The ebooks settlement reached between the Competition Bureau and
ebook publishers has been stayed pending the determination of a
challenge brought by
ebook retailer Kobo Inc. to the settlement.
Kobo argues that its contracts with the four publishers,
Hachette Book Group, HarperCollins, Macmillan, and Simon &
Schuster, will be fundamentally altered or terminated because of
the settlement, and that it will lose money. Kobo claims that a
similar settlement in the US led it to close a US office and
refocus on other markets. Kobo claims that it also led another
ebook company, Sony, to exit the market, and caused Barnes &
Nobles' "NOOK" ebook division to become
Indigo Books & Music Inc. has applied for leave to
intervene in support of Kobo.
Indigo's CEO Heather Reisman says, in an affidavit, that
the settlement threatens to give Amazon a monopoly or near
monopoly over the sale of ebooks in Canada.
The Competition Bureau, in its response, contends that Kobo is
simply trying to protect the guaranteed 30% margin it has under its
existing contracts, and keep prices from falling.
The ebooks settlement is in the form of a consent agreement
between the Commissioner of Competition and the four ebook
publishers. The Competition Act provides that consent
agreements are treated as orders of the Competition Tribunal as
soon as they are filed with the Tribunal.
The consent agreement provisions replaced consent order
provisions in 2002. The old consent order provisions required the
Tribunal's approval of settlements. The Tribunal made it clear
that it would not rubber stamp consent orders. In a number of
cases, lengthy hearings with multiple intervenors were held. The
Tribunal also rejected a proposed consent orders (or parts of
consent orders) in the Imperial Oil and Palm Dairies cases. This
led to pressure to remove the Tribunal's ability to reject
Under the new consent agreement provisions, a person, in this
case Kobo, that is directly affected by a consent agreement, can
apply to the Tribunal for rescission or variation of the consent
agreement. This is what Kobo has done.
The stay is merely the first chapter in Kobo's challenge. In
order to succeed, Kobo must now establish that the terms of the
consent agreement could not be the subject of an order of the
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.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
In this report, the Blakes Competition, Antitrust & Foreign Investment group outlines the key Canadian developments in the areas of competition and foreign investment law over the past year and sets out the key trends for 2015.
On February 13, 2015, the Supreme Court of Canada reiterated
that in Canada, the legal professional privilege must remain nearly
absolute, and recognized as a principle of fundamental justice that
the government cannot impose duties on lawyers that undermine their
duty of commitment to their client.
Information received by the Competition Bureau at the proffer stage of its Immunity and Leniency Programs is not protected from disclosure to other accused persons by settlement privilege, the Ontario Superior Court of Justice recently held in R. v. Nestlé Canada Inc.
A landfill merger that gave the buyer a monopoly and would prevent prices from falling was saved by efficiencies amounting to one-half of one person’s annual salary, the Supreme Court of Canada ruled recently in Tervita Corp. v. Canada (Commissioner of Competition).