Archive for the 'Publications' Category
A few interesting competition and regulatory law developments caught my eye today including:
The Federal Privacy Commissioner announced that she would be tabling the annual PIPEDA Report in Parliament tomorrow: Media Advisory – Commissioner’s annual report on private-sector privacy issues expected to be tabled in Parliament, Privacy Commissioner news release.
Late last week the Federal Attorney General appointed a new Competition Bureau Chairman: Competition Tribunal Appointment Announced.
Gus Van Harten of Osgoode Hall Law School has published an interesting, if critical, note on Canada’s foreign investment rules (thanks to our friend Harpinder Mangat at Carswell who Tweeted this): Not all foreign takeovers are good for Canada.
On May 25th Industry Canada announced it was introducing a new Investment Canada Act (ICA) mediation guideline and would be finalizing Regulations introduced in 2009 to incrementally increase Canada’s ICA review threshold to C $1 billion over four years (see our earlier post).
Industry Canada also issued an annual report discussing the administration of the ICA in 2009 and 2010, recent policy changes and summarizing recent investment activity, the first such report in about twenty years. The following are a few interesting aspects of the Report:
High level trends. The Report states that some of the recent policy changes are intended to address the rise of sovereign investors, need to safeguard Canada’s national security and the market for foreign investment (the “growing global competition for foreign investment”).
Filings. Between April 1, 2009 and March 31, 2010, 437 ICA filings were received (23 applications for review were approved, with a total asset value of $30.8 billion; and 414 notifications were received: 109 for the establishment of new Canadian businesses and 305 relating to acquisitions of control, with a combined asset value of $30.1 billion).
Withdrawn filings. Between June 30, 1985 and March 31, 2010, 172 applications for review and 637 notifications were withdrawn. Two applications (of a total of twelve) were withdrawn following notice to the investors that the Minister was not satisfied that the proposed investments were likely to be of net benefit to Canada. The Report also discusses the blocked Alliant-MacDonald Dettwiler transaction.
Approved applications. In the 2009-10 fiscal year, 23 applications for review were approved, with an average review time of 69 days.
Net benefit to Canada methodology. The Report provides some insight into the Investment Review Division’s methodology for determining whether an investment will be approved (i.e., be found to be of net benefit to Canada, the relevant test), including considering the business’ “likely prospects” of success on a stand-alone basis, what the investor brings to the investment (e.g., capital or expertise not otherwise accessible by the Canadian business being acquired) and potential undertakings. The Report also describes how relevant factors are weighed during a review and states that reviews do not compare competing proposed investments. This discussion is consistent with recent statements by the Government that it would take steps to add increased transparency to Canada’s foreign investment review process. The new report does not, unfortunately, shed much light on the content of the existing net benefit to Canada factors set out in the ICA or how, for example, considerations with no apparent statutory basis (e.g., whether businesses are “strategic assets”, a much used phrase in the BHP/Potash transaction) squares with Investment Canada’s foreign investment review process.
Increased investment activity. In 2009-10, investment activity rose considerably with the total asset value of ICA transactions (applications for review and notifications) almost doubling to $61 billion (increased from $33 billion in 2008-09). The average asset value for reviewable investments increased from $766 million in 2008-09 to $1.34 billion in 2009-10 and the average asset value of notifiable investments increasing from $30 million to $73 million.
Source of investment. U.S. investors represented the largest number of ICA investors over the past five years, followed by EU investors (with U.K. investors representing a large percentage by asset value).
Global Competition Review (Getting the Deal Through) has recently published several new M&A and regulatory law related global surveys (including Canada) in their rather fine series. From GCR:
Mergers & Acquisitions 2102
“Getting the Deal Through is delighted to publish the fully revised and updated thirteenth edition of Mergers & Acquisitions, a volume in our series of annual reports, which provide international analysis in key areas of law and policy for corporate counsel, cross-border legal practitioners and business people.
Mergers & Acquisitions 2012 examines the law and regulation of business combinations and addresses the most important issues for international deals.
Following the format adopted throughout the series, the same key questions are answered by leading practitioners in each of the 67 jurisdictions featured. New jurisdictions this year include Australia, Bolivia, the Cayman Islands, Delaware, the Republic of Georgia, Indonesia, Kazakhstan, Kuwait, Kyrgyzstan, Pakistan, Peru, Serbia and Tajikistan. Global and EU overviews are also provided.
