Archive for the 'Compliance' Category
November 13, 2012
Earlier today, the CRTC announced that it has launched its online discussion for consultations for the new consumer wireless code of conduct. In making the announcement, the CRTC’s Chairman Jean-Pierre Blais said:
“’We encourage Canadians to join the online discussion and have their say on how wireless contracts could be clearer and easier to understand. … By sharing their views, Canadians can help us shape a clear list of terms and conditions that wireless companies will need to include in their contracts.’ The CRTC recently examined the wireless market and found that contracts were a source of significant concern for many Canadians. Once completed, the code will help Canadians better understand their rights and their wireless company’s responsibilities, and allow them to make informed decisions in a competitive marketplace.”
The CRTC’s new online discussion, which will be open until December 4th, will allow Canadians to give their views on what they think should be in the new mandatory wireless code, how wireless related complaints should be resolved and promotion and enforcement of the code.
The CRTC first announced that it was launching new public consultations for a mandatory wireless code of conduct on October 11th (see: here and here) to formulate guidelines for wireless contracts and reduce potential misleading advertising related issues.
In its initial announcement in early October, the CRTC set out the following general elements it is considering addressing in the new wireless code: clarity of contract terms and conditions; changes to contract terms and conditions; contract cancellation, expiration and renewal; clarity of advertised prices; application of the code to bundles of telecommunications services; notification of additional fees; privacy policies; hardware warranties and related issues; loss or theft of hardware; security deposits; and disconnections.
This online discussion will be followed by another in early 2013 (from January 28 to February 1, 2013).
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November 13, 2012
Given the ongoing testimony at the Charbonneau Commission in Montreal, which has included allegations of bid-rigging among Quebec construction firms, I thought I would post a short overview of bid-rigging under the Competition Act – a sort of “bid-rigging 101” list of FAQs. While much of this will likely be intuitive to most, Canadian bid-rigging law has a number of interesting aspects (and, like criminal cartels, can be very difficult for tendering authorities to detect).
What is bid rigging?
Unlike some jurisdictions, notably the U.S., Canada has a standalone bid-rigging offence, or to be more accurate related offences. Under section 47 of the federal Competition Act it is a criminal offence to:
1. Agree to not submit a bid or tender;
2. Agree to withdraw a bid or tender already made (an offence recently added to the Competition Act as a result of amendments in 2009); or
3. Submit a bid or tender arrived at by agreement.
In essence, the Competition Act prohibits most types of agreements or arrangements between competing bidders or tenderers (though there is one key exception).
Is it necessary to prove
anti-competitive effects on a market?
No. In Canada bid-rigging is referred to as a ”per se” offence, in that no anti-competitive effects need to be proven to make out an offence – in other words, the offence lies in the agreement to not submit a bid, withdraw a bid already made or submit bids arrived at by agreement.
Like the other criminal offences in the Competition Act, however, and criminal offences generally in Canada, it is necessary to prove all elements under section 47 on the criminal burden of proof (i.e., beyond a reasonable doubt).
What are some common types of bid-rigging
(i.e., ways parties attempt to avoid detection)?
Like criminal cartel (i.e., conspiracy) agreements, bid-rigging agreements are often structured in a handful of key ways to avoid detection. These include:
1. “Cover”, “courtesy” or “complementary” bidding: Some firms submit bids that are too high to be accepted (or with terms that are unacceptable to the tendering authority) to protect an agreed upon low bidder.
2. Bid suppression: One or more bidders that would otherwise bid or tender agree to refrain from bidding (or withdraw a previously made bid).
3. Bid rotation: All parties submit bids but take turns being the low bidder according to a systematic or rotating basis.
4. Market division: Suppliers agree not to compete in designated geographic areas or for specified customers.
5. Subcontracting: Parties that agree not to submit a bid (or submit a losing bid) are awarded subcontracts or supply agreements from the successful low bidder.
