Random Advertisements.
One form of Internet advertising. Office of the Privacy Commissioner of Canada, Policy Position on Online Behavioural Advertising: “These are ads that are randomly placed. Since these advertisements are not based on website content or user preferences, they would typically be less economically successful to marketers.”
Random or ‘random draw’ contest.
Contests generally fall into two categories: skill contests (e.g., judged story-writing, photography or other skill competitions) and random contests (e.g., contests where winners are selected by random draw). Random contests can include random draws, seeded games (e.g., where prizes may be found under bottle caps, etc.), scratch-and-win cards, instant win games online or so-called “match and win” games (in which participants collect game pieces for a game, puzzle, etc.).
A “random draw” type of contest is one in which winners are chosen by a random draw from all eligible entries received (as opposed to, for example, a skill contest, where a contest entrant may have to compete with other entrants to win prizes).
B. Pritchard & S. Vogt, Advertising and Marketing Law in Canada, 4th ed. (Toronto: LexisNexis, 2012): “Contests can be divided into two broad categories: skill contests and contests where prizes are awarded randomly. Until recently, skill contests – where winners are selected by experienced judges based on the contestants’ skill at story-writing, photography, etc. – were much less common. Contests where winners are chosen at random include: sweepstakes where prizes are awarded by random draw; seeded games (including Coke’s ‘under the bottle cap’ promotions and Tim Hortons’ ‘Roll Up The Rim To Win’), where prizes are randomly seeded on game cards or on-pack, and participants must scratch, unpeel or otherwise reveal the prize area to discover whether they have won a prize; online instant win games where consumers enter a code number (usually obtained on-pack); and ‘match and win’ games where participants must collect game pieces to spell specific words or match the pieces of a puzzle.”
For more information about Canadian contest/sweepstakes law, see: Contests, Contests and CASL, Contest FAQs, Contest Tips and Contests and Social Media.
For information about the Canadian contest/sweepstakes precedents (template rules) and checklists that we offer for sale, see: Canadian Contest Forms/Precedents.
Ransomware.
A form of online fraud.
Canadian Anti-Fraud Centre: “Computers being frozen or [locking out] their users. This happens primarily after complainants receive pop-up messages warning them their computers have been associated with child pornography and illegal music downloading. These warning messages, which claim to come from the RCMP or other Canadian government agencies, tell recipients to pay [money] so their computers can be ‘unlocked.’ These types of messages, known as ransomware, are scams designed to create shock and anxiety so that victims respond by sending money quickly.”
Rebate.
Competition Bureau, Enforcement Guidelines, Consumer Rebate Promotions (2009): “Consumer rebate promotions include any type of promotion that involves a partial refund or discount from a manufacturer or retailer to consumers upon the purchase of a product. Refunds are normally paid in the form of cash or a cheque. For the purposes of this publication, ‘rebate’ is defined as excluding gift cards and other forms of credit on future purchases, given that the term ‘rebate’ can create the general impression in the minds of consumers that a portion of the price of the product will be returned to them. Rebates can be beneficial to both consumers and businesses. For consumers, rebates can result in lower effective prices. For businesses, rebates provide a flexible tool that may increase the volume of sales. However, when rebates are not promoted or administered correctly, consumers may ultimately pay more than intended, and competitors can be unfairly disadvantaged. There are two types of rebates: Instant rebates – Consumers receive the rebate at the time of purchase. The rebate is generally available to anyone who purchases the product, without further condition; Mail-in rebates – Consumers apply for the rebate after the purchase, by mail-in application, online or by other means. ‘mail-in rebate’ includes mail-in, Internet and other delayed- payment rebates. Various market participants may be involved in promoting and administering rebates.”
Competition Bureau, News Release, “Are You Getting the Real Deal? Understand Rebate Promotions Before You Buy” (December 14, 2009): “True rebates involve a partial refund or discount on the purchase of a product, which is normally paid in the form of cash or a cheque. By contrast, some promotions offer gift cards or credits to be used on future purchases. While these may be a good deal, they are not rebates.”
Consumers Council of Canada: “True rebates involve a partial refund or discount on the purchase of a product, which is normally paid in the form of cash or a cheque. By contrast, some promotions offer gift cards or credits to be used on future purchases. While these may be a good deal, they are not rebates.”
Regulated conduct defence.
Competition Bureau contribution, OECD Policy Roundtable, Regulated Conduct Defence (2011): “The [“regulated conduct defence” (“RCD”)] is one of a number of interpretive tools developed by Canadian courts to resolve potential conflicts between validly enacted laws. Under certain limited conditions, the RCD, and other interpretive tools, may remove from the application of the [Competition Act] conduct that is authorized or required by another federal, provincial or municipal law or legislative regime.”
OECD, Policy Roundtable, Regulated Conduct Defence (2011): “The regulated conduct defence allows antitrust immunity where conduct is required by federal or state regulation. The regulated conduct defence is important to ensure that the state can exercise its sovereign power to apply regulation that it deems justified for economic and/or social reasons even though the regulation may conflict with competition policy. The defence is also important to ensure firms do not face multiple inconsistent legal demands, in particular from regulations and competition law. Nevertheless, the regulated conduct defence also bears important risks including high potential costs for society. Indeed, the defence may preserve unduly anti-competitive regulation entailing welfare cost not necessary for achieving the regulatory objective. The defence may also lead to competition law exemptions of only weakly regulated conduct.”
R. v. Independent Order of Foresters (1989), 26 C.P.R. (3d) 229 (Ont. C.A.): “The [regulated conduct defence] simply means that a person obeying a valid provincial statute may in certain circumstances, be exempted from the provision of a valid federal statute. But there can be no exemption unless there is a direction or at least authorization to perform the prohibited act.”
Industrial Milk Producers Association v. British Columbia (Milk Board) (1988), [1989] 1 F.C. 463 (Fed. T.D.), per Reed J.: “… I accept counsel for the plaintiffs’ argument that it is a regulated industry defence, not an exemption which is pertinent. Indeed as I read the cases it is a regulated conduct defence. It is not accurate merely to identify an industry as one which is regulated by federal or provincial legislation and then conclude that all activities carried on by individuals in that industry are exempt from the Competition Act. It is not the various industries as a whole, which are exempt … but merely activities which are required or authorized by the federal or provincial legislation as the case may be. If individuals involved in the regulation of a market situation use their statutory authority as a spring board (or disguise) to engage in anti-competitive practices beyond what is authorized by the relevant regulatory statute then such individuals will be in breach of the Competition Act.” [emphasis in original]
Overview of Some Aspects of the RCD in Canada
The regulated conduct defence (“RCD”), which has been partially codified in subsection 45(7) of the Competition Act as a result of the 2009 amendments to the Act, is the Canadian equivalent of the U.S. state action immunity doctrine. When met, the RCD offers a form of immunity from enforcement under the Competition Act for legislatively authorized or mandated conduct. As such, the RCD can operate as a defence to some types of activities that would otherwise be subject to the Act.
