“Therefore, the argument against Google collapses to the following nonsensical proposition: Google is sacrificing a monopoly profit in general search to gain market share in a more competitive market. This strategy is economic nonsense because it would lower Google’s total profits. In addition, as Google reduces its share in general search, it will reduce its ability to direct consumers to its specialized search products. That behavior is not likely to be profitable. Ultimately, the notion that Google is manipulating general search results to expand its market share in specialized search45 is not plausible. For Google, this practice would entail great risk and little reward. There is no reason to believe that Google is doing anything beyond competing in the search market.”
“The Chicago School of law and economics teaches—and the Supreme Court has long affirmed—that antitrust law exists to protect consumers, not competitors. Penalizing Google’s practices as anticompetitive would violate that principle, reduce dynamic competition in search, and harm the consumers that the antitrust laws are intended to protect.”
I have been updating my Canadian advertising and marketing law blog a bit recently, and have added a short overview of the Competition Bureau’s views about consumer rebate programs in Canada. As such, I thought this would be a good opportunity to post a short note on consumer rebates in Canada.
In September, 2009, the Competition Bureau issued Enforcement Guidelines on Consumer Rebate Promotions (the “Rebate Guidelines”). The Rebate Guidelines, which originated, in part, from the Bureau’s concern with the use of deceptive mail-in rebates (see e.g.: here), set out the Bureau’s approach to interpreting the false or misleading representations provisions of the Competition Act, Consumer Packaging and Labelling Act and Textile Labelling Act in the area of consumer rebate promotions. The Guidelines define consumer rebates as:
“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.”
The Rebate Guidelines set out five examples of when consumer rebate promotions may violate the criminal or civil misleading advertising provisions of the Competition Act (sections 52 or 74.01) as follows:
1. Inadequate disclosure of rebate conditions, limitations or exclusions.
2. Rebates disguised as the sale price or regular price.
3. Mail-in rebates disguised as instant rebates (i.e., available at the time of purchase).
In a curious pleading filed in the British Columbia Supreme Court, a Sunshine Coast British Columbia plaintiff has commenced a punitive damages class action against Google for allegedly violating Canadian privacy, misleading advertising, criminal, intellectual property and tort laws in relation to its Gmail webmail service. The thrust of the dispute appears to be centered around allegations that Google intercepted and used information from e-mails sent from non-Gmail users to Gmail accounts for advertising.
With respect to privacy, the plaintiff alleges that Google intercepted, copied, scanned, retained and used private communications sent from non-Gmail users to Gmail accounts to generate free information used for advertising services, committing the tort of invasion of privacy under the British Columbia Privacy Act and at common law.
As for competition law, the plaintiff also argues that Google violated the criminal misleading advertising provision (section 52) of the federal Competition Act (misleading advertising under the Competition Act can be enforced as either a criminal or civil matter under sections 52 or 74.01). The plaintiff’s misleading advertising claim is slightly unclear, but he appears to allege that Google failed to disclose its data collection activities (i.e., interception, copying, scanning and use of private communications), its false or misleading representations were made intentionally (i.e., knowingly or recklessly), they were made to advance its business interests and caused the plaintiff (and other class members) damages.
In an interesting case earlier this week, the CRTC announced that it had taken enforcement action against two India-based firms for breaching Canadian telemarketing laws under the National Do Not Call List (DNCL).
The CRTC ordered Pecon Software Ltd. and Avaneesh Software Private Limited to stop their current telemarketing practices and pay $507,000 in penalties. A parallel investigation in the United States by the Federal Trade Commission (FTC) has targeted 14 corporate defendants and 17 individuals in 6 legal filings (Pecon Software Ltd., Finmaestros LLC, Zeal IT Solutions Pvt. Ltd., Virtual PC Solutions, Lakshmi Infosoul Services Pvt. Ltd. and PCCare247 Inc., as well as a number of individual defendants).
According to the CRTC, in this scam dubbed the “Microsoft imposter” scam, telemarketers from the Indian firms would typically warn consumers that their personal computers were infected with viruses attempting to sell anti-virus software or technical support. The telemarketers allegedly claimed they were affiliated with legitimate companies, including Microsoft, Dell, McAfee and Norton, telling consumers that they had detected malware that posed an imminent threat to their computers, falsely demonstrating an infection then offering to remove the malware for fees that ranged from $49 to $450.