The above types of bid-rigging arrangements are typically intended to achieve several goals, including keeping the bid-rigging arrangement secret and dividing contracts/markets among the parties.
What must be proven to establish
an illegal bid-rigging agreement?
To establish an illegal bid-rigging agreement under section 47 of the Competition Act, all of the following elements must be established:
1. An agreement or arrangement between two or more persons (or bidders or tenderers as the case may be).
Like section 45 of the Competition Act (criminal conspiracy agreements), an agreement is an essential element to establish a bid-rigging offence under section 47. Also like the criminal conspiracy provisions, Canadian courts have held this element to require a “consensus of minds” or “mutual understanding” between the parties.
Mere consultations between parties bidding in relation to pricing, where there has been no agreement or arrangement between the parties and their respective bids are not communicated to the other before tenders are submitted, has been held not to contravene section 47.
November 8, 2012
Guest post by Christine Duhaime (Duhaime Law)
Defamation by Tweet?
In one of BC’s first ever Twitter defamation actions, RCMP officer James Brown, has filed a civil claim against a Vancouver lawyer and three other defendants over, among other things, sexual, or sexually-related content disseminated over the Internet, including on Twitter.
And I think he’s likely to win his case if he can prove that the statements were published and the defendants were the authors of those statements.
Alleged Defamatory Statements
Brown filed a Notice of Civil Claim in the Supreme Court of British Columbia is which he alleges that (note that these are just allegations as against the defendants and also that the statements allegedly published by the defendants are also just allegations as against Brown):
A defendant named Grant Wakefield created false profiles on a website called Fetlife (as in fetish life) to obtain sexual photographs and postings uploaded by Brown on Fetlife;
Wakefield and two other John Doe defendants (the “John Does”) provided Brown’s Fetlife material to the media;
Wakefield and the John Does provided other images to the media depicting sexual attacks on women that they alleged were images of Brown;
The Vancouver Sun and other media outlets published the Fetlife and the other material that was allegedly provided by Wakefield and the John Does, although many later issued retractions in respect thereof;
During a period of three days, Wakefield and the John Does wrote several Tweets using pseudonyms to the effect, inter alia, that Brown: (a) was silencing victims; (b) attended the illegal bar operated by convicted killer Robert Pickton; (c) was connected to convicted killer Robert Pickton; (d) was corrupt; (e) was charged with three cases of sexual assault; and (f) received tax funding to silence witnesses and victims;
In an email to a magazine, Wakefield and the John Does stated that Brown had sexually assaulted young women and was friends with convicted killer Robert Pickton;
In the month of August 2012, Wakefield and the John Does posted allegations similar to those above on several blogs;
In July 2012, another defendant, a Vancouver lawyer named Cameron Ward posted comments on his law firm website in which he stated that in its header that Brown: (a) is a sexual sadist; and in the content of the post, that Brown: (b) is a sexual deviant; and (c) was connected to Pickton; and
In August and October 2012, Ward posted additional comments on his law firm website about Brown which were defamatory, including copies of emails sent to counsel for the Missing Women Commission of Inquiry regarding Brown.
Brown is seeking an injunction to stop the defendants and everyone else from continuing to write, print or publish any libelous material concerning him and he is seeking general, special, aggravated and punitive damages against the defendants.
Defamation in Canada
Why might Brown win his defamation claim? If he can tie the statements to one or more of the defendants, he may succeed in his claim because in Canada, in order to establish a claim in defamation, Brown only has to prove three things, namely that the words: (i) were defamatory (they would tend to lower Brown’s reputation in the eyes of a reasonable person – this means the judge who assumes he/she is reasonable); (ii) referred to Brown; and (iii) were published or communicated to at least one person other than Brown.
According to the Notice of Civil Claim, the offending content about Brown is still available on the Internet and some refer specifically to him. If that is true, he has already established two of the elements of the tort. His lawyers just need to prove that the words would lower Brown’s reputation in the eyes of a reasonable person. If the allegations in the Notice of Civil Claim are accurate, that would seem easy enough. Some of the statements are clearly repugnant, including allegations that Brown sexually assaulted a young woman (e.g., is a criminal), and was connected to and friends with convicted serial killer Robert Pickton.