The Competition Bureau’s “Regulated” Conduct Bulletin (the “RCD Bulletin”) sets out the Bureau’s general approach to the RCD in light of the amendments to the Act. For the RCD to apply, all of the following requirements must be met: (a) valid legislation, (b) conduct is legislatively mandated or authorized, (c) the authority to regulate has been exercised and (d) the regulatory scheme has not been hindered or frustrated by the conduct (or used as a “shield” to engage in unauthorized anti-competitive conduct).
Before the 2009 amendments to the Competition Act, it was not clear whether the RCD would apply as a defence in relation to provisions of the Act that did not contain so-called “leeway” language indicating that other legislation may apply (e.g., the phrase “unduly” preventing or lessening competition under the former section 45). This uncertainty arose as a result of the Supreme Court of Canada’s decision in Garland v. Consumers’ Gas Co. which held that in the absence of such “leeway” language in the relevant federal legislation the RCD would not apply. This issue may now have been removed, at least with respect of the application of the RCD under section 45 (conspiracy agreements), given that subsection 45(7) now expressly refers to the former common law RCD as a defence.
The addition of the RCD to section 45, however, raises new questions including whether and to what extent the RCD continues to apply as a defence to other provisions of the Act. With respect to other criminal offences under the Act, the Bureau’s position in its RCD Bulletin is that it will apply Garland to determine whether Parliament intended that the particular provision apply to the conduct and, if so, it “may still refrain from pursuing the case in reliance on the RCD.” With respect to civil reviewable matters, the Bureau takes a more cautious approach stating that until RCD case law is further developed, it will consider the RCD in relation to reviewable matters but “will not consider RCD case law to be dispositive.”
The fact that this former common law defence has been partially codified under section 45 also does not resolve some of the existing uncertainties about its scope and application. These include whether the RCD: (i) operates as a defence or an exception under other provisions of the Competition Act, (ii) applies equally to regulated persons (so-called “regulatees”) as to regulators, (iii) applies to civil reviewable matters as it does to criminal offences, (iv) applies in the federal sphere (i.e., where federal legislation provides the authorization for challenged conduct) and (v) the level of legislative authorization needed to invoke the RCD.
REQUIREMENTS
Valid legislation
The first condition for the application of the RCD is that there be validly enacted provincial or federal legislation mandating or authorizing challenged conduct. This is based on the principle that competition law liability should not be incurred for activities that are directed or authorized by other validly enacted legislation.
The mere fact that a particular industry or profession is generally regulated, however, will not provide a shield from the application of Canadian competition law. For example, in Industrial Milk, the court held: “[i]t is not the various [regulated] industries as a whole, which are exempt from the application of the Competition Act but merely activities which are required or authorized by the federal or provincial legislation as the case may be.”
Conduct is mandated or authorized
The second condition for invoking the RCD is that the challenged conduct must be required or authorized by validly enacted provincial or federal legislation.
With respect to the degree of authorization, Canadian courts have held that the RCD may apply not only where conduct is mandated but also where there is specific or general authorization for the challenged activities. The Bureau has also acknowledged that the RCD may apply where conduct is merely authorized as opposed to being mandated or compelled.
Despite the fact, however, that some Canadian courts have held that mere general authorization is enough to invoke the RCD, the level of authorization required remains unclear and unsettled. For example, in the Law Society case, the Ontario General Division held that the “regulated conduct defence will apply to individuals and companies which are subject to regulation, and to regulatory agencies themselves, provided the impugned conduct is mandated, required or authorized by validly enacted legislation. Similarly, in Industrial Milk, the court held that activities that are required or merely authorized by federal or provincial legislation may be exempt from the application of the Competition Act.
Despite these cases, Canadian courts have been inconsistent in articulating the degree of authorization needed to invoke the RCD. For example, in Jabour, the Supreme Court of Canada held that a “broadly styled” mandate to determine what constituted “conduct unbecoming” lawyers was sufficient authority for the Law Society of British Columbia to invoke the RCD as a defence to regulating members’ advertising, despite the fact that the Law Society’s statutory authority did not specifically address advertising.
Based on the Supreme Court’s liberal application of the RCD, Jabour is considered to be the “high water mark” for a permissive approach to the level of authorization needed to invoke the RCD. By contrast, some later cases have taken a more restrictive approach. For example, in Mortimer, a by-law enacted by an association of land surveyors establishing mandatory minimum fee tariffs was challenged. The British Columbia Supreme Court held that the RCD did not apply because, while the association’s enabling legislation granted some tariff-making powers, it was not clear that the legislation included the power to set minimum tariffs or fees. The enabling legislation was construed strictly by the Court, which held that if the legislature had intended to give the association the power to set mandatory minimum tariffs it would have clearly done so.
Given that conduct must be mandated or authorized for the RCD to apply, courts in several cases have similarly refused to apply the RCD where there was no legislative authority for the challenged conduct. For example, the RCD was held not to apply to a county law association that had not been delegated the authority to enforce a minimum fee schedule. In another case, a Quebec notaries association pleaded guilty to conspiring to fix the prices of real estate services where the Quebec government no longer regulated notarial fees.
Regulatory authority exercised
The third requirement to invoke the RCD is that the regulatory power conferred by legislation must be exercised. The RCD will not apply where a regulator has forborne from regulating.
For example, in B.C. Fruit Growers Association, members of a fruit growers association entered into an agreement with fruit packing houses to refuse to supply services to non-member growers. The fruit growers association argued that the former Combines Investigation Act did not apply on the basis that there was authorization for the actions of the accused, given that the relevant legislation provided for a marketing board to be appointed to regulate the operation of packing houses. The Court rejected this argument, finding that although a marketing board had been legislatively established, it had not exercised any authority it might have had to restrict the supply of packing services.
Regulatory scheme not frustrated
Finally, the RCD will only apply where the exercise of regulatory authority has not been frustrated by the conduct being regulated. For example, in R. v. Canadian Breweries Ltd., it was held that if the regulation of an industry is hindered by the behavior of those subject to the regulation, the RCD will not apply to protect them.
The RCD also cannot be used by a regulatory body as a shield for anti-competitive conduct outside the scope of the statutory regime. For example, in Industrial Milk, it was held that if “individuals involved in the regulation of a market situation use their statutory authority as a spring board (or disguise) to engage in anti-competitive practices beyond what is authorized by the relevant regulatory statute then such individuals will be in breach of the Competition Act”.
Reloading.
A form of fraud.
U.S. Federal Trade Commission: “Double scammers are known as ‘reloaders.’ They use several methods to rip off consumers: (i) they call – claiming to work for a government agency, a private company, or a consumer organization that could recover money you lost or a product or prize that hasn’t been delivered yet – for a fee. The catch is that the second caller is following up on the first fraud, and may even work for the company that took your money originally. If you pay the recovery fee, you will have been fooled twice. You can expect more calls – and more convincing stories; (ii) another scam uses prizes as incentives to get you to continue to buy merchandise. If you make one purchase, chances are you will get a second call claiming you’re eligible to win a more valuable prize if you keep buying. The second caller makes you think that buying more merchandise increases your chances of winning. If you act on the offer, you may be called yet again with the same sales pitch.”