In making the announcement, the CRTC said:
“Foreign-based telemarketers have been put on notice that they must comply with our rules when calling Canadians,” said Andrea Rosen, the CRTC’s Chief Compliance and Enforcement Officer. “Canadians who receive these types of unsolicited calls are encouraged to file a complaint and should never give an unsolicited caller access to their computers or personal information.”
International Cooperation
According to the CRTC, it also conducted inspections as part of its investigation and worked with other international agencies including the U.S. Federal Trade Commission (see: FTC Halts Massive Tech Support Scams) and Australian Communications and Media Authority (ACMA) (see: Global action busts scammers posing as Microsoft).
The ACMA said that this scam, which targeted consumers in Canada, the United States, Australia, Ireland, New Zealand and the U.K., generated almost 10,000 calls to its Do Not Call complaint line over the past two years (and at its peak representing about 50% of all complaints it received). The FTC obtained court orders to stop six alleged tech support scams and has frozen the target firms’ assets.
The enforcement agencies involved in this case are also saying that, in an attempt to avoid detection, the telemarketers used some 80 different domain names and 130 phone numbers.
Regulation of Telemarketing in Canada
Canada’s DNCL is part of the CRTC’s Unsolicited Telecommunications Rules, which include the Telemarketing Rules, DNCL Rules and Automatic Dialing and Announcing Device Rules.
Ok I concede that lawyers are great at making (or at least trying) to make their clients and others believe that the sky is falling, so that you better retain them to advise you or else the world (and their businesses) will surely end. We have all heard many, many warnings by surely very smart, but possibly self-interested counsel, of the risks of not doing X, Y or Z.
Having said that, I came across a rather good recently published note today by David Balto talking about the “Dozen Times to Call Your Antitrust Lawyer” [subtitle: competition/antitrust and IP law issues to watch out for – my phrase]. While clearly also a call to drum up business, this note I thought was really rather good.
The University of British Columbia today announced the launch of “one of the world’s largest prizes dedicated to the international fight against corruption and protecting human rights”: The Allard Prize for International Integrity:
In a development earlier today that I can only describe as astonishing, the Calgary Herald, Victoria Times Colonist, Montreal Gazette and others are reporting that the personal residence and city hall offices of the mayor of Laval, Quebec’s third largest municipality, were raided by dozens of police officers in relation to allegations in Quebec that members of the Quebec construction industry have been involved in a variety of corruption, bribery and bid-rigging offences for municipal and provincial construction contracts.
For more see: Anti-corruption squad raids home, office of Laval mayor, Anti-corruption squad raiding Laval city hall, Police raids at home, office of mayor in Montreal-area Laval.
While none of the allegations in the ongoing Quebec inquiry have been proven, and subsequent investigations may continue for some months or years, the following is a short overview of Canada’s bid-rigging and cartel (i.e., conspiracy) laws.
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BID-RIGGING
Canada has a standalone bid-rigging provision under section 47 of the Competition Act (the “Act”) (unlike some other major jurisdictions, where bid-rigging falls under general conspiracy or cartel offences).
Section 47 makes it a criminal offence to: (i) agree to not submit a bid or tender, (ii) agree to withdraw a bid or tender already submitted (recently added to the Act as a result of the 2009 amendments) or (iii) submit a bid or tender that is arrived at by agreement.
In Canada bid-rigging is ”per se” illegal, in that no anti-competitive effects on a relevant market (or markets) need to be established in order to make out an offence (though all of the elements need to be established on the standard criminal burden of proof – i.e., beyond a reasonable doubt).
COMMON TYPES OF BID-RIGGING
Some common types of bid-rigging that can contravene the criminal bid-rigging provisions of the Act include:
“Cover”, “courtesy” or “complementary” bidding. Some firms submit bids that are too high to be accepted, or with terms that are unacceptable to the party calling for bids, to protect an agreed upon low bidder.
Our friends at the A38 Journal of International Law have issued a call for papers. From A38:
The A38 Journal of International Law (ISSN 2277-9361) is a quarterly academic journal, published online, that seeks to provide an international forum for the publication of articles in the field of International Law. The Journal is currently soliciting submissions for Volume I, Issue 4, which will be published January 2013. The submission deadline for Issue 4 is November 30, 2012. We welcome submissions from academicians, practitioners, students, researchers and experts from within the legal community. We have a strong preference for articles that assert and defend a well-reasoned position. Issue 4 will be devoted to “Diplomatic and Consular Immunities, Privileges and Protection under International Law”.
Templates/precedents and checklists to run promotional contests in Canada
Templates/precedents and checklists to comply with Canadian anti-spam law (CASL)