In an interesting Canadian Bar Association (Competition Law Section) teleseminar earlier today (November 6th), the Competition Bureau’s Acting Senior Deputy Commissioner of Competition, Criminal Matters Branch, discussed the enforcement of cartels in small jurisdictions from a Canadian perspective.
The teleseminar, which included enforcement agency panelists from Canada (Matthew Boswell, Competition Bureau), Ireland (Patrick Kenny, Irish Competition Authority), New Zealand (Mary-Ann Borrowdale, New Zealand Commerce Commission) and Israel (Gadi Perl, Israel Antitrust Authority), focused on three aspects of “Cartel Enforcement in Smaller Jurisdictions”: the preparation of effective cartel laws; practical cartel enforcement issues; and enforcement results. In sum, the spectrum from the preparation of cartel rules to carrying them out.
The Senior Deputy Commissioner’s remarks focused on the Bureau’s Immunity and Leniency Programs and recent enforcement results. Interestingly, the Deputy Commissioner also discussed Bureau efforts to detect domestic (i.e., Canadian) cartels, a renewed focus on associations and the Bureau’s participation in the ongoing Quebec corruption/competition probe, which resulted in the resignation of Montreal’s Mayor last night and involved searches of four Laval engineering-consulting firms this morning.
Continued Reliance on Immunity and Leniency Programs
With respect to the Bureau’s Immunity and Leniency Programs, the Senior Deputy Commissioner summarized some of their key elements, confirmed that they continue to be the Bureau’s most important cartel detection tools (calling them “extremely important to the successful detection” of cartels in Canada), reminding applicants that the threshold to obtain markers was extremely low (to encourage participants to come forward at their “earliest opportunity”), while emphasizing that the Bureau continues to expect strict compliance with the timelines in both programs.
With respect to the latter point, the Senior Deputy Commissioner made it clear that while the Bureau is willing to grant extensions to perfect markers beyond its 30-day guideline, extensions are not granted lightly and the Bureau looks for applicants to justify delays – for example, with reference to internal company investigations, a concrete work-plan to provide information and status updates on the progress of cooperation with other jurisdictions.
The Senior Deputy Commissioner also confirmed the Bureau’s continued expectation for Immunity and Leniency applicants to provide waivers for the Bureau to communicate and cooperate with foreign agencies (although backstopped his waiver comments by noting that the Bureau rarely exchanged documents and understood immunity/leniency applicants’ interest in maintaining a paperless process generally, including through the proffer process).
He also discussed the importance of predictability and transparency for the Bureau’s Immunity and Leniency Programs to operate effectively, noting the fact that the requirements for both Programs are set out in detail on the Bureau’s website (and in its Immunity and Leniency Bulletins), including key requirements, director and officer rights and guidelines for fine calculations.
Interestingly, however, the Senior Deputy Commissioner did not raise the recent Federal Court decision in the Maxzone case, which has created uncertainty of whether the Federal Court will accept mathematically derived joint sentencing submissions (see e.g.: here) particularly around the Bureau’s 20% of affected Canadian volume of commerce figure historically used as a starting point for fine negotiations.
Enforcement Priorities & Recent Developments
With respect to enforcement, which was in some ways the more interesting aspect of the Deputy Commissioner’s remarks earlier today, he discussed the Bureau’s practical need to divide its enforcement resources between international and domestic cartel cases, saying at one point that the Bureau could, if it wished, “completely fill its [cartel enforcement] dance card with international cases”. He did, however, emphasize the Bureau’s continued interest in detecting and commencing enforcement in relation to domestic (i.e., Canadian) cartels.