Canadian Department of Justice, Report of the Canada – United States Working Group on Telemarketing Fraud (Updated December 1, 2011): “These target the same victims again and again. Persons victimized once are most likely to be deceived repeatedly. Unfortunately, victims’ understandable desires to recover their original losses make them more vulnerable to further schemes. This is known as ‘reloading’ or ‘loading.’ Those who ‘invest’ money are ‘reloaded’ for more to protect or increase their investment, those asked for customs or shipping fees are ‘reloaded’ for additional charges, and those who give to a spurious ‘worthy cause’ are often ‘reloaded’ for further donations. ’Recovery room’ schemes exploit the victim’s desire to recover losses from previous frauds. Offenders, often from the same organization which defrauded the victim in the first place, call with inside knowledge of the fraud and a promise to recover the losses if ‘taxes’ or ‘fees’ are paid. A common tactic of callers is to represent themselves as law-enforcement or other government or professional employees (e.g., bank or stock-exchange officials), using inside knowledge of the victim and the fraud to establish credibility. ‘Recovery room’ operations frequently deprive victims of their last remaining funds.”
Robocall.
A term used in the telemarketing industry to refer to the use of “automated calling devices”.
See e.g., CRTC: “Automated calling devices are used to dial telephone numbers and automatically deliver a pre-recorded message. The CRTC’s Automatic Dialing and Announcing Device Rules prohibit telemarketers from using these devices to sell or promote a product or service unless a consumer has consented to be called by them. They can, however, be used by police and fire departments, schools and hospitals if they have a valid public service message to communicate. Automated calling devices can also be used for appointment reminders and thank you calls.”
U.S. Federal Trade Commission: “If you pick up the phone and hear a recorded message instead of a live person, that’s a robocall. If the recording is a sales message (not a call from your healthcare provider or a charity), and you haven’t given your written permission to get calls from the company on the other end, the call is illegal. Period.”
Romance scam.
A type of fraud.
Canadian Anti-Fraud Centre: “Generally, Romance scams involve the victim and the fraudster meeting through a social networking site. The fraudster will gain the trust of the victim through displays of affection. While the fraudster is usually located in a far away country, eventually want to meet the victim in person. It is at this time the fraudster will advise they can’t afford to travel and will seek assistance from the victim in covering travel cost. Other variations include the fraudster presenting situations of emergency/ urgency, such as a sick family member, and seeking financial assistance from the victim for various costs. Some incidents have also occurred at the local level and involved the victims actually meeting the suspects to go out on dates and meeting at the victim residence. These cases are creating concerns for personal safety. For example, in one incident the victim reported having her wallet and some jewelry stolen from home.”
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SERVICES AND CONTACT
We are a Toronto based competition and advertising law firm offering business and individual clients efficient and strategic advice in relation to competition/antitrust, advertising, Internet and new media law and contest law. We also offer competition and regulatory law compliance, education and policy services to companies, trade and professional associations and government agencies.
Our experience includes advising clients in Toronto, Canada and the United States on the application of Canadian competition and regulatory laws and we have worked on hundreds of domestic and cross-border competition, advertising and marketing, promotional contest (sweepstakes), conspiracy (cartel), abuse of dominance, compliance, refusal to deal and pricing and distribution matters. For more information about our competition and advertising law services see: competition law services.
To contact us about a potential legal matter, see: contact
For more information about our firm, visit our website: Competitionlawyer.ca
QR code or “quick scan response code”.
Canada Business Network blog: “As mobile technology develops and smartphone ownership increases, your customers may want to access your business through QR codes. By using a camera on their cell phone to scan quick response (QR) codes, potential customers can reach your website immediately for more product information or a special offer linked directly to the code. But why not also target your mobile-equipped audience to measure the success of specific marketing campaigns? QR codes are black modules of pixels arranged in a square pattern on a white background that can ease the offline-to-online consumer experience. These specific matrix codes hold up to 7,089 characters compared to the 20-digit capacity of a typical bar code, so you can embed more information. Analytics tools show your codes’ performance, allowing you to use the data for future decisions. (…) Let QR codes build business by placing them: in print ads to drive customers to your website where they can enter a contest, claim a coupon or access exclusive content; on packaging to link directly to product reviews or detailed information that can help drive the purchasing decision; on your storefront to entice savvy customers in for a freebie; on your business card to link to a promo video about your work or your latest blog post.”
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SERVICES AND CONTACT
We are a Toronto based competition and advertising law firm offering business and individual clients efficient and strategic advice in relation to competition/antitrust, advertising, Internet and new media law and contest law. We also offer competition and regulatory law compliance, education and policy services to companies, trade and professional associations and government agencies.
Our experience includes advising clients in Toronto, Canada and the United States on the application of Canadian competition and regulatory laws and we have worked on hundreds of domestic and cross-border competition, advertising and marketing, promotional contest (sweepstakes), conspiracy (cartel), abuse of dominance, compliance, refusal to deal and pricing and distribution matters. For more information about our competition and advertising law services see: competition law services.
To contact us about a potential legal matter, see: contact
For more information about our firm, visit our website: Competitionlawyer.ca
October 23, 2009
CANADIAN MERGER CONTROL
I. Overview
The pre-merger notification provisions of the federal Competition Act (the “Act”) require both parties to specified types of transactions that exceed the statutory monetary thresholds under the Act to file pre-merger notification filings with the federal Competition Bureau (the “Bureau”).
In addition, regardless of size, any transaction that falls within the statutory definition of “merger” under the Act is potentially subject to substantive review by the Bureau to determine whether it is likely to result in a substantial prevention or lessening of competition in a relevant market or markets.
In other words, while the Act contains statutory monetary thresholds requiring that notification be made for transactions exceeding a certain size, mergers that fall below the statutory thresholds are also potentially subject to substantive review by the Bureau.
For mergers that exceed the statutory monetary thresholds, notification is mandatory and failure to notify is a criminal offence.
II. Pre-merger Notification
In order for a transaction to be notifiable in Canada it must: (i) involve the acquisition of an “operating business” in Canada, (ii) be one of five specified types of transactions, (iii) exceed the statutory monetary thresholds and (iv) not fall within one of the statutory exceptions in the Act.
(a) Canadian Operating Business
In order for a transaction to be notifiable in Canada, it must involve the acquisition of an “operating business” in Canada, which is defined under the Act as a business undertaking in Canada to which employees employed in connection with the undertaking ordinarily report for work. In this regard, the Bureau has taken the position that employees may include both independent contractors and part time employees.
(b) Types of Transactions
The five types of transactions that require pre-merger notification filing, assuming all of the other requirements are met, are: (i) asset acquisitions, (ii) share acquisitions, (iii) amalgamations, (iv) non-corporate combinations and (v) acquisitions of interests in non-corporate combinations.
