Archive for the 'Associations' Category
Weil, Gotshal has published an article in Practical Law entitled “How to Prepare for and Respond to a U.S. Antitrust Raid” (see: How to Prepare for and Respond to a U.S. Antitrust Raid).
Given that there are many similarities between searches (or “dawn raids”) in Canada and the United States, we thought this recent note would be of interest to our clients and Canadian firms.
The Globe and Mail posted a short interview with the Commissioner of Competition earlier today by Steve Ladurantaye.
Among the topics discussed by the Commissioner included misleading advertising, the perception that the Competition Bureau only pursues high profile deterrent setting cases, the Bureau’s approach to case selection and its approach to remedies.
Advertising Standards Canada (ASC) will be holding an introductory session to the Canadian Code of Advertising Standards in Toronto on March 27, 2012 entitled Introduction to the Canadian Code of Advertising Standards & Consumer Complaints Procedure.
As our new competition law handbook for associations is now out, The Competition Law Guide for Trade Associations in Canada, we thought we would post a few of the more interesting competition/antitrust association cases from 1905 to 2012.
Our small tiptoe through the history of associations and competition law will include cases involving ambulance operators, banks, building contractors, business forms suppliers, coal dealers, corrugated box manufacturers, corrugated metal pipe manufacturers, electrical contractors, fruit growers, gypsum dealers and manufacturers, insurance salespersons, lawyers, mandarin orange importers, notaries, pharmacists, paper mills, plumbing contractors and suppliers, real estate agents, softwood lumber dealers, surveyors and wholesale grocers, among others.
We’ll wrap up with the ongoing TREB case, the CREA case (settled in the fall of 2010) and a few of the more interesting recent international association cases over the past decade. The following are a couple more golden oldies from the “trusts” era:
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The King v. Clarke (1907)
In The King v. Clarke, the president of the Alberta Retail Lumber Dealers’ Association was accused of conspiracy under section 498 of the Criminal Code. This case involved an agreement among the members of the association to fix the price of lumber in various parts of Alberta, including penalties for non-compliance and pressure on lumber manufacturers to refuse to supply to non-members. The association’s by-laws expressly provided for association price lists, the regulation of price in different geographic regions and penalties for non-compliance by members. The accused was convicted at trial, which was affirmed on appeal.
R. v. McMichael (1907)
In R. v. McMichael, the manager of the Dominion Radiator Company was accused of conspiracy under section 520 of the Criminal Code. This case involved agreements between the Master Plumbers Association and the Central Supply Association, including the Dominion Radiator Company, whereby plumber members would buy all of their goods from suppliers that agreed to only supply to the general public and non-member plumbers at higher prices. The accused was found guilty and ordered to pay a fine and serve three months in prison.
On February 27, 2012, the Commissioner of Competition brought a motion for the production of nine years of MLS data from The Toronto Real Estate Board in this ongoing abuse of dominance case. According to the Commissioner’s motion, the Bureau has unsuccessfully requested this presumably vast volume of MLS data from TREB and now seeks to compel TREB to produce the data, which is, according to the Bureau, “at the very heart of [the] proceeding”.
In particular, the Bureau asserts that TREB’s MLS data is relevant to its assessment of geographic market, market shares of individual brokerages and agents, the ability of real estate brokers that wish to use “virtual office websites” or “VOWs” effectively against incumbent real estate brokers and issues relating to commissions.
The Bureau’s theory in this case is essentially that TREB has abused its dominant position in the residential real estate services market in the Greater Toronto Area through membership rules that restrict its members’ ability to operate “virtual office websites” or “VOWs”.
Real estate board MLS systems in Canada, which are operated by local real estate boards, typically include a range of information relating to both property listings (e.g., price, dimensions and other relevant property characteristics, such as number of rooms, bedrooms, zoning, etc.) and “sold” information once a property is sold (e.g., sale price, number of days a property was on the market, agents involved in the sale, etc.).
While TREB has asserted privacy law concerns regarding the disclosure of its MLS data, the Bureau asserts privacy law exceptions in its pleading. The Bureau also pleads the Tribunal’s discovery rules for the right to obtain production of documents (see: notice of motion, Competition Tribunal Rules).
Hearing dates have been scheduled in this case for September, 2012 (see: Revised Scheduling Order).
We are pleased to announce that we will be facilitating a compliance course at the Real Estate Board of Greater Vancouver on February 29, 2012 entitled “Competition Law and REALTORS®: What You Say and Do Matters”.
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. Read the rest of this entry »
To celebrate our new competition law handbook for associations – The Competition Law Guide for Trade Associations in Canada – we thought we would post a few of the more interesting competition/antitrust association cases from 1905 to 2012.
