Archive for the 'Competition Law' Category
December 28, 2012
I am pleased to be a panelist for an upcoming Canadian/U.S. advertising law webinar hosted by Strafford on January 8, 2013: Key Canadian Advertising and Competition Law Compliance Strategies.
Description
The Canadian Competition Act contains civil and criminal prohibitions on misleading representations and regulates specific types of advertising and marketing practices. Violations can lead to “administrative monetary penalties” of up to $10 million and court orders to cease conduct and compensate consumers (restitution).
The Competition Bureau has ramped up enforcement efforts. Recent Bureau and private litigation challenges include price and performance claims, use of disclaimers and the application and scope of the “general impression test”. Developments include increased sectoral regulation and federal anti-spam legislation.
To effectively minimize legal risk, marketers and advertisers in Canada need to know the basic rules that apply to price and performance claims, sales and other promotions (including contests), disclaimers, electronic marketing and the enforcement agencies’ evolving approach to new technologies.
Listen as our panel of Canadian and U.S. attorneys provide a guide to important competition compliance rules for counsel to companies and associations conducting advertising and marketing operations in Canada. Panelists will review current litigation and Competition Bureau enforcement developments and provide practical compliance guidelines to avoid triggering allegations of misleading representations.
The panel will review these and other key questions: what types of representations are currently under heavy scrutiny by the Competition Bureau?; how should marketers prepare for the federal anti-spam legislation expected in 2013?; what kinds of safeguards are needed to ensure that price, performance or comparative claims or the use of disclaimers do not violate the Competition Act?
December 27, 2012
I’ve been thinking lately about writing a short note on Competition Act remedies and how the Act can be used as a strategic tool, partly from working on a few recent files with general commercial counsel who tend to ask: “what will we get and how do we get there using competition law”?
I’ve also grown to think of the Competition Act over the past few years as a collection of tools that can be used for strategic purposes (e.g., in settlement negotiations) or in an effort to achieve certain types of remedies for clients. In other words, thinking about remedies first and the best types of competition law tools to get there.
So, with that said, the following is a short overview of Competition Act penalties and remedies (and a few of the ways the Act can be used as a strategic tool, either on its own or with other proceedings or strategies):
1. As a general matter, the Competition Act contains both civil provisions and criminal offences, and so the potential penalties/remedies vary considerably depending on the particular provision and whether a criminal offence or civil reviewable matter.
2. Competition Bureau complaints are possible under all of the provisions of the Act, by consumers or competitors (and may be filed in a number of ways).
3. Under the criminal offences of the Act (e.g., criminal conspiracy agreements, bid-rigging, deceptive telemarketing, etc.), potential penalties include fines and/or imprisonment. The Bureau also sometimes seeks so-called “prohibition orders” for conduct to stop, which is one peculiar feature and remedy available to the Bureau.
December 21, 2012
The American Bar Association today published the December edition of The Antitrust Source. This edition includes articles on:
“FTC Monetary Remedies and the Limits of Antitrust”; “Deciphering the Compliance Obligations Around the EU’s Cookie Directive”; “Maximizing Efficiencies: Getting Credit Where Credit is Due”; “An Overview of the FTC’s New and Improved Green Guides”; and a book review of The Economics of Collusion – Cartels and Bidding Rings.
December 21, 2012
The National Centre for Business Law will be hosting an upcoming seminar on Libor on January 8th entitled: “The World’s Most Important Number: How a Web of Incentives, Hierarchies and Legal Compliance Cultures Conspired to Undermine Libor”, with guest speaker Eric Talley, Rosalinde and Arthur Gilbert Professor of Law and Faculty Director, Berkeley Center for Law, Business and the Economy.
From the National Centre for Business Law:
“To many observers, the recent scandal surrounding manipulations of the London Interbank Offering Rate (LIBOR) may go down as one of the most significant and far reaching events associated with the global financial crisis. Literally hundreds of trillions of dollars’ worth of global financial contracts – ranging from mortgages to credit cards to corporate debt securities to financial derivatives – hinge critically upon LIBOR to peg the financial obligations of the parties. This essay offers some preliminary thoughts on how best to reorganize and design benchmark financial measures in the presence of self-interested and often short-sighted regulators, participating banks, and general market participants. Given these constraints, should we impose further top-down regulation on the rate-setting process at all, and if so, how? Should we instead depend on ex post liability to provide incentives, and if so, how would such a liability system work? Or, should we limit intervention to identifying more reliable market-mediated alternatives to LIBOR — ones that would be less susceptible to manipulation, but also less responsive-to-government-regulatory-policies?”
December 20, 2012
The Asian Competition Forum has posted the papers from its recent 8th Annual Asian Competition Law Conference (2012). In a rather impressive showing, contributions relating to China, Hong Kong, India, Japan, Singapore and others include papers and presentations on:
Setting Up a New Competition Regime: the Indian Experience
The Tasks and Challenges of Enforcing the Hong Kong Competition Ordinance
The Role of the Media in Building a Competition Culture
Developing a Culture of Competition
Priority Setting in Competition Law – the Australian Experience
Establishing Sound Enforcement Processes in China
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
CANADIAN CONTEST RULES/PRECEDENTS
Do you need contest rules/precedents
for a Canadian contest?
We offer many types of Canadian contest/sweepstakes law precedents and forms (i.e., Canadian contest/sweepstakes law precedents to run common types of contests in Canada). These include precedents for random draw contests (i.e., where winners are chosen by random draw), skill contests (e.g., essay, photo or other types of contests where entrants submit content that is judged to enter the contest or for additional entries), trip contests and more. Also available are individual Canadian contest/sweepstakes precedents, including short rules (“mini-rules”), long rules, winner releases and a Canadian contest law checklist. For more information or to order, see: Canadian Contest Law Forms/Precedents. If you would like to discuss legal advice in relation to your contest or other promotion, contact us: Contact.
____________________
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.
Templates/precedents and checklists to run promotional contests in Canada
Templates/precedents and checklists to comply with Canadian anti-spam law (CASL)
