Avis and Budget reach settlement in alleged misrepresentation of fees and discounts

Vanessa Leung and Ashley Piotrowski

On June 2, 2016, the Competition Bureau reached a consent agreement with Aviscar Inc. and Budgetcar Inc. / Budgetauto Inc., over allegations of false or misleading advertising for prices and discounts on car rentals and associated products.  A Bureau investigation concluded that certain prices and discounts initially advertised were not attainable because consumers were charged additional mandatory fees that were only disclosed later when making a reservation. Pursuant to the consent agreement, the parties will pay a $3 million administrative monetary penalty, as well as $250,000 towards the Bureau’s investigative costs.  The parties have also agreed to implement a compliance program.

Background

In March 2015, the Bureau filed an application against the Aviscar Inc. and Budgetcar Inc. / Budgetauto Inc., alleging that the parties had made false or misleading representations to the public to promote the use of their rental cars and associated products, and that the parties had supplied their rental cars and associated products at a higher price than was advertised to consumer. The representations were made across a broad range of media including print, website, mobile applications, television commercials and electronic messages.

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CRTC partners with global agencies to enforce spam and telemarketing rules

David Elder - 

The Canadian Radio-television and Telecommunications Commission (CRTC) has announced that it has signed a memorandum of understanding with 10 domestic and global enforcement agencies to aid in the enforcement of spam and telemarketing laws.  However, while the announcement is certainly a step in the right direction, many of the countries that produce the most spam were not at the table.

The agreement is intended to promote cooperation between the various enforcement agencies, and includes commitments by each signatory to share information and intelligence regarding unsolicited communications, where permitted by the laws of its jurisdiction.  

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Competition Tribunal renders a decision in the Toronto Real Estate Board case

Ashley Piotrowski

After five years of back and forth at various levels of court, the Competition Tribunal has rendered a decision in the Toronto Real Estate Board case, partially granting the application brought by the Commissioner of Competition pursuant the abuse of dominance provision (section 79) of the Competition Act.    

As mentioned in our earlier blog posts, the Commissioner’s application involves a challenge by the Commissioner against TREB for allegedly abusing its dominance under section 79 of the Competition Act in relation to membership rules governing the use by members of certain of the board’s multiple listing service® (MLS®) listing data. In particular, the Commissioner alleged that TREB’s rules restricted the manner in which real estate brokers and salespersons may display and use certain MLS® data.

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Competition Bureau completes update of Intellectual Property Enforcement Guidelines

Jeff Brown and Margaret Kim - 

On March 31, 2016, the Competition Bureau (the Bureau) released the anticipated final version of its updated Intellectual Property Enforcement  Guidelines (2016 IPEGs), seven months after the public consultation of the Phase II draft revision (Draft Phase II IPEGs) concluded in August 2015. The 2016 IPEGs further clarify, and provide practical guidance on, the Bureau’s enforcement approach to several important issues at the interface between competition and intellectual property (IP) laws, namely (1) patent litigation settlements between brand and generic pharmaceutical companies, (2) product switching (also known as product hopping), (3) patent assertion entities (PAEs) and (4) collaborative standard setting and standard essential patents (SEPs). 

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Investment Canada Act: "privilege" has its limits in US Steel case

Susan M. Hutton and Michael Laskey

On January 26, 2016 the Ontario Court of Appeal held that the confidentiality and privilege protections in section 36 of the Investment Canada Act do not prevent courts from ordering companies to disclose the undertakings they are required to make to the Canadian government in order to obtain ICA approval for foreign acquisitions.

Pre-closing ICA approval is often required for direct foreign acquisitions of large Canadian companies. Foreign investors are typically required to make binding commitments (undertakings) to the Canadian government in order to obtain approval. While these undertakings are usually kept confidential, the Court of Appeal’s decision suggests that courts can order companies to disclose the undertakings in some circumstances (e.g., insolvency proceedings), even when the terms of the ICA may prevent government officials from doing so. Businesses should be mindful of this risk when negotiating and agreeing to undertakings.