Our small tiptoe through the history of associations and competition law will include cases involving ambulance operators, banks, building contractors, business forms suppliers, coal dealers, corrugated box manufacturers, corrugated metal pipe manufacturers, electrical contractors, fruit growers, gypsum dealers and manufacturers, insurance salespersons, lawyers, mandarin orange importers, notaries, pharmacists, paper mills, plumbing contractors and suppliers, real estate agents, softwood lumber dealers, surveyors and wholesale grocers, among others.
We’ll wrap up with the ongoing TREB case, the CREA case (settled in the fall of 2010) and a few of the more interesting recent international association cases over the past 10 years or so. To kick things off, the following are a couple of good old ones from the silent film era.
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The King v. Elliott (1905)
In The King v. Elliott, the president of an Ontario coal association was accused of conspiracy under section 520 of the Criminal Code. This case involved association rules that sought to restrict the sale of coal from operators and shippers directly to consumers or non-members. Members of the association were also given rights to certain areas, with the association dictating coal prices and issuing a “look out list” for suppliers of non-members that were not entitled to buy coal directly from suppliers. The Ontario Court of Appeal, in the first successful combines prosecution in Canada, confirmed the lower court’s judgment convicting the accused.
Wampole & Co. v. F.E. Karn Co. Ltd. (1906)
In Wampole & Co. v. F.E. Karn Co. Ltd., plaintiff manufacturing chemists sought damages and an injunction restraining defendant druggists from alleged breaches of a contract, which fixed the wholesale and retail prices of drugs. The defendants argued that the agreements constituted an unlawful conspiracy. The Court agreed, finding that the agreements, which were in the form adopted by two associations (the Association of Retail Merchants and Association of Wholesale Merchants) “entirely destroyed” competition and contravened the Criminal Code.
On January 6, 2012, the Competition Bureau announced its first conspiracy (i.e., cartel) case under Canada’s amended Competition Act, partially brought under the amended section 45 of the Act.
In this case, two companies pleaded guilty of fixing the price of polyurethane foam and were fined a total of C $12.5 million (see: Cartels Update: Bureau Announces $12.5 Million Fine in First Price-fixing Case Under Amended Competition Act and Competition Bureau Sends Signal to Price-Fixers with $12.5 Million Fine).
In making the announcement, believed to be one of a number of ongoing cartel cases currently being investigated, the Bureau described its stepped-up enforcement of cartels as “reinvigorated”:
“’Yesterday’s guilty plea is the first conviction under Canada’s amended conspiracy law,’ said Melanie Aitken, Commissioner of Competition. ‘This investigation highlights the Bureau’s reinvigorated mandate to stop consumer harm caused by price-fixing, and to secure significant fines for these serious criminal offences.’
In other recent remarks, the Bureau has similarly indicated that it intends to enhance its investigation of cartels under Canada’s new conspiracy (cartel) rules:
“In our Criminal work, we continue to concentrate on the, admittedly, lengthy process of ‘changing the game’— reorienting our approach at the Bureau, our processes, and our mindset to a more appropriately aggressive stance to respond, as we must, to our new more powerful criminal provisions.
As we move forward with our new criminal regime, consistency, consistency, and consistency is our focus. There will be no arbitrary relaxing of standards under the Bureau’s watch — a practice that can only impair predictability and fairness in enforcement. Further, we will use our investigative tools such as searches, wiretaps and section 11 orders.
Cartels and bid–rigging continue to be our focus, given the seriousness of this conduct, and its unambiguously harmful nature. We are committed to advancing cases that matter to Canadians, doing so in a timely manner, and following them through to the end.”
(See: Commissioner of Competition, Keynote Speech at the Canadian Bar Association 2011 Fall Conference).
Based on these and other recent developments, we have posted a series of posts on Canadian conspiracy law (for Parts 1, 2 and 3 see: here, here and here). This is the final post – practical steps for companies to take to reduce cartel risk.
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PRACTICAL STEPS FOR COMPANIES TO TAKE TO REDUCE CARTEL RISK
Compliance programs. Adopt an effective compliance program or update the competition law section of an existing compliance program. Some of the benefits of a compliance program include reducing the risk of violating the Competition Act, reducing the costs of investigations and proceedings and potentially mitigating penalties. Options range from formal and extensive compliance programs encompassing all company activities to compliance guidelines for key activities (e.g., meetings, information exchanges and specific initiatives, such as benchmarking, research and development initiatives, joint ventures and strategic alliances with competitors, etc.). For more information on competition law compliance programs see: Compliance Programs and the Competition Bureau’s Corporate Compliance Programs Bulletin.
Templates/precedents and checklists to run promotional contests in Canada
Templates/precedents and checklists to comply with Canadian anti-spam law (CASL)
