Archive for the 'Competition Law' Category
The Victoria Real Estate Board will be holding a competition law course for its members – “Competition Law and REALTORS®: What You Say and Do Matters” – on Monday March 19th.
About this course:
“Competition Law and REALTORS®: What You Say and Do Matters was designed by ACRE with the assistance of CREA to help Canadian REALTORS® understand and comply with Canadian competition law. While Canadian competition law applies to all real estate professionals, this course was designed specifically for REALTORS®. This course provides an overview in plain language of Canadian competition law and practical compliance guidelines to assist REALTORS® in complying with Canadian competition law and a number of illustrative case studies. This national competition law course is available to members of Canadian real estate boards and associations.”
This course will be instructed by Steve Szentesi.
On increasing speculation about potential bidders for Viterra, the company issued a short press release earlier today. In its release, Viterra said:
“Viterra Inc. … at the request of Market Surveillance on behalf of the Toronto Stock Exchange, acknowledges that, in response to expressions of interest from third parties to acquire the Company, a process has been established by the Board of Directors of Viterra, which includes confidentiality agreements being entered into and the provision of due diligence.
Viterra is aware of press reports speculating about, among other things, the process, parties involved and third parties expressions of interest of at least Cdn$16 per Viterra common share. Viterra cautions investors not to rely on these press reports as there can be no assurance that a transaction will occur and that if one does occur, there can be no assurance at what price it will be completed.
Viterra has engaged financial and legal advisors to provide support with this process.
A further announcement will be made if appropriate.”
Given the recent announcements that the LIBOR price-fixing investigation had expanded to Canada (see: Cartel Update: Competition Bureau Investigates Alleged Interbank Lending Rate Coordination), I thought that I would post some information about this rather interesting recent paper by Rosa M. Abrantes-Metz and Albert D. Metz discussing the use of screens in distinguishing explicit from tacit collusion in price-fixing cases. (“Screens” are statistical tests designed to identify whether collusion or manipulation exists in a market and which companies/individuals may be involved.)
This paper has been published by our friends at Competition Policy International (CPI) in their March edition of CPI Antitrust Chronicle (see: Competition Policy International).
Jeff Gray and Tara Perkins at the Globe have written an interesting note on criticism of the Competition Bureau’s recently launched merger registry (see: Competition Bureau’s Mergers List Panned).
For the first transactions disclosed by the Bureau in its new merger registry see: Monthly Report of Concluded Merger Reviews. For more about Canadian merger control see: Merger Control. For the Canadian Bar Association’s comments on the proposed registry last fall see: Proposed Merger Registry.
The International Antitrust Law Committee of the ABA has published their March 2012 “Hot Topics” Newsletter entitled “Updates to the Canadian Merger Review Process” (see: Updates to the Canadian Merger Review Process).
Abstract:
“On January 11, 2012, the Canadian Competition Bureau published a revision of its Merger Review Process Guidelines. The revised Guidelines set out the Bureau’s approach to the merger review process under the Competition Act, which was most recently articulated in 2009 following the significant changes to the merger notification provisions which conform more closely to the ‘second request’ system employed in the United States.
The revised Guidelines represent refinements rather than wholesale changes to the process articulated in 2009, and are principally concerned with the procedures to be followed when responding to a Supplementary Information Request (‘SIR’)”
Bloomberg, the Wall Street Journal, the Globe and Mail and others are reporting that Glencore International Plc has made a £3.5 billion ($5.5 billion) bid for Viterra Inc., Canada’s largest grain handler (see e.g.: Glencore in $5.49 Billion Bid for Viterra Telegraph Says).
In reporting this story, Bloomberg said:
“Buying Viterra would give Glencore the largest share of the Canadian grain-handling market just as the Canadian Wheat Board’s monopoly over wheat and barley grown in the west of the country comes to an end. Viterra’s share of Canadian grain- handling may rise to almost 50 percent in the next few years from 45 percent, its Chief Executive Officer Mayo Schmidt said in an interview on March 8.
Viterra said in January it expects to increase grain volumes and earnings after the board’s control of supplies ends. The Canadian government passed a law in December that will end the monopoly and give farmers the choice to sell to other buyers as of Aug. 1.
A deal with Glencore might also help the company’s agricultural business to return to profit after a “difficult year” said Fairfax’s Meyer. Moving into storage of wheat and other logistics beyond just trading grains would likely help boost their margins, he said.
Glencore said Feb. 7 that 2011 adjusted earnings before interest and tax from its agricultural trading unit swung to an $8 million loss from a $659 million profit a year earlier after experiencing an ‘unprecedented cotton market.’”
