to result in) a prevention or substantial lessening of competition.
Some of the highlights of the Bureau’s revised draft Abuse Guidelines, which are markedly shorter and more concise that than its previous guidelines, include:
Affirming that market power alone (or high prices) is insufficient to warrant intervention under the abuse of dominance provisions of the Act.
Confirming existing Competition Tribunal jurisprudence in relation to the elements of abuse of dominance (market power, a practice of anti-competitive acts and prevention or substantial lessening of competition). The Bureau also emphasizes that market power is a necessary prerequisite to abuse of dominance inquiries.
Taking the position that, during abuse of dominance inquiries, the Bureau will “generally afford parties the opportunity to respond to [its] concerns regarding alleged contraventions of section 79 and propose an appropriate resolution to address them.”
Indicating a general preference by the Bureau for settlements by way of registered consent agreements (consistent generally with the Bureau’s departure in recent years away from more informal resolutions, such as undertakings).
Articulating the Bureau’s general use of the hypothetical monopolist test for product and geographic market definition.
Setting out more clearly and concisely than previous guidelines the Bureau’s approach to quantitative and qualitative factors for product and geographic market definition. This is one of the most appealing refinements in the Bureau’s new draft Abuse Guidelines.
Increasing the previous “bright line” share thresholds for single firm dominance, with the Bureau now taking the position that a market share of less than 35% will generally not prompt further examination (unchanged), that a market share between 35% and 50% may be examined by the Bureau (a stricter standard for complainants than in the previous guidelines, where a market share of 35% or more would have “generally [prompted] further examination”) and that a market share of 50% or more will generally prompt further examination (increased from the previous 35%).
Templates/precedents and checklists to run promotional contests in Canada
Templates/precedents and checklists to comply with Canadian anti-spam law (CASL)