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CRTC executes another raid in malware investigation

David Elder - 

The Canadian Radio-television and Telecommunications Commission (CRTC) has announced the execution of another warrant under Canada’s Anti-Spam Legislation (CASL), this time at two locations in the Niagara region of Ontario.

This is only the second such warrant executed by the CRTC under the anti-spam law.  As in a recent previous announcement respecting the execution of a similar warrant, the warrant was issued as part of an ongoing investigation, and the party that was the subject of the warrant was not identified.

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Canadian Merger Control Thresholds for 2016: Competition Act and Investment Canada Act increases

Susan M. Hutton

Both the Competition Act and the Investment Canada Act thresholds for review of acquisitions involving Canadian businesses are expected to increase in 2016. The “size of target” threshold for Competition Act notification, if adjusted pursuant to the formula prescribed in the Act, will increase very slightly to C$87 million, although this increase has yet to be confirmed by the Minister and is subject to his discretion. The Canadian government has also announced that the threshold for review under the Investment Canada Act applicable to direct acquisitions by state-owned WTO investors will increase to C$375 million for transactions closing in the remainder of 2016, based on the book value of assets (other ICA thresholds remain unchanged).

Competition Act:

The Competition Bureau must generally be given advance notice of proposed transactions under the merger notification provisions of the Competition Act, when the “size of the target” exceeds the specified threshold, and when the combined Canadian assets or revenues “in, from or into” Canada of the parties together with their respective affiliates (the “size of parties” test) exceeds C$400 million. Transactions involving Canadian subsidiaries, as well as the direct acquisition of Canadian businesses or assets, and acquisitions of interests of as little as 20% (for public companies) or 35% (for private companies and interests in non-corporate business combinations) can trigger Competition Act merger notifications in Canada.

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Telus agrees to pay $7.34 million in customer rebates to resolve false and misleading advertising allegations

Jeff Brown and Margaret Kim - 

On December 30, 2015, the Competition Bureau announced that it had reached a consent agreement with Telus Communications Inc., one of Canada’s “Big Three” wireless carriers, over allegations of false or misleading advertisements for premium text messaging and rich content services, such as trivia, daily horoscopes, and ring tones. 

As part of the consent agreement, Telus will issue rebates in an aggregate amount up to $7.34 million to certain current and former wireless customers, who the Bureau alleged were unknowingly charged extra for the text message services. The Bureau noted that the amount for consumer rebates made available under the consent agreement is the most obtained by it under any consent agreement to date.  In March 2015,  Rogers Communications Inc. settled with the Bureau, agreeing to pay $5.42 million in refunds to customers for the same fees as part of the same investigation. Similar proceedings against Bell Canada and the Canadian Wireless Telecommunications Association are ongoing.

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CRTC battles forces of dorkness, takes action against notorious botnet

David Elder - 

In the second such announcement in less than a week, the Canadian Radio-television and Telecommunications Commission (CRTC) has publicly announced an advanced investigative action -- this time against an unnamed organization suspected of involvement in the distribution the notorious and widely distributed Win32/Dorkbot malware.

The CRTC announced that, with the assistance of the Royal Canadian Mounted Police (RCMP), it had served its first-ever warrant under Canada's Anti-Spam Legislation (CASL) to “take down” a command-and-control server located in Toronto, Ontario as part of what the Commission has characterized as a coordinated international effort.

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Knock, Knock. Who's There? The CRTC

David Elder -

The Canadian Radio-television and Telecommunications Commission (CRTC) has announced that it has executed an inspection warrant to enter and inspect an unidentified property in Brampton, Ontario, as part of an ongoing investigation of what the Commission has characterized as a significant telemarketing operation.

The company under investigation is alleged to be making unauthorized calls to numbers registered on the National Do Not Call List (DNCL) for the purpose of selling anti-virus software.

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Whither the "Nigerian Prince"? Another Canadian business pays penalty under anti-spam law

David Elder - 

The Canadian Radio-television and Telecommunications (CRTC) has announced its third settlement for alleged violations of the anti-spam law, and again, the announcement relates to a well-known Canadian business, rather than an indiscriminate or malicious spammer.