Many legal disciplines come into play in large M&A deals. In particular, advisers must take account of competition regulation. This volume contains an appendix covering merger control rules across the world. For a more detailed analysis please refer to another volume of the Getting the Deal Through series: Merger Control.”
On May 22, 2012, the American Bar Association issued joint Antitrust and International Law Section comments on the Competition Bureau’s revised draft Abuse of Dominance Enforcement Guidelines. (The Bureau issued revised draft Abuse Guidelines for public comment on March 22nd – see: Competition Bureau Issues Revised Abuse of Dominance Guidelines for Comment).
Some of the more interesting points of the ABA Sections’ joint comments include:
Unilateral conduct. The Sections recognize that unilateral conduct is inherently ambiguous (as well as the relative vacuum of section 79 abuse of dominance jurisprudence to date in Canada, unlike some other major jurisdictions including the United States and European Union).
AMPs. The Sections call for additional guidance as to when the Bureau will seek administrative monetary penalties (the current revised draft Guidelines describe when the Tribunal may order AMPs but contain no guidance as to when the Bureau may seek AMPs, which were introduced in March, 2009 and expose companies to penalties of up to $15 million). The ABA Sections specifically recommend that the Bureau “offer guidance on practical aspects of the use of AMPs, including when and why AMP remedies will be sought by the Bureau, the scale of AMPs likely to be sought, and what type of conduct will typically be in issue when AMPs are sought.”
Examples and analysis. The Sections criticize the significant reduction in examples and analysis in the revised draft Guidelines compared to the previous 2001 Guidelines, which the ABA refers to as a “substantial loss of guidance to the business community”.
Intent and joint abuse. The Sections question why the Bureau has chosen to take the position that intent to injure or exclude a competitor is not a necessary element of abuse under section 79 (which is well established in Canada) and call for increased guidance on the Bureau’s position of what will constitute joint dominance (an issue that remains unsettled in Canada). With respect to intent, it is well established that an allegedly dominant firm must engage in intentional anti-competitive conduct (i.e., conduct that is “predatory, exclusionary or disciplinary” toward a competitor).
Replacement of sector and conduct specific guidelines. The Sections ask for clarification as to whether the Bureau’s updated Abuse Guidelines are meant to replace earlier sector and conduct specific abuse related guidelines (including the Bureau’s draft Enforcement Guidelines on Abuse of Dominance in the Airline Industry, grocery abuse guidelines (Abuse of Dominance Provisions as Applied to the Grocery Sector), Information Bulletin on the Abuse of Dominance Provisions as Applied to the Telecommunications Industry and Predatory Pricing Enforcement Guidelines).
Regulated conduct defence. The Sections suggest that earlier language be added once again to the current draft relating to whether (and under what circumstances) the Bureau will consider the application of Canada’s regulated conduct defence (a previously completely common law doctrine, recently partially codified under section 45 of the Competition Act, but which remains unsettled in relation to the Competition Act’s civil reviewable practices provisions including section 79).
The ABA Sections’ comments also address other aspects of the Bureau’s draft Guidelines including the hypothetical monopolist test, degree of market power (and time period during which market power must be exercised for control of a market(s) to exist), business justifications (which the Federal Court of Canada has held can offset allegedly anti-competitive acts) and the interplay between sections 79 (abuse of dominance) and 90.1 (civil agreements provision) of the Act.
For the ABA’s cover letter and comments see:
CANADIAN CONTEST RULES/PRECEDENTS
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The Canadian Institute is hosting an upcoming contest conference entitled “Managing Legal Risks in Running Online Contests” on June 21-22 2012 in Toronto. Their conference will include discussions on topics that include minimizing the risks of operating online contests, online voting contests, operating Facebook and Twitter contests, mobile contests and mitigating risk when online contests go wrong.
In March, 2009, sweeping amendments to the Competition Act came into force that included, among many other things, the introduction for the first time in Canada of monetary penalties for abuse of dominance (“administrative monetary penalties” or “AMPs”). Under Canada’s amended section 79, the Competition Tribunal may now order AMPs of up to $10 million ($15 million for subsequent orders).
