On May 18, 2011, the Competition Bureau issued the Competition Bureau Fee and Service Standards Handbook for Written Opinions (Handbook). By way of background, Section 124.1 of the Competition Act provides that any person may apply to the Commissioner for a binding written opinion on the applicability of any provision of the Competition Act to a proposed practice or conduct. The Handbook offers updated guidance on the written opinion request process for non-merger related matters and states that written opinions provided pursuant to Section 124.1 of the Competition Act will not provide substantive assessments related to competitive effects or defences. Accordingly, written opinions will only address whether one or more provisions of the Competition Act apply to the proposed arrangement, practice or conduct. The Handbook's highlights are summarized below.
Limitations of a Written Opinion
In the context of responding to a written opinion request, the Competition Bureau "will not make third party contacts, provide an assessment of the effects on competition of the proposed conduct or practice, or provide an assessment of defences that may be available to a party who is subject to enforcement action by the Bureau." Accordingly, the Handbook sets out a "non-exhaustive list of the information that the Bureau generally requires to determine whether a requested provision is applicable to a proposed practice or conduct" (emphasis added).
Information Required
In light of the 2009 legislative amendments and the approach to written opinions, the lists of information required by the Competition Bureau in order to provide written opinions have been revised. For example, to seek a written opinion with respect to Sections 77, 78 or 79 of the Competition Act, an applicant is no longer required to provide an assessment of market power or a discussion of the potential defences, limitations or exceptions as set out in the applicable section. Similarly, for Section 45, an applicant is no longer required to provide an assessment of market power or possible defences. Set out below are the information requirements for these provisions and the new section 90.1:
- Sections 77, 78 and 79 – Exclusive Dealing, Tied Selling, Market Restriction and Abuse of a Dominant Position:
a) A copy of any relevant agreement(s) and a complete description of the proposed plan, including any known possible effects of the plan on current or potential customers, suppliers and competitors, as well as the business rationale or purpose for the plan;
b) A list of products and/or geographic areas relevant to the proposed conduct and corresponding market share information;
c) A description of the product or products relevant to the proposed conduct including: intended uses; regulations related to production, distribution or sale; patents, trademarks or other applicable property rights; as well as a list of products that are complements or substitutes for the product; and
d) Information regarding whether or not the plan in question would constitute a practice.
- Section 90.1 – Agreements or Arrangements that Prevent or Lessen Competition Substantially:
a) A copy of any relevant agreement(s) and a complete description of the proposed plan, as well as the business rationale or purpose for the plan;
b) A complete description of the parties to the proposed agreement or arrangement and their affiliates;
c) A description of the product or products relevant to the proposed conduct including: intended uses; regulations related to production, distribution or sale; patents, trademarks or other applicable property rights; as well as a list of products that are complements or substitutes for the product; and
d) A list and description of any products and geographic areas where the parties or their affiliates compete or potentially compete with one another, along with corresponding market share information.
- Section 45 – Conspiracies, Agreements or Arrangements Between Competitors:
a) A copy of any relevant agreement(s) and a complete description of the proposed plan, as well as the business rationale or purpose for the plan;
b) A complete description of the parties to the proposed agreement or arrangement and their affiliates;
c) A description of the product or products relevant to the proposed conduct including: intended uses; regulation related to production, distribution or sale; patents, trademarks or other applicable property rights, as well as a list of the primary buyers of the products that are complements or substitutes for the product; and
d) A list and description of any products and geographic areas with respect to which the parties or their affiliates compete or potentially compete with one another.
There are some modest changes to the information required for written opinions on the price maintenance provision (Section 76), and very minor changes to the information required for written opinions on the misleading representations and deceptive marketing practices provisions (Sections 52 to 55.1 and 74.01 to 74.06). The Handbook acknowledges that, in addition to the listed information requirements, specific additional information may be required in certain circumstances.
Discretion to Not Issue a Written Opinion
The Handbook confirms that the Commissioner has the sole discretion to decline to issue a written opinion, and states that circumstances in which the Commissioner might exercise such discretion include where: the information requirements are not met; the facts are uncertain or hypothetical; the Competition Bureau requires information from third parties; the provision of an opinion could interfere with an ongoing examination or inquiry; or it is otherwise reasonable to decline. This list goes beyond that in the previous handbook, which simply stated that where the information requirements are not met, the Commissioner may exercise the discretion not to provide an opinion.
With respect to fee refunds, a refund may be issued where the Commissioner decides not to provide a written opinion and deems it reasonable in the circumstances to provide a refund.
Service Standards and Fees
There are no significant changes to the associated fees and service standards. The Competition Bureau has clarified the application of service standards and fees where a written opinion regarding the applicability of more than one provision of the Competition Act is requested: the longest service standard period will apply, and only one fee will apply for the amount that is the highest of the applicable fees.
The Handbook provides revised timelines within which an applicant must respond to a request for additional information in order to avoid a suspension of the service standard. For a non-complex written opinion request, the service standard will not be suspended if all of the information requested is received within three business days of receipt of the Competition Bureau's request. For a complex written opinion request, the timeline for responding to an information request is five business days. The previous timeline for responding to information requests related to both non-complex and complex written opinions was five days.
Michelle Lally - Chair of the firm's prestigious Competition Law and Foreign Investment Group and Chair of the National Competition Law Section of the Canadian Bar Association. Kaeleigh's practice involves analyzing the competitive implications of mergers, strategic alliances and joint ventures; the preparation of pre-merger filings under the Competition Act; providing advice on the conspiracy and other criminal and civil provisions of the Competition Act, including matters relating to domestic and international investigations and prosecutions; assessing and developing competition law compliance programs; and advising on foreign investment matters under the Investment Canada Act.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
