The 2013 Canadian Competition and Foreign Investment Law Year in Review
February 20, 2014
During 2013, Canadian courts, including the Competition Tribunal (Tribunal), issued more substantive decisions in competition matters than in any year in the past decade. There were also significant developments in foreign investment law in Canada, including a focus on the treatment of investments by state-owned enterprises. 2013 also saw the first known rejection of a transaction under Canada’s national security regime. Here are the highlights, including what to watch for in 2014:
- Criminal Matters: A corporation was found guilty of price-fixing on the basis of its general manager’s participation in the cartel, confirming that criminal liability can attach to a corporation by virtue of the actions of employees who are not the "directing minds" of the corporation. (R. v. Pétroles Global inc., August 2013)
- Abuse of Dominance: The Federal Court of Appeal ruled that the Tribunal erred when it dismissed the abuse application by the Commissioner of Competition (Commissioner) against the Toronto Real Estate Board (TREB). The decision casts uncertainty over who can be the subject of an abuse of dominance application. (Commissioner of Competition v. Toronto Real Estate Board, February 2014)
- Price Maintenance: The Tribunal dismissed the Commissioner’s application and ruled that price maintenance under the Competition Act (Act) requires that the product sold by the person influencing upward or discouraging the reduction of the product’s price be resold by the person’s customer. (Commissioner of Competition v. Visa Canada Corporation and MasterCard International Incorporated, September 2013)
- Deceptive Marketing Practices: The Commissioner’s application against a wireless carrier for misleading advertising was largely dismissed. This decision also addressed the constitutionality of administrative monetary penalties (AMPs) and the standard to be applied under the general misleading advertising provisions in the Act. (Commissioner of Competition v. Chatr Wireless Inc., August 2013)
- Class Actions: The Supreme Court of Canada affirmed the right of indirect purchasers to assert damage claims for violations of the Act, while confirming its rejection of the "passing on" defence. (Pro-Sys Consultants Ltd. v. Microsoft Corporation, Sun-Rype Products Limited v. Archer Daniels Midland Company and Infineon Technologies AG v. Option consommateurs, October 31, 2013)
- Mergers: The Federal Court of Appeal upheld the Tribunal’s decision in a non-notifiable transaction requiring a landfill operator to divest a hazardous waste landfill on the ground that the acquisition would substantially prevent competition. (Tervita Corporation et al v. Commissioner of Competition, February 2013)
- Investment Canada Act: The Canadian government blocked the proposed $520 million acquisition of the Allstream division of Manitoba Telecom Services Inc. by Accelero Capital Holdings on national security grounds (October 2013).
- What to Watch for in 2014:
- Industry Focus: More enforcement actions and advocacy interventions by the Competition Bureau (Bureau) in the digital economy and health care industries.
- Criminal Matters: More contested price-fixing and bid-rigging prosecutions.
- Misleading Advertising: More enforcement action with respect to misleading price representations.
- Class Actions: Direction on the appropriate methodology and expert evidence required at the certification stage to establish harm on a class-wide basis and to demonstrate the passing on of alleged overcharges at all levels of the supply chain.
- Investment Canada Act: Significant increase to thresholds that trigger a review of acquisitions by non-state-owned enterprises will likely occur in 2014.
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