(c) Thresholds
A transaction must exceed the “size of parties” and “size of transaction” thresholds under the Act, which are cumulative.
With respect to the size of parties threshold, the parties and their affiliates’ Canadian assets (or gross revenues from sales in, from or into Canada) must exceed CDN $400 million. With respect to the size of transaction threshold, the book value of the target’s assets in Canada (or annual gross revenues from sales in or from Canada generated by those assets) must exceed CDN $70 million.
For share acquisitions, there is an additional threshold. For the acquisition of public companies, the acquisition must result in the acquirer holding more than 20% of the voting shares (more than 50% if more than 20% is already held). For the acquisition of private companies, the acquisition must result in the acquirer holding more than 35% of the voting shares (more than 50% if more than 35% is already held).
(d) Exceptions
The Act also contains a number of exceptions from the pre-merger notification requirements, including certain ordinary course acquisitions of real property and goods, an underwriting exception, transactions between affiliates and where an Advance Ruling Certificate (”ARC”), which is one form of pre-merger clearance under the Act, is obtained.
III. Who Must Notify
Both parties to a transaction (i.e., both the acquirer and the target) are required to file a pre-merger notification filing. Parties may request that an ARC or “no action” letter be issued. Parties will also often file a separate competitive effects brief with a pre-merger notification filing setting out the reasons why the proposed transaction is unlikely to prevent or lessen competition substantially in the relevant market(s).
IV. Waiting Periods
Canada is a “suspensory” jurisdiction (i.e., parties to a notifiable transaction are not permitted to complete a transaction after filing unless the applicable waiting period has expired or clearance has been received). Following recent significant amendments to the Act, Canada now has a U.S. style two-stage merger review process.
Under the new regime, filing triggers an initial 30 calendar day waiting period during which the parties to a transaction are not permitted to complete unless clearance has been received (either by receipt of a no action letter or ARC).
During this initial 30 day waiting period the Bureau may advise the parties to the transaction that it does not intend to challenge the transaction. Alternatively, where the Bureau takes the position that there are potential issues, it may make a supplementary information request (the equivalent of a U.S. second request). If the Bureau does so, the waiting period stops until a complete response has been filed whereby a second 30 day waiting period begins in which the parties are not permitted to close (again, unless clearance is received).
Under the new regime, there is no limit as to how long the second request process can take. This is because the burden is on the merging parties to complete the request and, where a second request is made, the “clock” will not start again until the order has been fully complied with (compared to the lesser standard of substantial completion in the U.S).
In addition, while parties are free to complete a transaction after 30 days of complying with a second request, the Bureau is not required to have finished its review by that time. As such, parties may either opt to wait for the Bureau to complete its review or close and assume the risk that the Bureau may challenge the transaction post-closing.
The recently amended Act also now gives a court or the Competition Tribunal new powers relating to non-compliance with the statutory waiting periods. These include, for a proposed transaction, the power to issue an interim injunction or compel the filing of information and, for a completed transaction, the power to order that the merger be dissolved, an order for the divestiture of shares or assets or “administrative monetary penalties” (essentially civil fines) of up to CDN $10,000 for each day of non-compliance.
V. Clearance
Parties may complete a transaction when: (i) an ARC is received, which is the strongest form of clearance under the Act and typically issued in non-complex transactions where there are few or no issues and no overlap, (ii) a “no action letter” is received stating that the Commissioner does not, at that time, intend to apply to the Tribunal for remedies or (iii) the applicable statutory waiting period have expired.
It is worth noting, however, that the Bureau has the power to continue to review a transaction after the applicable waiting periods have expired if clearance has not been received.
VI. Hostile Transactions
There are special rules under the Act for hostile transactions. Under these rules, the initial 30 day review period begins on receipt of a complete filing from the bidder and the Bureau will notify the target that a filing has been received from the bidder and give the target 10 days to file from the date the target is notified.
In addition, the second 30 day waiting period, where a supplementary information request has been issued, begins when the Bureau receives the requested information from the bidder (i.e., regardless of when the target complies), which is intended to prevent targets from stalling a transaction by delaying filing.
VII. Filing a Merger Notification
The Bureau’s Merger Notification Unit (“MNU”) is responsible for all pre-merger notifications in Canada. The MNU also gives guidance to parties regarding timing and information requirements for merger notification filings and enforces compliance with the pre-merger notification provisions of the Act.
VIII. Substantive Review
Broadly speaking, the substantive review of a merger involves an analysis as to whether a proposed transaction is likely to prevent or lessen competition substantially in one or more relevant markets post-merger (i.e., to assess what the potential anti-competitive effects of a merger may be). Whether a merger is likely to prevent or lessen competition substantially in a relevant market turns largely on whether the merged firm will be able to exercise a materially greater degree of market power in a relevant market(s) post-merger.
The framework to analyze the potential anti-competitive effects of a transaction includes evaluative criteria in the Act, Competition Tribunal (“Tribunal”) merger decisions and the Bureau’s Merger Enforcement Guidelines (“MEGs”).
In assessing potential competition issues associated with a merger, the Bureau considers both “unilateral effects” (i.e., whether the merged firm alone is likely to be able to exercise market power post-merger) and “coordinated effects” (i.e., whether a group of firms together are likely to be able to exercise market power post-merger).
This analysis of market power involves, among other things, the review of a number of factors including the estimated market shares of the parties, concentration in the relevant market (or markets), barriers to entry and other so-called “evaluative criteria” including effective remaining competition, foreign competition and countervailing power of customers.
Where the Bureau takes the position that a proposed merger is likely to prevent or lessen competition substantially, the Commissioner may seek remedial orders from the Tribunal including an order to block the merger (in the case of a proposed merger) or an order for the dissolution of assets of shares (in the case of a completed merger). The Bureau has also sought injunctions in the past to allow more time for substantive review.
With respect to market shares, the Bureau takes the position in the MEGs that it will generally not challenge a merger on the basis of a concern of a unilateral exercise of market power where the post-merger share is less than 35% and will not generally challenge a merger on the basis of a concern of a coordinated exercise of market power if: (i) the combined post-merger share of the four largest firms in the relevant market (CR4) is less than 65% or (ii) the post-merger share of the merged entity is less than 10%.
IX. Challenging a Merger
The Bureau has exclusive jurisdiction to challenge mergers under the Act and may challenge a merger either before or after closing. The Bureau may seek an injunction to prevent closing or make applications to the Tribunal for remedial orders.
Remedial orders that the Tribunal may make include an order to block the merger, an order for the dissolution of the merger or for the disposition of assets or shares. The Bureau may also challenge a transaction for up to one year after closing (which has recently been shortened from the previous three years).
However, while the Commissioner has the power to make applications to the Tribunal for remedial orders, contested merger proceedings are relatively rare in Canada with the majority of issues being resolved by way of negotiated settlements (i.e., consent agreements).