In this regard, the Deputy Commissioner indicated that while the Bureau’s Immunity and Leniency Programs had been very successful in attracting cross-border cartel immunity/leniency applicants, they had been less so for domestic cartels (saying that they had had “moderate success” in Canada to date).
As such, in order to find new ways to detect Canadian cartels, he discussed a four-pronged enforcement approach currently being utilized by the Bureau involving: (i) developing relationships with Canadian public procurement authorities, (ii) partnerships with Canadian law enforcement agencies, (iii) outreach efforts to Canadian companies and other organizations (e.g., trade and professional associations), and (iv) media and public awareness efforts (e.g., Bureau news releases, education, speeches, etc.).
Late last month, the Federal Privacy Commissioner and Alberta and British Columbia Information and Privacy Commissioners issued new privacy guidelines for mobile app developers to assist them in complying with Canadian privacy laws. In making the announcement, the Federal Privacy Commissioner’s office said:
“The mobile era has led to the placing of an increasing amount of personal data such as contacts, photos, emails and texts onto one device, which can be tracked in real time. As a result, mobile apps may not just provide users with unparalleled information and fun at their fingertips, but also hold the potential for comprehensive individual surveillance. A recent study showed that privacy concerns are swaying consumer choices. In September, the Pew Research Center released a report finding 57 per cent of users surveyed had either dropped or avoided installing an app over concerns about use of their personal information.”
The new privacy guidelines for app developers are generally structured around the following five core principles: accountability, transparency, collection, meaningful consent in the context of small screens and user notices and timing of consent.
Best Practices Checklist
More specifically, the guidelines provide a detailed discussion of the types of potential privacy issues that the Federal and Provincial privacy authorities see in relation to the rapidly developing mobile app industry and the following best practices checklist (a sort of do’s and don’ts privacy compliance list for app developers):
You are accountable for your conduct and your code
Your company, which may just be you, is responsible for all personal information collected, used and disclosed by your mobile app.
Make sure to have controls in place, such as contracts or user agreements, to ensure that third parties accessing personal information through your app are respecting their privacy obligations.
Map out where the information is going and identify potential privacy risks.
In an interesting announcement made earlier today, Canada’s Federal Privacy Commissioner Jennifer Stoddart issued new privacy guidance for videogames. In making the announcement, the Privacy Commmissioner said:
“Today, while they may be playing in the basement, they’re very likely doing so with others, whether they’re friends from around the block or virtual ones around the world. ‘As gaming consoles are now onramps to the Internet, we need to recognize that, like anything else that brings together personal information and connectivity, there are privacy issues at play … Interactive gaming accounts are increasingly becoming linked to social networks while videogames today are also avenues for advertisers to youth.’”
The Federal Privacy Commissioner’s new videogame play guidance includes information on the collection of personal information from gamers, providing credit card information, privacy controls, linked profiles over online networks and protecting personal information and profiles online.
The Privacy Commissioner also provides the following guidelines for online videogame play:
– Given that personal information is part of many gaming profiles, it is best to use strong passwords (e.g., capital and small letters, numbers and symbols);
– As most user accounts require credit card information, players should check their statements regularly and contact the gaming company or console service immediately for transaction issues;
– When consoles or individual games offer detailed privacy controls, users should examine them closely and choose wisely (e.g., users may opt to restrict profile visibility only to players who they actually know in real life);
In a speech earlier today, the new Interim Commissioner of Competition, John Pecman, in his first published remarks as Commissioner, discussed compliance, current Bureau enforcement policies and ongoing cases.
Some of the noteworthy aspects of the Interim Commissioner’s remarks include highlighting the Bureau’s continued enforcement in key areas (notably criminal cartel enforcement, including its Immunity and Leniency Programs, and abuse of dominance), highlighting the recent signals in the Maxzone case that the Federal Court will take a stricter approach to sentencing in cartel matters, and in particular compliance programs urging Canadian companies to adopt compliance programs (and discussing the risk of non-compliance and reputational benefits of adopting a credible program).
