November 16, 2012
The following are some of the more interesting competition, advertising and regulatory law developments that caught my eye over the past several days, at least to the extent they have a bearing on Canada or companies doing business in Canada:
BCE and Astral plan to work towards reworking their deal to obtain regulatory clearance (see: here and here), following a rejection of the deal by the federal CRTC.
The Malaysian state-owned oil company Petronas was reported to be revising undertakings to obtain Investment Canada Act clearance for its acquisition of Progress Energy (see: here).
The CRTC launched new web pages for their planned mandatory wireless code consultations that include the “top 100 liked” comments for a new wireless code (see: here).
Earlier today, Canada’s Finance Minister gave some further indications that the Federal Government may soon reveal new Investment Canada Act rules for FDI in Canada and that the new rules may include “limits” (see: here). Any such rules would replace and/or supplement existing Investment Canada Act provisions and guidelines under the ICA (e.g., those specifically relating to national security or state-owned-enterprises).
More testimony unfolded in the ongoing Quebec corruption and competition law probe relating to allegations of municipal bribes and bid-rigging in the construction sector in Quebec (Monique Muise at the Gazette in Montreal has the best feed going on this, plus she has a sense of humour and, if I may say, classic Quebecois ability to take things in stride – see: here).
November 16, 2012
I did a bit of a quick sweep earlier today for new Canadian competition, advertising and regulatory law texts and this one, recently published by Oxford University Press, caught my eye on class action regimes around the world including Canada. Given the accelerating rate of class action activity in Canada, including in the competition and advertising law areas, I thought this was a worthy hole to fill (and to keep filling).
Abstract:
“World Class Actions: A Guide to Group and Representative Actions around the Globe is a guide for attorneys and their clients on the procedures available for class, group, and representative actions throughout the world. It helps lawyers navigate and develop strategies for litigation and risk management in the course of doing business abroad, or even in doing business locally in a way that impacts interests abroad.
Part I of the book provides a jurisdiction-by-jurisdiction survey of the class action, group, collective, derivative, and other representative action procedures available across the globe. Each chapter is written from a local perspective, by an attorney familiar with the laws, best practices, legal climate, and culture of the jurisdiction.
Part II provides guidance from the perspective of international attorneys practicing in foreign jurisdictions and the art of counseling and representing clients in international litigation. It also covers a variety of topics related to transnational, multi-jurisdictional, and class or collective actions that involve international issues and interests.
Each chapter offers practice tips and cultural insights helpful to an attorney or litigant facing a dispute in a particular part of the world. Many of the chapters introduce key books, treatises, articles, or other reference materials to foster further research. Its focus on international class and group litigation law from a practitioner’s perspective makes World Class Actions an essential guide for the lawyer or client.”
Jurisdictions included in this new global class action text include Canada, as well as the U.S., Australia, a number of major European jurisdictions, China, India and the Asia-Pacific region.
For more information see: World Class Actions: A Guide to Group and Representative Actions Around the Globe.
__________________
For more information about our regulatory services contact us: contact
For more regulatory law updates follow us on Twitter: @CanadaAttorney
November 14, 2012
CANADIAN CONTEST RULES/PRECEDENTS
Do you need contest rules and forms for a Canadian contest/sweepstakes? I offer a selection of Canadian contest rules and forms for random draw, skill and other common types of Canadian contests (i.e., contest precedents and forms). For more information see Canadian Contest Forms/Precedents.
____________________
In what I think was the most tragic legal story I saw today – in terms of human nature and near financial gain (but not quite) though not perhaps true human tragedy – the Montreal Gazette reported that a Quebec court has denied a lottery player’s claim to a $27 million jackpot – for a seven second delay in buying his ticket.
November 14, 2012
When companies think about competition law compliance, the focus is often on senior management and board compliance – that is, ensuring that the board, and a firm’s directors and officers, have a clear understanding of competition law rules. That is not to say that it is not well known that managers, and in particular a company’s sales force, are often at the center of competition/antitrust issues. Practically, however, companies often approach compliance from the top down with an expectation that senior management will disseminate the compliance message down through an organization. Sometimes that is the case. In more cases, however, it seems that it is not – as is evidenced by the Competition Bureau’s perennial complaint that many companies have compliance programs, but fail to effectively implement them.