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SERVICES AND CONTACT
I am a Toronto competition and advertising lawyer offering business and individual clients efficient and strategic advice in relation to competition/antitrust, advertising, Internet and new media law and contest law. I also offer competition and regulatory law compliance, education and policy services to companies, trade and professional associations and government agencies.
My experience includes advising clients in Toronto, Canada and the US on the application of Canadian competition and regulatory laws and I have worked on hundreds of domestic and cross-border competition, advertising and marketing, promotional contest (sweepstakes), conspiracy (cartel), abuse of dominance, compliance, refusal to deal, pricing and distribution, Investment Canada Act and merger matters. For more information about my competition and advertising law services see: competition law services.
To contact me about a potential legal matter, see: contact
For more regulatory law updates follow me on Twitter: @CanadaAttorney
Performance claim.
Ontario Superior Court of Justice, Canada (Competition Bureau) v. Chatr Wireless Inc., 2013 ONSC 5315 (CanLII): “The burden of proving adequate and proper testing lies upon the respondents by virtue of the express wording of s. 74.01(1)(b) of the Competition Act. The adequate and proper test must be made prior to the representation to the public. … The phrase ‘adequate and proper test’ is not defined in the Competition Act. Whether a particular test is ‘adequate and proper’ will depend on the nature of the representation made and the meaning or impression conveyed by that representation. Subjectivity in the testing should be eliminated as much as possible. The test must establish the effect claimed. The testing need not be as exacting as would be required to publish the test in a scholarly journal. The test should demonstrate that the result claimed is not a chance result …”
Competition Bureau, Ensuring Truth in Advertising, Misleading Advertising and Labelling: “Businesses should not make any performance claims unless they can back them up. The Competition Act prohibits any representation in the form of a statement, warranty or guarantee of the performance, efficacy or length of life of any given product, not based on adequate and proper testing. The onus is on advertisers to prove that the representation is based on an adequate and proper test. The test must have been concluded before the representation is made and the data must be readily available upon request by the Bureau.”
Personal information.
Personal Information Protection and Electronic Documents Act (PIPEDA): “ … information about an identifiable individual, but does not include the name, title or business address or telephone number of an employee of an organization.”
Office of the Privacy Commissioner of Canada: “Privacy Commissioners and courts have expanded and refined the meaning of personal information to include many things, from the commonplace (name, address and income tax returns) to the more unusual (voiceprints and tracking information collected by GPS).”
Phishing.
Industry Canada, The Digital Economy in Canada: “Phishing is a technique which counterfeits existing legitimate web sites and businesses, in order to obtain credit card numbers, bank account information, social insurance numbers and passwords, directly leading to identity theft and fraud.”
Consumer Protection BC: “Brand spoofing (aka phishing) happens when scammers create false website or send consumers e-mails or text messages from what appear to be well-known and trusted businesses. When a consumer provides information to these fake sources, scammers gain access to private information such as SIN numbers or bank PIN numbers.”
CRTC: “This is a type of fraud in which a scammer attempts to impersonate a reputable person or organization, such as a bank or another enterprise with which you may have done business. The swindler sends a phony e-mail that may ask you to confirm details about your account or to supply other personal information by clicking on a bogus link.”
Competition Bureau, The Little Black Book of Scams (2012): “Phishing scams are all about tricking you into handing over your personal and banking details to scammers. The emails you receive might look and sound legitimate but in reality genuine organizations like a bank or a government authority will never expect you to send your personal information by an email or online. Scammers can easily copy the logo or even the entire website of a genuine organization. So don’t just assume an email you receive is legitimate. If the email is asking you to visit a website to ‘update’, ‘validate’ or ‘confirm’ your account information, be sceptical.”
Government of Canada, Get Cyper Safe: “Fake e-mails, text messages and websites created to look like they’re from authentic companies. They’re sent by criminals to steal personal and financial information from you. This is also known as ‘spoofing’.”
RCMP, E-mail Fraud / Phishing: “Phishing is a general term for e-mails, text messages and websites fabricated and sent by criminals and designed to look like they come from well-known and trusted businesses, financial institutions and government agencies in an attempt to collect personal, financial and sensitive information. It’s also known as brand spoofing.”
Government of Canada, Canadian Anti-Fraud Centre, “Financial Crime Trend Bulletin: Spear Phishing” (2013): “Phishing is a term for e-mails, websites or even text messages that are created and disseminated by fraudsters to ‘trick’ a person into supplying their personal information (usually user name and password). The intent is that you will think the communication is from your bank / credit union, a business (like an upgrading request from your Google / MSN / Yahoo security) or a government institution (i.e., Canada revenue Agency) and you will trust the communication to the extent that you supply personal data. Where a phishing email is disseminated to a random audience composed of as many email addresses collected as possible, a spear phishing email has a more selective audience. This time the fraudster has been able to collect some type of information identifying certain groups of people as having a common link. Perhaps a company has been hacked or it could be a collection of information done through the internet (Blogs / chat groups / social networking sites). The result is a selection of email addresses associated to a known commodity. It could be a bank, a company or even an educational facility. Generally there is a link in the email leading you to a very authentic looking website where you are asked to confirm or supply personal information. Because you are at the onset familiar with the company or organization you are not alarmed and the website is very official looking so you are less likely to see a red flag that should be there.”
PIPEDA.
The Personal Information Protection and Electronic Documents Act (or “PIPEDA”) is Canada’s federal privacy legislation, which governs how organizations may collect, use or disclose personal information about individuals during commercial activities. PIPEDA also, among other things, gives individuals the right to review and ask for corrections to information an organization may have collected about them.
Political advertising.
Advertising Standards Canada, The Canadian Code of Advertising Standards: “’advertising’ appearing at any time regarding a political figure, a political party, a political or government policy or issue, or an electoral candidate.”
Ponzi scheme.
Competition Bureau, The Little Black Book of Scams (2012): “Ponzi schemes are fraudulent investment operations that work in a similar way to pyramid schemes. The Ponzi scheme usually entices new and well-to-do investors by offering higher returns than other investments in the form of short-term returns that are either abnormally high or unusually consistent. The schemer usually interacts with all the investors directly, often persuading most of the existing participants to reinvest their money, thereby minimizing the need to bring in new participants as a pyramid scheme will do.”
RCMP, Investment and Securities Fraud: “This type of scheme is named after Charles Ponzi who became notorious for using the technique in early 1920. A Ponzi scheme is an investment fraud that promises high financial returns or dividends that are not available through traditional investments. Unknown to the investors, returns are paid from their own money or money paid by subsequent investors rather than from profit. This provides an appearance of legitimacy. In a Ponzi scheme, there is no legitimate investment. The scheme generally falls apart when either the operator flees with all of the proceeds, a sufficient number of new investors cannot be found to allow the continued payment of the promised returns, or the scheme is discovered by authorities. Two recent Ponzi schemes include the Earl Jones case in Montreal and Bernard Madoff in the USA. Another form of a Ponzi scheme is a called a Pyramid or Multi-Level Marketing Scheme. In this scheme, participants earn money not by the sale of any product but by recruiting new participants to pay money to join the program.”
