Archive for the 'News' Category
February 27, 2013
This new global text on unfair competition caught my eye on my sweep of the web today: International Handbook on Unfair Competition, which includes chapters on major jurisdictions including Canada, the U.S., Australia, U.K., Brazil, China and a number of others. Abstract:
“Written by a worldwide team of experts, this new work surveys and comments on the unfair competition laws of the world’s leading economic powers. Following a standard pattern, each chapter introduces the reader to the latest developments in each jurisdiction, highlighting the ways in which the basic legislation and case law relates to enforcement issues, and how unfair competition laws fit with wider considerations of consumer protection and within prevailing intellectual property and competition law frameworks.
Each of the country reports follows the same standard structure: Background and General Approach to Unfair Competition Law; Legal Basis of Unfair Competition Law and Relations to Neighbouring Areas of Law; General Considerations; General Clause Against Unfair Competition; Marketing; Protection of Competitors Against Unfair Trade Practices; Specific Protection of Consumers Against Unfair Trade Practices; Enforcement.”
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.
February 14, 2013
In an interesting recent announcement made by the Federal Department of Justice, the DoJ announced that the Quebec Court of Appeal upheld the constitutionality of section 742.1 of the Criminal Code, which restricts the availability of conditional sentences (sometimes referred to as “house arrest”) for some serious personal injury offences.
The announcement, and Quebec appellate court decision, is also interesting in the regulatory law context because following legislative changes in 2012, the availability of conditional sentences (i.e., time served in the community) was further limited by amendments that came into force in November, 2012 to restrict such sentences from being imposed for some Competition Act offences, including conspiracy (under section 45 of the Act) and bid-rigging (under section 47 of the Act) (see: here and here).
Both of these Competition Act criminal offences carry potential maximum penalties that include 14 years imprisonment (the recent amendments restricting the availability of conditional sentences to, among other things, any offence for which the law prescribes a maximum penalty of 14 years or life imprisonment).
February 11, 2013
Earlier today, the Competition Bureau announced that the Federal Court of Appeal has dismissal the appeal from the Competition Tribunal’s decision in the CCS B.C. hazardous waste landfill merger case (see: here). In making the announcement, Canada’s Interim Commissioner of Competition John Pecman said:
“We are pleased that the Court has dismissed Tervita’s appeal with costs and upheld the Tribunal’s order. … If the acquisition had been allowed, Tervita would have been in a position to entrench its monopoly on secure hazardous waste disposal in Northeastern British Columbia.”
The Bureau initially filed an application with the Tribunal in 2011 to challenge this non-notifiable merger, arguing that the transaction, if it proceeded, would result in a substantial prevention of competition in the market for the disposal of hazardous waste in Northern British Columbia (the case was a “prevent” merger case).
The Competition Tribunal’s Decision
In May, 2012, the Tribunal ordered CCS to divest the Babkirk hazardous waste landfill assets acquired by CCS Corporation (now Tervita) from Complete Environmental. For a summary of the Tribunal’s decision last year see: Competition Tribunal Releases Decision in BC Landfill “Prevent” Merger Case.
In brief, on May 29, 2012, the Tribunal concluded that the acquisition by CCS of the shares of Complete substantially prevented competition and ordered CCS to divest Complete’s wholly-owned subsidiary Babkirk. The divestiture order was stayed pending appeal to the Federal Court of Appeal, which was heard last December. Tervita is the owner of the only operating secure landfills in North-Eastern British Columbia permitted to accept solid hazardous waste. These landfills primarily service oil and gas industry operators seeking to dispose of materials generated through drilling activities. Babkirk had secured regulatory approvals for development of a further secure hazardous waste landfill.
February 11, 2013
Thank you very much to Concurrences for short-listing one of my articles on Canadian bid-rigging for their upcoming 2013 Antitrust Writing Awards: Competition Bureau Jointly Lays 77 Charges Against 11 Individuals and 9 Companies in Quebec Bid-rigging Case – Tough Stance on Criminal Enforcement Continues. Concurrences short-lists articles in Academic and Business categories with voting and awards in April. From Concurrences:
“The Antitrust Writing Awards’ goal is to promote antitrust scholarship and competition advocacy by recognizing and awarding the best articles published in the antitrust law and law & economics fields in the last 12 months. The Awards feature two different categories of articles: Academic and Business. The Academic Articles category comprises articles published in academic journals, whereas the Business Articles category features articles published in professional magazines or newsletters. The articles are selected by a jury and by readers. The jury consists of a Board, an Academic and a Business Steering Committees composed of the leading academics and counsels. Readers contribute to the selection process by voting for articles. Click here to see the Jury. To ensure transparency, but also impartiality and expertise in the processing of the Awards, publications are assessed following an international peer-reviewed evaluation process. Members of the Board and of the Steering Committees are chosen from world-renowned antitrust enforcers, counsels and academics who are committed to judging the Awards fairly. The Institute of Competition Law – the publisher of the Journal Concurrences and the e-Competitions Bulletin – and George Washington University Law School Competition Law Center, are organizing these first of their kind Antitrust Writing Awards with the support of partners.”
