Welcome to the March issue of Blakes Competitive Edge, a monthly publication of the Blakes Competition, Antitrust & Foreign Investment group. Blakes Competitive Edge provides an overview of recent developments in Canadian competition and foreign investment law, including updates on enforcement activity by the Canadian Competition Bureau (Bureau), recent initiatives and key trends.
Key Highlights
- Merger notification thresholds remain unchanged for 2024
- Ministers of Innovation, Science and Industry, and Heritage release new policies for foreign investment in the cultural interactive digital media sector
- Canadian Senate Committees review proposed amendments to the Investment Canada Act and Competition Act
- The Standing Committee on Transportation, Infrastructure and Communities presents its report on Bill C-33, which would make additional transactions subject to a pre-closing notification requirement under the Canada Transportation Act
Merger Monitor
January 28 – February 21, 2024, Highlights
- Six merger reviews started, 10 merger reviews completed
- Primary Industries: professional, scientific and technical services (20%), administrative and support, waste management and remediation services (10%), information and cultural industries (10%), mining, quarrying, and oil and gas extraction (10%), and retail trade (10%)
- One transaction received an Advance Ruling Certificate (10%), and seven transactions received a No Action Letter (90%)
- Zero consent agreements (remedies) filed; zero judicial decisions filed
January – February 21, 2024, Highlights
- 27 merger reviews started, 31 merger reviews completed
- Primary Industries: retail trade (16%), mining, quarrying, and oil and gas extraction (13%), professional, scientific and technical services (13%), real estate and rental leasing (13%), manufacturing (13%), and transportation and warehousing (10%)
- 17 transactions received an Advance Ruling Certificate (55%), and 13 transactions received a No Action Letter (42%)
- One merger review resolved through other means
- Zero consent agreements (remedies) filed; zero judicial decisions filed
Merger Reviews Completed Through February 21, 2024, by Primary Industry
Enforcement Activity
Bureau Expands Investigation into Google's Online Advertising Practices
- On February 29, 2024, the Bureau announced that it had expanded its investigation into Google's online display advertising practices, and obtained a second court order to advance this investigation. The investigation, which began in 2020, initially focused on allegations that Google was leveraging its market power in the supply of video advertising to gain an advantage in the market for tools used by advertisers to purchase ad space. The Bureau has now expanded the scope of its investigation to consider whether Google is: (i) leveraging its alleged market power across display advertising technology services in a way that harms competition, and (ii) using predatory pricing in certain display advertising technology services.
Non-Enforcement Activity
Merger Notification Thresholds Unchanged in 2024
- On February 28, 2024, the Bureau announced that the thresholds for requiring a pre-merger notification under the Competition Act will remain unchanged following a decision by the Minister of Innovation, Science and Industry to maintain the current threshold of C$93-million in 2024; the transaction-size threshold has remained unchanged since it was reduced from C$96-million to C$93-million in 2021.
Bureau Submits Recommendation to the CRTC Regarding Its Wholesale High-Speed Internet Access Framework
- On February 12, 2024, the Bureau made opening submissions in the Canadian Radio-television and Telecommunications Commission (CRTC) hearing on its review of the wholesale high-speed access service framework. The Bureau advocated for changes to the CRTC's wholesale access framework delivered over Fiber to the Premises (FTTP) networks.
Investment Canada Act
Net Benefit Reviews of Foreign Investments in Canada's Cultural Interactive Digital Media Sector May Result in Stricter Undertakings
- On March 1, 2024, the Minister of Innovation, Science and Industry (Minister), released a statement discussing the government's approach to reviewing foreign investment into the digital media sector under the national security review and net benefit review provisions of the Investment Canada Act. Going forward, investments into the interactive digital media sector by entities owned or influenced by foreign states (particularly those that engage in activities that the government believes "may pose a risk to Canada's national security") will be subject to enhanced national security scrutiny. Net benefit reviews for foreign investments in the cultural interactive digital media sector may require stricter undertakings with a longer duration. More information about the government's updated policy can be found in two policy statements that were released concurrently with the Minister's statement: (i) Policy Statement on Foreign Investment Review in the Interactive Digital Media Sector; and (ii) Policy Statement on the benefit reviews of Foreign Investments in Cultural Businesses in the Interactive Digital Media Sector under the Investment Canada Act.
Non-Cultural Investments
January 2024 Highlights
- 95 notifications filed (71 filed for acquisitions and 24 for the establishment of a new Canadian business)
- Country of ultimate control: United States (54%); United Kingdom (5%); France (5%)
Legislation Watch
Senate Committee Considers Proposed Amendments to the Investment Canada Act Under Bill C-34
- The Standing Senate Committee on Banking, Commerce and the Economy continues to consider amendments to the Investment Canada Act proposed in Bill C-34. These amendments would, among other things, introduce a new mandatory pre-closing filing requirement for specified investments by non-Canadians in certain business sectors (which will be identified by regulation). The Committee will reconvene to consider this bill on March 20, 2024. For more information on Bill C-34, please see our December 7, 2022 Blakes Bulletin: Canadian Government Proposes Important Changes to Expand National Security Review Powers Under the Investment Canada Act and our April 4, 2023 Blakes Seminar: Sweeping Changes to Canada's Competition and Foreign Investment Rules.
Competition Bureau Writes Letter to Senate and House Committees Regarding Bill C-59
- While second reading of Bill C-59, Fall Economic Statement Implementation Act 2023 (which includes significant amendments to the Competition Act), continues in the House of Commons, both the House of Commons Standing Committee on Finance and the Standing Senate Committee on National Finance have begun a pre-study of the bill. The Commissioner of Competition has submitted a letter to both committees expressing his support for the proposed amendments to the Competition Act included in the bill, and proposing amendments to the bill related to drip pricing, greenwashing, ordinary selling price, the creation of structural presumptions for mergers, the remedial standard for mergers, and environmental certificates. For more information on the impact the proposed amendments will have on the Competition Act, please see our November 30, 2023 Blakes Bulletin: Revamping the Rules: Canadian Competition Act Update and November 23, 2023 Blakes Bulletin: Competition Law Update: Further Changes Coming to the Competition Act.
Parliament Committee Presents Report on Proposed Amendments to the Canada Transportation Act and the Canada Marine Act Under Bill C-33
- On February 7, 2024, the Standing Committee on Transportation, Infrastructure and Communities presented its report on Bill C-33 to the House of Commons. Among other things, Bill C-33 proposes to amend the Canada Transportation Act to require pre-closing notification to both the Minister of Transport and the Bureau of certain transactions involving a transportation undertaking situated in a port where the transaction exceeds certain financial thresholds, transportation is not subject to a notification exemption under section 111-113 of the Competition Act and certain other conditions are met. Bill C-33 also proposes to amend the Canada Marine Act to provide the Minister of Transport with the power to require, by order, measures to prevent imminent harm to national security, national economic security, or competition.
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