Pop-up ad.
RCMP, Internet Security: “Pop-up ads are those small windows containing advertisements that literally pop up during your Internet sessions. In some cases, closing the window results in the repeated opening of one or more advertisement boxes. These boxes often are generated when you are surfing a commercial site, but they can also be launched by spyware. As a rule, these windows are perfectly harmless. However, most Web users find them annoying because they hamper their Web sessions. It is possible to reduce and even to eliminate these pop-up ads.”
Predictive Dialing Device (PDD).
CRTC Unsolicited Telecommunications Rules: “Any software, system, or device that automatically initiates outgoing telecommunications from a pre-determined list of telecommunications numbers.”
Premium blind network.
A mobile advertising network term.
Canadian Marketing Association (CMA), “The Truth about Mobile Ad Networks”: “Premium blind networks offer access to premium, mid-sized publisher applications. These networks, again, do not offer much feedback and insight about the publishers you are working with. Like the blind networks, premium blind networks are great for increasing the volume of exposure to your campaign – with the advantage of gaining access to moderately well-trafficked applications. Options of Cost-Per-Click (CPC) and Cost-Per-Install (CPI) are offered. Advertisers opting for this type of ad network should expect a combination of self-serve tracking tools as well as direct support and targeting options.”
Premium network.
A mobile advertising network term.
Canadian Marketing Association (CMA), “The Truth about Mobile Ad Networks”: “Premium mobile ad networks work with a smaller pool of strong, premium publisher applications. These applications garner much attention and are highly popular amongst mobile users, increasing the value of investing in utilizing premium networks for your campaign. Publishers utilizing premium ad networks are able to pay a premium price to secure prime ad spaces on top-tier sites. Publishers opting to use premium ad networks will enjoy a heavy emphasis of direct sales support.”
Prepackaged product.
Canadian Food Inspection Agency: “means any product that is packaged in a container in such a manner that it is ordinarily sold to or used or purchased by a consumer without being re-packaged.”
See also Consumer Packaging and Labelling Act.
Pretender invoice.
Consumer Protection BC, “Top Ten Scams 2013 – Just in case a scam is around the corner”: “The “pretender scheme” is when scammers send you an invoice or bill requesting payment for goods or services. These invoices may state that you are past the due date for payment and threaten that non-payment will affect your credit rating. The invoices are fake and are for goods or services you haven’t ordered or received. For example, you might be sent an invoice for a domain name that is very similar to your current domain name or for a small amount of stationery. The scammer hopes that you don’t notice the difference and just pay the invoice.”
Principal display surface.
Canadian Food Inspection Agency: “generally, it is that part of the container that is visible to the purchaser when the package is being displayed for the purpose of sale.”
See also Consumer Packaging and Labelling Regulations.
Principal display panel.
Canadian Food Inspection Agency: “generally means that part of a label applied to the principal display surface, which is the side or surface of a container that is displayed or visible under normal or customary conditions of sale or use.” Consumer Packaging and Labelling Regulations.
“Prize-promotion,” “gimme gift”, “cheap gift” or “prize pitch” scam.
Canadian Department of Justice, Report of the Canada – United States Working Group on Telemarketing Fraud (Updated December 1, 2011): “Telemarketers ‘guarantee’ that the victims have won valuable prizes or gifts, such as vacations or automobiles, but require victims to submit one or more payments for non-existent shipping, taxes, customs or bonding fees, or anything else the offender thinks plausible. Some schemes never provide their victims with any prize or gift, while others provide inexpensive items, often called ‘gimme gifts’ by U.S. telemarketers and ‘cheap gifts’ by Canadian telemarketers.”
Canadian Anti-Fraud Centre: “One of the most common scams is the “prize pitch”. Consumers are told they have been specially selected to win a prize, or have been awarded one of three or two of five prizes. These prizes usually include cash or a vehicle. You must purchase a product and pay in advance to receive your prize. These products may include “coin collections”, personalized pen sets, etc. The products are generally cheap or overpriced, but may sound valuable over the phone.”
RCMP, Prize Pitch (Lottery) Scams: “The classic prize pitch scam involves victims receiving notification by post, phone, or e-mail indicating they have won a prize (monetary or other valued item). However, in order to collect the prize the victim is required to pay various fees or taxes in advance. Victims either never hear from the organization again or receive further requests for money. If you have won a prize in Canada there are no fees or taxes to be paid.”
For more information about Canadian contest/sweepstakes law, see: Contests, Contests and CASL, Contest FAQs, Contest Tips and Contests and Social Media.
For information about the Canadian contest/sweepstakes precedents (template rules) and checklists that we offer for sale, see: Canadian Contest Forms/Precedents.
Promotional Contest.
Promotional contests in Canada are largely governed by the federal Competition Act (statutory disclosure and misleading advertising rules), federal Criminal Code (provisions governing “illegal lotteries” that must be avoided), federal and provincial privacy legislation (relating to the collection of entrant personal information), the common law of contract (contests have been held to be contracts) and intellectual property laws (e.g., relating to the transfer of original artistic materials, for example in skill contests, or reproduction of 3rd party logos, trade-marks or other intellectual property not owned by a contest organizer). In addition, Quebec has a separate regime governing contests, regulated by the Régie des alcools, des courses et des jeux.
With respect to the Competition Act, subsection 74.06 makes it a reviewable (i.e., civil) matter, subject to civil penalties, to operate a contest without certain required disclosure, to unduly delay the award of prizes and also governs the selection of participants and distribution of prizes:
“A person engages in reviewable conduct who, for the purpose of promoting, directly or indirectly, the supply or use of a product, or for the purpose of promoting, directly or indirectly, any business interest, conducts any contest, lottery, game of chance or skill, or mixed chance and skill, or otherwise disposes of any product or other benefit by any mode of chance, skill or mixed chance and skill whatever, where: (a) adequate and fair disclosure is not made of the number and approximate value of the prizes, of the area or areas to which they relate and of any fact within the knowledge of the person that affects materially the chances of winning; (b) distribution of the prizes is unduly delayed; or (c) selection of participants or distribution of prizes is not made on the basis of skill or on a random basis in any area to which prizes have been allocated.”
For more information about Canadian contest/sweepstakes law, see: Contests, Contests and CASL, Contest FAQs, Contest Tips and Contests and Social Media.
For information about the Canadian contest/sweepstakes precedents (template rules) and checklists that we offer for sale, see: Canadian Contest Forms/Precedents.
Publisher’s defence.