In this regard, a recent U.K. paper caught my eye on the role of marketing managers in global cartels entitled “The Role of Sales and Marketing Managers Within International Cartels” (J.K. Ashton & A.D. Pressey).
This study looked at 56 major international cartels investigated by the European Union with findings that include the fact that marketing and sales managers have been involved in a substantial percentage of cartels (42.9%), are seldom the most senior managers, tended to involve global cartels (in manufacturing more than distribution industries) and involved information exchanges in the context of predominantly market allocation and price-fixing arrangements.
Interestingly, this study also looks at some of the strategies cartels have used to avoid detection (including minimizing meetings, punishing “cheating” and more levels of organizational hierarchy – i.e., buffers between marketing personnel and senior management), marketing managers’ involvement in trade associations and statistics of U.S. incarceration of foreign nationals and the reliance of whistle blowers in investigations.
Abstract:
“Although the study of international cartels has a considerable lineage our understanding of their organization, operation and management remains limited. This study attends to this omission through examining the role of marketing and sales managers within international cartels using a content analysis of 56 major international price-fixing cartels over two decades (1990-2009). It is reported that marketing and sales managers are demonstrably involved in many international cartels (42.9% of all cartel cases), albeit often accompanied by more senior managers from other firm functions. Marketing and sales managers appear most frequently within worldwide and manufacturing industry cartels and where market allocation and customer-sharing practices occur. In light of these findings it is important to reassess both managerial attitudes towards inter-firm collaborations and enhance the position of antitrust concerns within business school syllabi.”
For a copy of the paper see: Who Manages Cartels? The Role of Sales and Marketing Managers within International Cartels.
__________________
For more information about our regulatory services contact us: contact
For more regulatory law updates follow us on Twitter: @CanadaAttorney
November 13, 2012
I have been meaning to reach out [by taking a break from rather more mundane, i.e., billable, work] to Competition Policy International (CPI) for including us again in their Blog o’ Blogs (for October 2012). But, for credit where it is due, my post was praise for what I thought at the time was a very good note by David Balto on the “Dozen Times to Call Your Antitrust Lawyer” (here is a link to Mr. Balto’s very good note: “A Dozen Times to Call Your Antitrust Lawyer”). When I read his note I thought it a rather fine discussion of the intersection of IP and antitrust/competition issues, and still do. In any event, thanks again to CPI, one of the leading competition/antitrust sites. For daily competition law and policy updates from around the world (which you can have delivered to your inbox) visit their site.
November 13, 2012
Earlier today, the CRTC announced that it has launched its online discussion for consultations for the new consumer wireless code of conduct. In making the announcement, the CRTC’s Chairman Jean-Pierre Blais said:
“’We encourage Canadians to join the online discussion and have their say on how wireless contracts could be clearer and easier to understand. … By sharing their views, Canadians can help us shape a clear list of terms and conditions that wireless companies will need to include in their contracts.’ The CRTC recently examined the wireless market and found that contracts were a source of significant concern for many Canadians. Once completed, the code will help Canadians better understand their rights and their wireless company’s responsibilities, and allow them to make informed decisions in a competitive marketplace.”
The CRTC’s new online discussion, which will be open until December 4th, will allow Canadians to give their views on what they think should be in the new mandatory wireless code, how wireless related complaints should be resolved and promotion and enforcement of the code.
The CRTC first announced that it was launching new public consultations for a mandatory wireless code of conduct on October 11th (see: here and here) to formulate guidelines for wireless contracts and reduce potential misleading advertising related issues.
In its initial announcement in early October, the CRTC set out the following general elements it is considering addressing in the new wireless code: clarity of contract terms and conditions; changes to contract terms and conditions; contract cancellation, expiration and renewal; clarity of advertised prices; application of the code to bundles of telecommunications services; notification of additional fees; privacy policies; hardware warranties and related issues; loss or theft of hardware; security deposits; and disconnections.