For more information, copies of the articles, selection process or vote see: here and here.
February 10, 2013
On February 6, 2013, the Competition Bureau released its submission responding to the CRTC’s Wireless Code Working Document issued on January 28th. In its submission, the Bureau takes issue with two main aspects of the CRTC’s proposed approach to a new wireless code: potential switching costs for consumers (including plan lengths) and advocating for effective disclosure of key terms, particularly price and service limitations.
Consistent with recent enforcement, notably in the abuse of dominance area including in connection with its challenges against the Toronto Real Estate Board and Ontario hot water heater suppliers, the Bureau raises several potential switching cost concerns relating to long-term contracts, handset locking and excessive termination fees. Some of the potential adverse effects that, in the Bureau’s view, may flow from these wireless contract and handset features include reducing the incentive for incumbent carriers to innovate, raising rivals’ costs and acting as a barrier for new wireless entry.
Not surprisingly, and consistent with many Canadians, the Bureau takes particular issue with the fact that the contemplated code does not include any limit on the duration of wireless agreements. With respect to handset locking, the Bureau takes the position that device locking should be prohibited and that service providers should be required to unlock any previously locked devices free of charge. The Bureau also advocates for the uncoupling of current device subsidy contracts (i.e., for the financing of mobile devices over the life of a plan) from wireless service contracts generally, allowing consumers to continue with device financing agreements after switching to alternate providers.
February 8, 2013
It seems rather de rigueur at the moment for the Interim Commissioner of Competition to make the rounds of the big firms – in the latest stop on Mr. Pecman’s policy dance card, he stopped in Toronto yesterday to discuss in a bit more detail the Bureau’s current policies, enforcement focus and a few ongoing cases (see: Remarks by John Pecman). For other recent remarks by Mr. Pecman since he assumed the Interim Commissioner position last fall, see: here, here and here.
In this, the Interim Commissioner’s fourth speech since taking the post last fall, a few interesting points to note include a confirmation that the Bureau is interested in “incrementally increasing” its competition advocacy efforts (in addition to enforcement) in some key industries including the digital economy and retail and health sectors, re-stating the Bureau’s recent announcement that it would now use compulsory section 11 court orders in formal inquiries in all but exceptional cases (not voluntary information requests) and describing a loss in a Quebec court in one of its ongoing bid-rigging cases.
The Interim Commissioner also set out the following four factors the Bureau would consider in deciding whether to initiate regulatory interventions in particular sectors: (i) whether a forum exists and there is a high level of public interest, (ii) whether the Bureau would be contributing in a useful way (e.g., bringing forward unique arguments), (iii) being able to gauge the impact of advocacy efforts, and (iv) clear, tangible benefits for Canadians.
On the advertising and marketing law front, the Interim Commissioner also discussed the Ontario Court of Appeal decision upholding the lower court’s penalty finding in the recent Yellow Page Marketing case and the Bureau’s response filed in the CRTC’s wireless code consultations for mobile wireless providers.
All in all, while the Interim Commissioner reiterated previously announced policies, he also provided a bit more detail on the Bureau’s anticipated increase in advocacy / regulatory intervention efforts and further confirmed its continued focus on enforcement and key priorities, including the digital economy and mobile.
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January 30, 2013
Given that I do a lot of work in the area of competition/antitrust law and trade and professional associations, this upcoming webinar being hosted by Strafford entitled Antitrust Pitfalls for Trade Associations and Members caught my eye.
While there are differences between the application of competition law to associations in Canada under the Competition Act and in the U.S. under the Sherman Act and state laws, many of the principles are the same. From Strafford:
“This CLE webinar will prepare counsel to and members of trade associations to minimize the risks of antitrust liability. The panel will explain recent guidance from the FTC and other federal agencies and outline clear antitrust compliance measures for associations and their members.
Successful antitrust suits can be catastrophic for businesses. Defendants may be liable for millions of dollars in civil forfeitures, triple damages to individual plaintiffs, enormous attorneys’ fees, and even criminal sanctions.
In trade associations, competitors communicate and collaborate. However, associations and members must avoid even the appearance of anticompetitive intent in all activities to ensure they don’t violate antitrust laws and regulations.
Recent cases offer critical guidance on antitrust compliance for trade associations and their members. Trade associations must have clear compliance programs to prevent conduct that would facilitate competitors coordinating on pricing or competition.
Listen as our panel of experienced antitrust practitioners examines the antitrust pitfalls for trade associations and their members, discusses lessons from recent anticompetitive conduct enforcement actions, and offers guidance for minimizing the risk of antitrust violation.”
Templates/precedents and checklists to run promotional contests in Canada
Templates/precedents and checklists to comply with Canadian anti-spam law (CASL)