Competition Bureau, Application of the Competition Act to Representations on the Internet: “For reviewable conduct under sections 74.01 to 74.06 of the Act [the civil misleading advertising and promotional contest provisions of the Competition Act], a defence is found in subsection 74.07(1) for a person who merely ‘prints or publishes or otherwise disseminates a representation, including an advertisement, on behalf of another person in Canada’, so long as certain conditions are met. This exception is sometimes referred to as the ‘publisher’s defence’ but, provided its conditions are met, it applies to any person who merely disseminates or distributes a false or misleading representation. In other words, it is available to any person who does not have decision-making authority or control over the content. The required conditions which must be met under this exception are: the disseminating person accepted the representation for dissemination in good faith and in the ordinary course of its business; and the person on whose behalf the representation is being made is in Canada, and the disseminating party recorded its name and address. The Bureau will focus its enforcement efforts primarily on businesses which are responsible for content or have a degree of control over that content, rather than on businesses operating as a conduit, that is, a disseminator or distributor of the content.”
Puffery.
Australian Competition & Consumer Commission: “Puffery is a term used to describe wildly exaggerated, fanciful or vague claims for a product or service that nobody could possibly treat seriously, and that nobody could reasonably be misled by. Examples of puffery include ‘best food in town’ or ‘freshest taste ever.’”
Pyramid selling.
Competition Bureau, Truth in Advertising, Pyramid Selling: “A scheme of pyramid selling is illegal under the Competition Act. It is a multi-level marketing plan that includes either compensation for recruitment, required purchases as a condition of participation, inventory loading, or the lack of a buy-back guarantee on reasonable commercial terms.”
“Sections 55 and 55.1 of the Competition Act are criminal provisions addressing multi-level marketing and pyramid selling. Section 55 prohibits operators or participants in a multi-level marketing plan from making representations relating to compensation without fair, reasonable and timely disclosure of the amount of compensation received or likely to be received by typical participants in the plan. Section 55.1 of the Act provides that a multi-level marketing plan that includes either compensation for recruitment, required purchases as a condition of participation, inventory loading, or the lack of a buy-back guarantee on reasonable commercial terms, constitutes a prohibited “scheme of pyramid selling. Any person who contravenes section 55 or 55.1 is guilty of an offence and liable to a fine of up to $200,000 and/or imprisonment up to one year on summary conviction, or to fines in the discretion of the court and/or imprisonment up to five years upon indictment.”
Competition Bureau, The Little Black Book of Scams (2012): “In a typical pyramid scheme, unsuspecting investors are encouraged to pay large membership fees to participate in moneymaking ventures. The only way for you to ever recover any money is to convince other people to join and to part with their money as well. People are often persuaded to join by family members or friends. But there is no guarantee that you will recoup your initial investment. Although pyramid schemes are often cleverly disguised, they make money by recruiting people rather than by selling a legitimate product or providing a service. Pyramid schemes inevitably collapse and you will lose your money. In Canada, it is a crime to promote a pyramid scheme or even to participate in one.”
Competition Bureau, Enforcement Guidelines, Multi-level Marketing Plans and Schemes of Pyramid Selling: “Section 55.1 of the Act defines a “scheme of pyramid selling” as an MLM plan with one or more of the following features: requires a payment for the right to receive compensation for recruiting others into the MLM plan (compensation for recruitment); requires purchases as a condition of participation (purchase requirement), other than a specified amount of product at the seller’s cost for the purpose of facilitating sales; includes inventory loading; or lacks a buy-back guarantee on reasonable commercial terms or participants are not informed about the guarantee. It is a criminal offense to establish, operate, advertise or promote a scheme of pyramid selling.”
Canadian Consumer Handbook: “Multi-level marketing (MLM) is a system for selling products in which participants get paid for selling products to other participants who, in turn, are paid for selling the same products to yet more participants. This type of marketing is legal in Canada when the plan does not contravene the Competition Act. Referral selling, matrix marketing and binary systems are all similar types of multi-level marketing plans, though some may be illegal under the Criminal Code, the Competition Act and some provincial and territorial laws. Under the Competition Act, MLM plans that make claims about potential compensation must also disclose the amount of compensation typical participants in the plan earn. Pyramid selling is an MLM plan that incorporates the following deceptive practices, which make it a criminal offence under the Competition Act: participants pay money for the right to receive compensation for recruiting new participants; a participant is required to buy a specific quantity of products, other than at cost price for the purpose of advertising as a condition of participation; selling unreasonable amounts of inventory to participants; having an unreasonable product return policy. Pyramid selling is also a criminal offence under the Criminal Code.”
Federal Government, Consumer Information website (www.consumerinformation.ca): “Multi-level marketing is a system for selling products whereby participants are paid for selling products to other participants who, in turn, are paid for selling the same products to yet more participants. This type of marketing must comply with the Competition Act. Pyramid selling is a type of multi-level marketing that is a criminal offence under the Competition Act due to the following deceptive practices: paying money to those who recruit new members (who also pay money for the same right); requiring new recruits to buy products as a condition of participation; selling unreasonable amounts of inventory to participants; and having an unreasonable product return policy. Pyramid selling is also a criminal offence under the Criminal Code of Canada.”
Halsbury’s Laws of Canada, 1st ed.: “Pyramid selling is a type of multi-level marketing plan where participants pay for the right to receive compensation from the recruitment of other participants into the plan. Those recruits also pay, in turn, for the right to receive compensation from the recruitment of further participants. It also includes schemes where, as a condition of participating in the scheme, a participant must purchase commercially unreasonable amounts of a product. The establishment, operation, advertisement or promotion of a pyramid selling scheme is prohibited.”
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SERVICES AND CONTACT
We are a Toronto based competition and advertising law firm offering business and individual clients efficient and strategic advice in relation to competition/antitrust, advertising, Internet and new media law and contest law. We also offer competition and regulatory law compliance, education and policy services to companies, trade and professional associations and government agencies.
Our experience includes advising clients in Toronto, Canada and the United States on the application of Canadian competition and regulatory laws and we have worked on hundreds of domestic and cross-border competition, advertising and marketing, promotional contest (sweepstakes), conspiracy (cartel), abuse of dominance, compliance, refusal to deal and pricing and distribution matters. For more information about our competition and advertising law services see: competition law services.
To contact us about a potential legal matter, see: contact
For more information about our firm, visit our website: Competitionlawyer.ca
September 29, 2009
Earlier this year, sweeping amendments were made to the federal Competition Act (the “Act”). The recent amendments were the most significant in twenty-five years. While most of the changes are now in effect, some of the changes, including to the criminal conspiracy provisions, will come into effect early next year in March.
Online Behavioural Advertising.
One form of Internet advertising.
Office of the Privacy Commissioner of Canada, Policy Position on Online Behavioural Advertising: “In this case, an advertising service places an advertisement on a webpage based on tracking data collected across multiple unrelated websites. This practice refers to using information about where a user has been. For example if a user has visited websites about pets in the past, then ads related to pets might be shown on various web sites, even sites that are not related to pets (e.g., an online newspaper).”
Online romance scam.