This online discussion will be followed by another in early 2013 (from January 28 to February 1, 2013).
__________________
For more information about our regulatory services contact us: contact
For more regulatory law updates follow us on Twitter: @CanadaAttorney
November 13, 2012
Given the ongoing testimony at the Charbonneau Commission in Montreal, which has included allegations of bid-rigging among Quebec construction firms, I thought I would post a short overview of bid-rigging under the Competition Act – a sort of “bid-rigging 101” list of FAQs. While much of this will likely be intuitive to most, Canadian bid-rigging law has a number of interesting aspects (and, like criminal cartels, can be very difficult for tendering authorities to detect).
What is bid rigging?
Unlike some jurisdictions, notably the U.S., Canada has a standalone bid-rigging offence, or to be more accurate related offences. Under section 47 of the federal Competition Act it is a criminal offence to:
1. Agree to not submit a bid or tender;
2. Agree to withdraw a bid or tender already made (an offence recently added to the Competition Act as a result of amendments in 2009); or
3. Submit a bid or tender arrived at by agreement.
In essence, the Competition Act prohibits most types of agreements or arrangements between competing bidders or tenderers (though there is one key exception).
Is it necessary to prove
anti-competitive effects on a market?
No. In Canada bid-rigging is referred to as a ”per se” offence, in that no anti-competitive effects need to be proven to make out an offence – in other words, the offence lies in the agreement to not submit a bid, withdraw a bid already made or submit bids arrived at by agreement.
Like the other criminal offences in the Competition Act, however, and criminal offences generally in Canada, it is necessary to prove all elements under section 47 on the criminal burden of proof (i.e., beyond a reasonable doubt).
What are some common types of bid-rigging
(i.e., ways parties attempt to avoid detection)?
Like criminal cartel (i.e., conspiracy) agreements, bid-rigging agreements are often structured in a handful of key ways to avoid detection. These include:
1. “Cover”, “courtesy” or “complementary” bidding: Some firms submit bids that are too high to be accepted (or with terms that are unacceptable to the tendering authority) to protect an agreed upon low bidder.
2. Bid suppression: One or more bidders that would otherwise bid or tender agree to refrain from bidding (or withdraw a previously made bid).
3. Bid rotation: All parties submit bids but take turns being the low bidder according to a systematic or rotating basis.
4. Market division: Suppliers agree not to compete in designated geographic areas or for specified customers.
5. Subcontracting: Parties that agree not to submit a bid (or submit a losing bid) are awarded subcontracts or supply agreements from the successful low bidder.
The above types of bid-rigging arrangements are typically intended to achieve several goals, including keeping the bid-rigging arrangement secret and dividing contracts/markets among the parties.
What must be proven to establish
an illegal bid-rigging agreement?
To establish an illegal bid-rigging agreement under section 47 of the Competition Act, all of the following elements must be established:
1. An agreement or arrangement between two or more persons (or bidders or tenderers as the case may be).
Like section 45 of the Competition Act (criminal conspiracy agreements), an agreement is an essential element to establish a bid-rigging offence under section 47. Also like the criminal conspiracy provisions, Canadian courts have held this element to require a “consensus of minds” or “mutual understanding” between the parties.
Mere consultations between parties bidding in relation to pricing, where there has been no agreement or arrangement between the parties and their respective bids are not communicated to the other before tenders are submitted, has been held not to contravene section 47.
November 12, 2012
The Antitrust Law Section of the American Bar Association has published a new issue of its Antitrust Law Journal that includes contributions on the U.S. Supreme Court’s new approach to implied antitrust immunity; antitrust and innovation; antitrust, innovation and product design in platform markets; the Google books settlement; and the rule of reason and goals of antitrust. For a copy of the new issue see: Antitrust Law Journal.
Templates/precedents and checklists to run promotional contests in Canada
Templates/precedents and checklists to comply with Canadian anti-spam law (CASL)
