Canada and Japan Reach Agreement in Principle for Competition Law Co-operation

Canada and Japan recently announced that they have agreed on the major elements of a draft cooperation agreement. The draft agreement is modeled on those already in place between Canada and the U.S., the U.K., and the E.U. It is to include five elements: notification of enforcement activities that may affect important interests of the other party; co-operation in the form of assistance to one another's competition authorities; co-ordination of enforcement activities in mutually related matters; "positive comity" through requests for enforcement action to be taken by the other party in relation to conduct affecting important interests of the requesting party; and "negative comity" through the careful consideration of important interests of the other party in enforcement activities.

The draft agreement is the product of several rounds of negotiations that were first announced in November 2002. With the major elements settled, it still remains for these elements to be put into the form of a definitive agreement.

RONA Asks Competition Tribunal to Rescind Consent Agreement

In an application filed with the Competition Tribunal (Tribunal) on January 10, 2005, RONA Inc. (RONA) has asked the Tribunal to rescind a Consent Agreement filed with the Tribunal on September 3, 2003. The Consent Agreement resolved concerns raised by the Commissioner of Competition (the Commissioner) that RONA's acquisition of Réno Dépôt and The Building Box "big-box" home improvement stores from Kingfisher plc (Kingfisher) would substantially lessen competition in Sherbrooke, Quebec. In order to resolve these concerns, RONA agreed to divest to an independent third party the Réno Dépôt store in Sherbrooke.

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A Landmark Decision in Sears ''Ordinary Price'' Case

On January 24, 2005 the Competition Tribunal (the Tribunal) released its reasons (dated January 11, 2005) in The Commissioner of Competition v. Sears Canada Inc. The Tribunal found that Sears Canada Inc. (Sears) had violated section 74.01(3) of the Competition Act, which prohibits the making of materially misleading representations to the public about the ordinary selling price of a product. The Commissioner of Competition (the Commissioner) specifically alleged that, in 1999, Sears deceived consumers by inflating the "regular" price of certain tires while advertising those tires at "sale" prices. In reaching its conclusions, the Tribunal essentially adopted the analytical approach set out in the Competition Bureau's Information Bulletin - Ordinary Price Claims: Subsections 74.01(2) and 74.01(3) (the Bulletin).

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