In this most recent case, Rogers Media Inc. (RMI) agreed to pay an Administrative Monetary Penalty of $200,000 as part of an undertaking to resolve alleged violations of Canada’s Anti-Spam Law (CASL).

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Would Steris/Synergy have been blocked in Canada? Prevention of Competition à la Canadienne

William Wu - 

On September 24, 2015, a U.S. District Court in Ohio denied a motion for a preliminary injunction sought by the Federal Trade Commission (FTC) to prevent Steris Corporation from acquiring its alleged potential competitor Synergy Health plc. The FTC sought the injunctive relief under the Clayton Act based on the so-called “actual potential entrant” doctrine, alleging that the acquisition would have prevented Synergy’s entry into the contract sterilization market in competition against Steris.

This case provides an interesting comparison to the Canadian “substantial prevention of competition” test clarified by the Supreme Court of Canada earlier this year in the Tervita decision. Although the tests are now substantially similar, in practice Canadian courts have exhibited a greater willingness to find entry to be “likely” despite business plans to the contrary.

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Competition Bureau bulks up Electronic Production Guidelines

Mike Laskey and Susan M. Hutton - 

On September 8, the Canadian Competition Bureau released updated instructions for the production of electronic records by merging parties responding to supplementary information requests, or “SIRs” as they are known. SIRs are thorough requests for data, e-mails and other documentation and information that are issued in connection with complex competition merger reviews, and are commonly viewed as the Canadian equivalent of US Second Requests. The updated instructions set out detailed parameters that the Bureau expects merging parties to follow when responding to SIRs, and put an increased focus on large document productions exported from specialized litigation support software. The updated instructions are similar to the US Federal Trade Commission’s Bureau of Competition Production Guide.

The updated instructions contemplate two options for document productions: (a) productions from computer systems without sophisticated litigation export capabilities; and (b) productions from specialized litigation software. The instructions associated with the former type are straightforward, and similar to the previous instructions: parties may simply produce documents in their “native” format (e.g., Word, Excel, etc.). The instructions associated with the latter type are largely new, and much more complex: parties are expected to produce documents in a specific and detailed manner, with a large amount of “metadata” (e.g., author, date created, date modified, etc.) set out in a separate index.

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Parkland announces closing of Pioneer transaction as Competition Act merger proceedings continue

Michael Laskey and Katarina Zoricic -

On June 25, Parkland Fuel Corporation announced the closing of its acquisition of the assets of Pioneer Energy LP. The closing follows an order of the Competition Tribunal, issued on May 29, 2015, which partially granted the Commissioner of Competition’s request for an injunction against Parkland’s acquisition of 14 of the 393 gas stations and exclusive long-term supply contracts. The Commissioner of Competition filed an application under section 92 of the Competition Act on April 30, 2015, seeking to block the acquisition of the 14 stations, alleging that the transaction (announced on September 17, 2014) would likely lead to a substantial lessening of competition in 14 already concentrated markets across Ontario and Manitoba.

Issued under section 104 of the Competition Act (see below), the interim injunction requires Parkland to preserve and independently operate the assets to be acquired from Pioneer in six of the 14 communities until the Tribunal issues its final decision.

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Competition Bureau releases "Phase II" Draft Revision of the Intellectual Property Enforcement Guidelines

 D. Jeffrey Brown and Jessica Rutledge - 

On June 16, 2015, the Competition Bureau released an updated draft version of the Intellectual Enforcement Property Guidelines (IPEGs), which set out its approach to enforcing the Competition Act  against potentially anti-competitive practices involving intellectual property. The draft updates concentrate on the Bureau’s enforcement approach in three areas, namely (a) patent litigation settlements, (b) standard-essential patents and (c) patent assertion entities. The most significant changes include the creation of a “safe harbour” for settlements of patent infringement litigation between branded and generic drug manufacturers that do not involve a reverse payment (i.e., a payment from the branded manufacturer to the alleged infringer). The draft IPEGs also signal a narrow scope of litigation settlements that may be subject to enforcement under the criminal cartel provisions of the Act.

Background

The IPEGs set out the Bureau’s enforcement approach with respect to the Competition Act and potentially anti-competitive practices involving intellectual property. 

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