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.


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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Privacy Commissioner study finds compliance gaps with online behavioural advertising

David Elder - 

New research released by the Office of the Privacy Commissioner of Canada (OPC) suggests that most advertising organizations placing behaviourally targeted online advertising are meeting privacy requirements, although the report also suggests there are a number of areas for improvement.

The study showed that most advertising organizations are providing some form of notification to users, as well as an opt-out mechanism; however, the research also suggests that some opt-out procedures can be confusing or cumbersome, and some of the advertising organizations are continuing to serve ads based on sensitive topics.

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Canada's Competition Bureau loses major bid-rigging case: 60 not guilty verdicts

Susan M. Hutton and Gina Demczuk

In a further blow to the track record of the Competition Bureau and the Public Prosecution Service of Canada in contested criminal trials, on April 27, 2015, a jury in the Ontario Superior Court of Justice found nine defendants not guilty on 60 charges of bid-rigging and conspiracy to rig bids. Another individual - David Watts, who waived his right to a preliminary inquiry, and sought an order directing a verdict of acquittal for himself only - was acquitted in February, 2015 of similar charges in a directed verdict.

The Competition Bureau had commenced a criminal inquiry in 2006 into bid-rigging allegations against 14 individuals and seven companies, regarding allegations that the accused had coordinated their bids for certain information technology (IT) services contracts with the Canadian federal government. The Attorney General filed the charges in February, 2009. One corporation had sought immunity from the Competition Bureau under its immunity program, in which the corporation and its employees are not prosecuted in exchange for assisting the Bureau with its inquiry and subsequent prosecution.  Two of the individuals pleaded guilty. Prior to the preliminary inquiry, the Crown had dropped charges against one individual.

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CRTC shows great interest in US-based robocaller offering low credit card rates - $145,000 fine imposed

David Elder -

For the second time in a month, the CRTC has imposed a penalty against a foreign telemarketer.

In the most recent case, an administrative monetary penalty of $145,000 was issued against Arizona-based Rainmaker Marketing/Maple Accounting for making unsolicited telemarketing calls pitching lower credit card rates.

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Changes to Canadian Foreign Investment Regime: higher bar for review, more burdensome disclosure requirements under the Investment Canada Act

Michael Laskey -

Earlier today, the Canadian government published changes to the Investment Canada Act regulations that will - when they become effective in 30 days (on April 24) - make it significantly easier for many transactions to escape a lengthy review process, while at the same time increasing the disclosure burden for the routine notifications required of all foreign investors in Canada and – effective March 13, 2015 – lengthening the timelines for national security reviews.

The “net benefit” review threshold will be changed from an asset value test to an enterprise value test, and will be increased from C$369 million to C$600 million, for most investors. At the same time, the revised regulations impose invasive and burdensome new disclosure obligations for investments that fall short of the review threshold. These new disclosure obligations will require purchasers to provide, among other things, personal information about their directors, highest-paid officers and significant investors. National security review timelines have been extended, and made subject to potential further extension at the government’s discretion.

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Red Light: Competition Bureau alleges misleading advertising by car rental firms

Jennifer Rad -

The Competition Bureau has filed an application with the Competition Tribunal against Aviscar and Budgetcar, and their parent company, Avis Budget Group Inc., alleging deceptive marketing practices contrary to several provisions of the Competition Act. The Bureau’s investigation into the pricing practices of Avis and Budget, two of the largest rental car companies in Canada, uncovered price representations which the Bureau considers to be false or misleading in a material respect, dating back to 1997.

In its Notice of Application, the Bureau submits that the prices advertised to the public by Avis and Budget are “not in fact attainable,” thereby creating a false general impression about prices and discounts. The Bureau submits that actual rental costs could be up to 35% higher than advertised once “non-optional” fees imposed by both companies are included. Although these “non-optional” fees are known to Avis and Budget, the Bureau alleges that the companies choose to exclude them from advertised prices and/or discounts. The Bureau also alleges that the “non-optional” fees, once revealed to the customer, are characterized as charges being imposed on customers by governments or other third-parties, when in fact they are Avis’ and Budget’s own charges related to the cost of doing business.

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CRTC sends shot across the bow to international telemarketers; issues $200,000 fine to US company selling cruise vacations

David Elder

In a precedent-setting ruling, the Canadian Radio-television and Telecommunications Commission (CRTC) has issued its first penalty to a foreign-based telemarketer for violations of the Unsolicited Telecommunications Rules.

The administrative monetary penalty (AMP) was paid by a Florida company as part of a settlement for making unsolicited telemarketing calls via an automatic dialing-announcing device (ADAD) to offer cruises to Canadians, many of whom have their phone number registered on the National Do Not Call List (DNCL). In addition, the company did not possess a valid exemption to the National DNCL

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Media mergers and the Competition Bureau: Is the medium the market?

Michael Kilby -

The rapid growth of digital media in recent years and the simultaneous pressures on traditional media have led to a number of fascinating media transactions in which the Competition Bureau has had to confront the difficult question of product market definition in industries characterized by disruptive technological change.

In March 2015, the Bureau cleared a magazine publishing transaction (TVA Group’s acquisition of Transcontinental’s magazine business) due, in its words, to the “presence of effective remaining competitors in all overlapping genres of magazines and the ability of advertisers to reach the same demographics through other magazines and media” (emphasis added). The Bureau also stated that it considered the “general decline in readership of magazines, in part attributable to the increasing importance of the Internet as an alternative for readers” (emphasis added).

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First blood: CRTC imposes $1.1 million fine in first ever finding under anti-spam law

David Elder -

Eight months after Canada’s Anti-Spam Law (CASL) came into force, the Canadian Radio-television and Telecommunications Commission (CRTC) has made public its first ever finding of non-compliance with the Act, issuing an administrative monetary penalty of $1.1 million against Compu-Finder, a firm that provides training and consulting services.

Surprisingly, this much anticipated enforcement action was not against a firm targeting consumers, as many had suspected, but rather was directed at a firm sending email messages to businesses to promote various training courses related to topics such as management, social media and professional development.   It is believed by many that the overwhelming majority of the more than 250,000 complaints received by the CRTC since the law came into force have been from consumers.  In the case at hand, the CRTC indicated that over one quarter of all complaints about the training industry sector received by the Spam Reporting Centre related to Compu-Finder, although it is not known how many complaints were received.

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Grocery mergers in the United States and Canada: Something to chew on

Michael Kilby -

On January 27, the U.S. Federal Trade Commission announced a competition law remedy in respect of the Albertsons / Safeway grocery merger, requiring the divestiture of 168 supermarkets in 130 local markets in numerous states. This remedy is of particular interest from a Canadian competition law perspective in light of the recent completion of two Canadian grocery sector transactions, namely, Sobeys’ acquisition of Canada Safeway and Loblaw’s acquisition of Shoppers Drug Mart, both of which resulted in divestitures.

Several comparisons may be drawn between the approach taken by the U.S. FTC and the Canadian Competition Bureau in reviewing these mergers.

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