The Competitor : Canada Competition / Antitrust Blog by Stikeman Elliott Lawyers & Attorneys

(MR-296)

In addition to the foregoing amendments, the IESO Board unanimously approved further amendments to remedy counter-intuitive pricing. The purpose of these amendments is to allow the IESO to make changes to real-time pricing signals in order to hopefully reduce the instances of counter-intuitive pricing. The proposed amendments are two-fold. First, emergency energy purchases may produce counter-intuitive pricing because they reduce demand in constrained sequences by an amount equivalent to the emergency energy purchase; the dispatch scheduling algorithm automatically carries that demand reduction to the market schedule which thereby depresses the market price. As such, section 3.2.1.4 in Appendix 7.5 will be amended so that demand in the market schedule is not reduced when the IESO makes emergency energy purchases (although demand will still be reduced in the constrained schedule so that other resources are dispatched appropriately). Second, other emergency control actions such as voltage reductions or load cuts may produce counter-intuitive pricing because they result in an actual decrease in electricity demand. Accordingly, a new section 3.2.1.12 will be added to Appendix 7.5 to enable the IESO to increase or decrease demand in the market schedule to offset the counter-intuitive impact on market pricing and market signals triggered by emergency control actions.

LINKS:

IESO Board Decision
Technical Panel Recommendation on Amendment Proposal
Amendment Proposal R00-R01 - Request for Stakeholder Review and Comment
Amendment Submission

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Vicky Eatrides

The Competition Bureau (the Bureau) is seeking public comment on a revised "Information Bulletin on the Communication and Treatment of Information under the Competition Act (Draft for Consultation, August 2005)". As the original policy was introduced in 1995, the revised bulletin reflects amendments made to the Competition Act (the Act) in 2002. The Bureau notes, in particular, that section 29 of the Act also protects information provided voluntarily pursuant to the Act, rather than only protecting information obtained using formal powers, as had previously been the case.

The revised bulletin also provides examples illustrating when, in the Bureau's view, information can be communicated to third parties under the various exceptions to section 29. It also clarifies the treatment of information when it is communicated to or received from foreign authorities. Finally, the revised bulletin includes a section discussing other matters where the treatment of information is of concern; for example, the Bureau's Immunity Program, the whistle-blowing provisions, binding written opinions, the right of access to records, requests under the Access to Information Act, private actions for damages and private access to the Competition Tribunal.

The Bureau will accept comments on the revised bulletin until December 2, 2005

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A cooperation agreement to improve competition law enforcement between the governments of Canada and Japan was signed on September 6, 2005. The agreement is similar to existing agreements that Canada has signed with the United States, the European Communities and Mexico. It will come into force on October 6, 2005, and is available on the Competition Bureau's website.
 

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The Competition Bureau announced on August 30, 2005 that the Federal Court of Canada imposed fines totaling $1.675 million for a conspiracy to fix prices of nucleotides, a food flavour enhancer, in Canada. Ajinomoto Co. Inc., Japan's largest producer of seasonings, pleaded guilty to violating section 45 of the Competition Act by virtue of its participation in the conspiracy and was fined $1.5 million. CJ Corp. also pleaded guilty and was fined $175,000. In 2001, these same two companies pleaded guilty and paid fines in the United States for participating in this cartel. Katherine Kay of Stikeman Elliott's Competition/Antitrust Group acted for one of the defendants in this matter.

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The Competition Bureau released a Technical Backgrounder on August 31, 2005 that outlines the reasoning behind its approval of the acquisition of the Better Beef Group of Companies (Better Beef) by Cargill Limited (Cargill"). Better Beef and Cargill are both integrated beef packers, who slaughter cattle and fabricate, package and market beef products. The Bureau examined in depth the potential upstream impact on competition for Canadian cattle, as well as the downstream impact on Eastern Canadian competition for the sale of case-ready beef (meat cut and packaged suitable for display in retail stores). On the buying side, the Bureau concluded there are separate Western and Eastern cattle markets and minimal actual overlap between the parties. For case-ready beef, despite the large market shares of the parties, the Bureau concluded that the threat of entry by and the countervailing power of retail grocery firms make the merger unlikely to lessen or prevent competition substantially in any relevant market.

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The Commissioner of Competition (the Commissioner) has filed a Memorandum of Fact and Law (the factum) in connection with the appeal of the Competition Tribunal's February 3, 2005 dismissal of her abuse of dominance and exclusive dealing case against Canada Pipe.1 The factum makes interesting reading.2 The Commissioner raises some important questions regarding the proper legal analysis of the abuse of dominance and exclusive dealing provisions of the Competition Act (the Act). In addition, certain of her arguments seem to favour turning business practices such as exclusivity discounts and loyalty programs into per se illegal behaviour for dominant firms. Therefore, the ultimate decision of the Federal Court of Appeal will be of significant interest not only to Canada Pipe, but also to competition law practitioners in Canada and elsewhere. Moreover, should Bill C-19 become law, giving the Tribunal the power to issue fines in respect of abuse of dominance, the Federal Court's decision in this case will only increase in importance.

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