Consumer Protection BC, “Top Ten Scams 2013 – Just in case a scam is around the corner”: “You meet the person virtually through a social networking or dating site. Your online romance scammer builds a relationship, sometimes spending several months in building a rapport online with the intention of making you feel that you are in a romantic relationship. The person you met online turns out to be criminal who typically says that they are in a far away country and that they eventually want to meet the victim in person. Around this time, the criminal will note that they can’t afford to travel and will seek assistance from you in covering travel costs. Sometimes there’s an emergency, a sick family member for example, and that they need financial help from you to visit the sick individual. Of course, the requests for help are all a scam and the money wired by the victim, often in very large amounts, is now in the hands of the criminal.”
Open loop gift card.
Financial Consumer Agency of Canada: “There are two main types of prepaid cards. Both require you to pay up front to ‘load’ money on to a card for later use and both are sometimes referred to as ‘gift cards’. Prepaid cards from retailers can only be used at a single store or group of stores, such as a chain or shopping mall. Other prepaid cards, usually branded with a payment card network operator’s logo, such as American Express, MasterCard or Visa, can be used at most merchants that display the specific network’s logo.”
Datacard Group: “A gift card is a type of stored-value payment card commonly issued by retailers and banks. Gift cards are preloaded with a set value. There are two major types of cards – those that can be used only at one store chain or one location (closed loop) and those that can be used anywhere (open loop). Closed loop gift cards generally carry no fees or expiration date – the issuing store makes its money off the profit from selling merchandise. Open loop gift cards always carry fees. Because they are issued by banks or credit card transaction processors, such as Visa or MasterCard, fees are the only way they can profitably issue gift cards.”
Ontario Consumer Protection Act Regulations: “’Open loop gift card agreement’ means a gift card agreement that entitles the holder of a gift card to apply it towards purchasing goods or services from multiple unaffiliated sellers.”
Ordinary selling price claims.
Competition Bureau, Misleading Advertising and Labelling: “The false or misleading ordinary selling price provisions of the Competition Act are designed to ensure that when products are promoted at sale prices, consumers are not misled by reference to inflated regular prices. The Act prohibits false or misleading representations to the public as to the ordinary selling price of a product, in any form whatsoever. Ordinary selling price is validated in one two ways: either a substantial volume of the product was sold at that price or higher, within a reasonable amount of time (volume test); or the product was offered for sale, in good faith, for a substantial period of time at that price or a higher price (time test).”
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SERVICES AND CONTACT
We are a Toronto based competition and advertising law firm offering business and individual clients efficient and strategic advice in relation to competition/antitrust, advertising, Internet and new media law and contest law. We also offer competition and regulatory law compliance, education and policy services to companies, trade and professional associations and government agencies.
Our experience includes advising clients in Toronto, Canada and the United States on the application of Canadian competition and regulatory laws and we have worked on hundreds of domestic and cross-border competition, advertising and marketing, promotional contest (sweepstakes), conspiracy (cartel), abuse of dominance, compliance, refusal to deal and pricing and distribution matters. For more information about our competition and advertising law services see: competition law services.
To contact us about a potential legal matter, see: contact
For more information about our firm, visit our website: Competitionlawyer.ca
“Native advertising” or “sponsored content”. U.S. Federal Trade Commission: “The practice of blending advertisements with news, entertainment, and other content in digital media.”
Nigerian scam (aka 419 scam, West African scam or advance fee fraud)
Competition Bureau, The Little Black Book of Scams (2012): “The Nigerian scam (also called the 419 fraud) has been on the rise since the early-to-mid 1990s in Canada. Although many of these sorts of scams originated in Nigeria, similar scams have been started all over the world (particularly in other parts of West Africa and in Asia). These scams are increasingly referred to as ‘advance fee fraud’. In the classic Nigerian scam, you receive an email or letter from a scammer asking your help to transfer a large amount of money overseas. You are then offered a share of the money if you agree to give them your bank account details to help with the transfer. They will then ask you to pay all kinds of taxes and fees before you can receive your ‘reward’. You will never be sent any of the money, and will lose the fees you paid.”
RCMP, Internet Security: “Fraud letters from Nigeria (and other African countries) is a type of scam that has been around for a number of years. Businesses, educational institutions and government departments were originally the prime targets of electronic messages bearing the promise of substantial amounts of money from alleged government or company officials in Nigeria. The general public is now also targeted, and thousands of people like you receive similar e-mail messages in their personal mail boxes. In some cases, con artists even send stolen or forged cheques to their victims. This scam can also be done by phone and from many countries. In addition to money you can be asked for confidential information against the promise of profits.”
Joewein.de LLC: “The so-called ‘419’ scam (aka ‘Nigeria scam’ or ‘West African’ scam) is a type of fraud named after an article of the Nigerian penal code under which it is prosecuted. It is also known as ‘Advance Fee Fraud’ because the common principle of all the scam format is to get the victim to send cash (or other items of value) upfront by promising them a large amount of money that they would receive later if they cooperate. In almost all cases, the criminals receive money using Western Union and MoneyGram, instant wire transfer services with which the recipient can’t be traced once the money has been picked up. These services should never be used with people you only know by email or telephone! Typically, victims of the scam are promised a lottery win or a large sum of money sitting in a bank account or in a deposit box at a security company. Often the storyline involves a family member of a former member of government of an African country, a ministerial official, an orphan or widow of a rich businessman, etc. Variants of the plot involving the Philippines, Taiwan, China, Hong Kong, Korea, Iraq, Kuwait, UAE, Mauritius, etc. are also known. Some emails include pictures of boxes stuffed with dollar bills, scans of fake passports, bank or government documents and pictures of supposedly the sender.”
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SERVICES AND CONTACT
We are a Toronto based competition and advertising law firm offering business and individual clients efficient and strategic advice in relation to competition/antitrust, advertising, Internet and new media law and contest law. We also offer competition and regulatory law compliance, education and policy services to companies, trade and professional associations and government agencies.
Our experience includes advising clients in Toronto, Canada and the United States on the application of Canadian competition and regulatory laws and we have worked on hundreds of domestic and cross-border competition, advertising and marketing, promotional contest (sweepstakes), conspiracy (cartel), abuse of dominance, compliance, refusal to deal and pricing and distribution matters. For more information about our competition and advertising law services see: competition law services.
To contact us about a potential legal matter, see: contact
For more information about our firm, visit our website: Competitionlawyer.ca
September 17, 2009
ASSOCIATIONS & COMPETITION LAW
“A [compliance] program also plays a crucial role for trade associations because trade associations face unique compliance issues. Given that an association provides a forum where competitors collaborate on association activities, trade associations are exposed to greater risks of anti-competitive conduct. A number of past Bureau cases have involved trade associations that were engaged in agreements to harm competition. It is therefore critical that trade associations implement credible and effective programs with strict codes of ethics and conduct. Such programs may allow trade associations and [their] members to avoid improper actions and to protect themselves from being used as a conduit for illegal activities. They may also allow trade association members to fully benefit from the association’s activities while reducing the potential for inadvertent contraventions of the Acts.”
(Competition Bureau, Corporate Compliance Programs Information Bulletin)
Templates/precedents and checklists to run promotional contests in Canada
Templates/precedents and checklists to comply with Canadian anti-spam law (CASL)