Since that time, one contested abuse case has proceeded to the Competition Tribunal (the Bureau’s ongoing challenge against The Toronto Real Estate Board, in which the Bureau is seeking only remedial remedies not AMPs) and two new versions of the Bureau’s Abuse of Dominance Enforcement Guidelines have been issued for comment (the current draft version of which, while setting out when the Tribunal may order AMPs in abuse cases, provides no guidance as to when the Bureau will seek them).
On May 15, 2012, the C.D. Howe Institute’s Competition Policy Council issued a report, the result of its third meeting on May 7, 2012, calling for the Bureau to clarify its position as to when it will seek AMPs in abuse cases. (Unlike some provisions of the Act, in Canada the Bureau has exclusive jurisdiction to bring and prosecute abuse cases, which are heard before the federal Competition Tribunal.)
In issuing the Report, the C.D. Howe Institute’s Council said:
“The Competition Bureau should clarify how it will apply its powers under the Competition Act in seeking administrative monetary penalties for abuse of dominance, according to a consensus of the C.D. Howe Institute’s Competition Policy Council, which held its third meeting on May 7, 2012. …
There was a range of views among the Council members about whether AMPs for abuse of dominance are ever appropriate. Some members contended that AMPs are appropriate as a deterrence mechanism. Others expressed the view that the possibility of a firm’s being subject to AMPs would chill efficient arrangements. There was unanimity, however, on the point that the risks of over-deterrence associated with AMPs are real, and that it would be appropriate to know how the Bureau plans to approach the issue of AMPs in particular cases. Accordingly, the Council’s key recommendation is that the Competition Bureau issue guidance and explain the basis on which it will assess the AMPs it seeks.”
Some of the issues discussed in the Council’s Report include the constitutionality of AMPs (as yet to be determined) and a more reticent Bureau in terms of its abuse of dominance enforcement positions.
With respect to the latter, the Commissioner of Competition has indicated in recent public remarks that the markedly shorter draft Abuse Guidelines currently subject to public comments is an effort to let the Competition Tribunal, not the Bureau, decide where the boundaries of section 79 lie (which provides little comfort to firms given that there have only been about ten contested abuse cases since the modern Competition Act was introduced in 1986).
For a copy of the C.D. Howe Institute’s news release and Report see:
The following are a few competition and regulatory law developments that caught my eye today:
The Saskatchewan Government issued a review report on the proposed Glencore/Viterra transaction calling for, among other things, conditions to ensure compliance with Glencore’s Investment Canada Act commitments and a review of potential competition concerns in the retail (i.e., crop input) markets: Government Releases Review of Glencore Acquisition of Viterra
The OECD issued a new Procedural Fairness and Transparency Report, which includes recent Competition Bureau transparency initiatives: Procedural Fairness and Transparency – Key Points 2012
The International Trade Minister delivered remarks to the Canadian Manufacturers & Exporters (BC) about the new Canada-EU trade agreement: International Trade Minister Ed Fast Highlights Benefits of Canada-EU Trade Agreement to Canadian Manufacturers & Exporters
The Canadian Council of Chief Executives has commented on competition and infrastructure in Canada to supply Chinese energy needs: Canada: Competing for China’s energy needs
The CRTC’s Executive Director of Broadcasting addressed innovation and competition in local radio and television markets in BC: Speech to the 65th annual conference of the British Columbia Association of Broadcasters
The Competition Bureau issued its April Monthly Merger Review Report: Merger Review Report
The OECD has published a new booklet (Procedural Fairness and Transparency – Key Points 2012) that summarizes three roundtable discussions on transparency and procedural fairness in 2010 and 2011, as part of the OECD’s Competition Committee’s Working Party No. 3. The OECD’s booklet summarizes 82 written submissions, eight presentations by various national delegations and commentary from competition law practitioners and experts.
The OECD’s booklet also includes discussions of recent transparency related initiatives by the Canadian Competition Bureau including new compliance, merger and Immunity Program related guidelines; the Bureau’s transparency self-assessment (began in 2010, which has resulted in, among other things, its new monthly Merger Registry and merger statements); areas of improvement with respect to transparency (including in relation to merger review and the review of the Bureau’s consent agreement process); and the Bureau’s policies relating to the exchange of confidential information with international agencies.
For a copy of the OECD booklet see:
Templates/precedents and checklists to run promotional contests in Canada
Templates/precedents and checklists to comply with Canadian anti-spam law (CASL)