Compliance
Given that this speech was Mr. Pecman’s first official one as Interim Commissioner, and delivered at a national law firm seminar for firm clients, it is perhaps not surprising that his remarks focused on compliance:
“… the Bureau promotes compliance through enforcement and it provides the education and the tools that assist the corporate community in developing corporate compliance programs. We all know businesses and individuals have a duty to act lawfully — and, the Bureau expects that businesses and their senior management, on the whole, want to comply with the law. It is our hope that by now, it is clear that the legal, economic and reputational risks of non-compliance far outweigh any perceived advantages. Non-compliance costs businesses dearly – not just in terms of financial and legal penalties, but through negative publicity, loss of business opportunities and lost management time. While I suspect that you recognize the value of a compliance program and that many of you have clearly established compliance policies that identify and address questionable behaviour — and aim to prevent it from occurring in the first place, let me take a few minutes to expand on the benefits of such a program.”
The Commissioner reiterated the five elements that are in the Bureau’s view necessary for an effective compliance program: senior management involvement and support; compliance policies and procedures; training and education; monitoring, auditing and reporting mechanisms; and consistent disciplinary procedures and incentives.
Some of the specific compliance themes the Commissioner discussed included compliance programs that are not followed, the importance of senior management promotion of compliance policies and monitoring and internal power to enforce policies. The Commissioner was particularly critical of compliance programs that were well prepared but not followed or effectively delivered. In this regard, the Interim Commissioner said that “the issue is not [a compliance program’s] content, or [its] quality – the issue is internal enforcement …”
Trade Association Compliance
Interestingly, the Interim Commissioner also made a number of specific remarks relating to trade associations. These included highlighting the particular potential risks of associations (saying that associations face “unique compliance issues” and are “naturally exposed to greater risks of anti-competitive behavior”) and emphasizing the importance for associations to have effective compliance programs.
The Interim Commissioner also said that the Bureau would be likely to show an interest in trade association conduct where they engaged in three categories of conduct: (i) restricting the types of professional service practice offerings (e.g., setting limits on things like office location or size); (ii) limiting the number or range of members’ ability to compete (e.g., through mandatory or suggested fee schedules or product standards); or (iii) conduct that reduces incentives to compete vigorously (e.g., information sharing agreements and the exchange of competitively sensitive information).
The Criminal Matters Committee of the Canadian Bar Association’s Competition Law Section will be offering a webinar on cartel enforcement in smaller jurisdictions with the ABA’s Section of International Law on November 6, 2012. From the CBA:
“Cartel enforcement in smaller economies can involve unique issues, including as a result of relatively thin markets that accommodate fewer players of appreciable scale and the existence of industrial policies and business cultures that may clash with competition law principles. In addition, leniency-driven cartel enforcement in relation to alleged international cartel conduct can raise challenging issues for competition agencies and investigated parties alike, especially outside the United States and European Union, where leniency applicants (and investigated parties) are incentivised to concentrate their efforts.
Register for this teleseminar to hear how enforcement officials in Canada, Ireland, New Zealand and Israel are tackling a variety of issues in cartel enforcement, including: drafting anti-cartel laws that clearly distinguish between unlawful cartels and beneficial, efficiency-enhancing, competitor collaborations; working with corporations and government to promote a culture of compliance; drafting and administering effective leniency programs that account for and mitigate parties’ natural pre-occupation with ‘primary’ competition jurisdictions; leveraging international networks and cooperation with other competition agencies; accessing evidence and witnesses in foreign countries; establishing jurisdiction over alleged cartel conduct originating abroad; avoiding resource fatigue from foreign leniency applications and maintaining a credible enforcement program targeting domestic cartels; building a strong enforcement culture and obtaining precedent-setting sanctions in the face of penalties and class action suits for the same conduct in other jurisdictions.”
Templates/precedents and checklists to run promotional contests in Canada
Templates/precedents and checklists to comply with Canadian anti-spam law (CASL)