For more media reports see: WSJ – Glencore, Cargill Looking at Viterra, The Australian – Cargill joins Glencore in circling Viterra, sale process expected, Globe and Mail – Glencore reportedly Viterra suitor
On March 6, 2012, a Scheduling Order was issued in Commissioner of Competition v. Air Canada/United, one of two current contested merger cases before the Competition Tribunal.
Hearings are scheduled to begin November 13, 2012.
A few days ago, we posted a short note on the Competition Bureau’s announcement that five companies and three individuals were found by the Ontario Superior Court of Justice to have violated the Competition Act in relation to a deceptive marketing operation (see: Advertising Update: $9 Million Penalty and Restitution Obtained in Deceptive Marketing Scheme).
We thought we would post a few more observations about this rather significant case following the issuance of the decision by the Ontario Superior Court.
Facts
The Competition Bureau sought orders for restitution and administrative monetary penalties or “AMPs” (essentially civil fines) in relation to alleged deceptive marketing by a group of related companies that included Yellow Page Marketing B.V., Yellow Publishing Ltd., Yellow Data Services Ltd., Yellow Business Marketing Ltd. and several individual defendants (none related to the Yellow Pages Group (“YPG”), well known and reputable in Canada).
The Bureau alleged that this group of companies misled thousands of Canadian businesses, individuals and organizations to pay more than $2,000 each for “agreed upon” services on the assumption that the target companies were merely updating existing records to obtain free Google advertising. In fact, fine print disclaimers disclosed that the targets were actually signing new two-year contracts.
While unrelated to the YPG, the defendants registered 13 Internet domains for websites that included highly similar trade-marks, colours and designs used by the YPG. The defendants also sent faxes to businesses, individuals and organizations that, according to the Court, were “designed to mislead existing or potential YPG customers” into paying $2,856 to them and which included designs that highly resembled the YPG “Walking Fingers” logo.
Companies responding to the faxes received invoices, which, if not paid, were followed by more invoices, reminder notices or letters.
Law
The Court considered the facts of this case under section 74.01 of the Competition Act (the general civil misleading advertising section of the Act).
Generally speaking, the misleading advertising provisions of the Competition Act prohibit false or misleading statements to the public that are made to promote products (including services) or business interests and that are materially false or misleading (i.e., likely to cause an ordinary or average consumer into purchasing a product or otherwise altering their conduct).
The Court reviewed the relevant law under the general misleading advertising provisions of the Act, including the test for materiality, the “general impression test” (the general impression of a claim is relevant under both the criminal and civil misleading advertising provisions in addition to its literal meaning), the fact that the general misleading advertising provisions apply to claims relating to both products or “any business interest” and the law relating to fine print disclaimers.
With respect to materiality, the Court held:
“The false or misleading representations made by the respondents were material. They were intended to deceive and did, in fact, deceive many Canadian businesses and individuals into believing that they were dealing with YPG, when they signed and returned the Unsolicited Faxes and sent payment to the respondents. Materiality of the false or misleading representations is further evidenced by the fact that a majority of complainants stated that they would never have ordered the service by returning the Unsolicited Faxes had they known that the respondents were unaffiliated with YPG and/or would never have paid the respondents invoices or reminder notices had they not believed that they had been sent by YPG.”
With respect to the fine print disclaimers, the Court held:
“The fact that the fine print of the Unsolicited Faxes stated that returning them would bind the recipient to a two year contract does not reduce its false or misleading nature. The fine print did not clarify that the Unsolicited Faxes had not been sent by YPG and the disclosure was insufficiently prominent.”
With respect to the meaning of “business interest” in section 74.01, the Court construed this phrase broadly holding:
“Similar misrepresentations appear in the respondents’ domain names, invoices, reminder notices and letters sent by the respondents. Although the respondents argue that collection efforts after the contract had been completed were not to increase sales, the relevant provision of the Competition Act refers to promoting “any business interest” and not just sales. The phrase ‘business interest’ must be given a wide meaning and collecting money, and threats made in relation to collection efforts, constitute promotion of the respondents’ business interests.”
The Court also found the defendants’ domain names, invoices, reminder notices and letters to be misleading and rejected the defendants’ argument that a due diligence was available.
Under the penalty provisions of the civil misleading advertising sections, a limited defense is available to the corrective notice, administrative monetary penalty and restitution provisions where a person establishes that they exercised due diligence to prevent the reviewable conduct from occurring.
Templates/precedents and checklists to run promotional contests in Canada
Templates/precedents and checklists to comply with Canadian anti-spam law (CASL)
