According to documents filed with the Federal Court on December
12, 2013, the Commissioner of Competition (the
"Commissioner") is seeking a compulsory production order
under section 11 of the Competition Act (the "Act")
against Google Canada Corporation ("Google").
The materials filed with the court indicate that, following the
receipt of several complaints, the Commissioner launched an
investigation into certain allegedly anti-competitive practices by
Google. The materials further indicate that the Commissioner's
preliminary investigation found that (i) Google "substantially
or completely controls one or more markets related to the supply of
Internet search and search advertising services in Canada" and
(ii) it has abused its dominant position with respect to the
operation of its internet search engine and search advertising
platforms, as well as through the imposition of certain terms and
conditions of its search-related agreements with third parties.
The Commissioner alleges that Google has:
i. entered into exclusive default Search
Syndication (i.e., searches via Google's website) and Search
Distribution (i.e., searches through applications installed on
other software or hardware products) agreements with website
operators, as well as software and hardware vendors;
ii. favored its vertical services, which
facilitate searches within a specific category of content (e.g.,
Google News), over its vertical competitors on its search results
iii. placed anti-competitive restrictions on the
use of Google's AdWords platform that prohibit third party
licensees from offering software allowing AdWords users to transfer
advertising campaign data between Google and a third party
Global Enforcement Initiatives
Enforcement agencies in other jurisdictions, including the U.S.
Federal Trade Commission (the "FTC") and the European
Commission (the "EC"), launched investigations into
similar practices by Google in their respective jurisdictions. The
FTC ended its investigation in early 2013 after Google, among other
things, committed to removing terms from the AdWords Application
Programming Interface Terms and Conditions that created barriers
for advertisers seeking to coordinate online advertising campaigns
between AdWords and other search advertising platforms. The EC has
not yet accepted Google's commitments to address its concerns
and its investigation remains ongoing.
Based on the materials filed with the court, it appears that
notwithstanding the commitments made by Google to other antitrust
enforcement agencies (in particular those to the FTC), the
Commissioner remains concerned that these commitments do not
effectively address the anti-competitive effects in Canada or
prevent the future implementation of other mechanisms that could
have similarly anti-competitive effects.
Interestingly, the materials filed with the court indicate that
the Commissioner believes that the majority of the information and
records relevant to the inquiry are held by Google's U.S.
parent company, Google Inc. Under the Act, a compulsory production
order can seek records held by a foreign "affiliate",
including parent companies and the Commissioner will be seeking a
significant volume of records in the possession of Google Inc.
Consistent with the use of production orders in most
non-criminal cases, the Commissioner gave notice to Google that it
would be seeking a production order and engaged in pre-motion
dialogue with the company.
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