Canada: A Year Of Significant Change: From "Per Se" To "Made In Canada"

In 2009, Canada made significant amendments to its competition and foreign investment laws, including introducing a "per se" criminal offence for conspiracies and emulating aspects of the pre-merger notification system in the United States. The Canadian Competition Bureau ("Bureau") engaged in numerous consultations and adopted new policies in response to the new legislation. It continued an active enforcement agenda to combat both domestic and international cartels as well as deceptive and misleading advertising, and used its enhanced merger review powers in a handful of significant transactions. Some highlights of 2009 include:

  • The Government of Canada passing the most significant amendments to the Competition Act (the "Act") since its enactment in 1986, including:
    • A new "per se" criminal offence for conspiracy (section 45) and a new reviewable practice for agreements among competitors (section 90.1) that will come into effect on March 12, 2010;
    • A new U.S.-style two-stage (second request) process for merger reviews;
    • Increased thresholds for pre-merger notification; and
    • Decriminalizing pricing practices (including price maintenance) to afford firms greater flexibility in dealing with their customers.
  • The Bureau issuing new guidelines, including on: (a) the merger review process and (b) competitor collaboration. Draft guidelines on (i) leniency in cartel cases and (ii) abuse of dominance were also released for public comment;
  • The Competition Tribunal ("Tribunal") issuing a key decision clarifying the scope of refusal to deal under section 75;
  • Firms making strategic use of the Act to prevent competitors from making misleading comparative product claims; and
  • Several Canadian court decisions that could change the landscape for private competition class actions.

There were also some senior staff changes at the Bureau: Melanie Aitken, who had been head of the Mergers Branch and then served as Interim Commissioner of Competition following the resignation of Sheridan Scott in December 2008, was appointed to a five-year term as Commissioner of Competition in August 2009. Ms Aitken's successor as head of the Mergers Branch announced his departure in December 2009, to be replaced on an interim basis by Ann Wallwork, a long-time Bureau officer. In addition, John Pecman, another long-time Bureau officer, was confirmed as head of the Criminal Matters Branch.

AMENDMENTS TO THE COMPETITION ACT

Canada's primary law regulating competition is the Competition Act. On March 12, 2009, the Act was amended to create new U.S.-style "per se" offences and merger review processes. The most noteworthy amendments to the Act include:

Conspiracy And Bid-Rigging

  • Introduction Of A Dual-Track Approach And Increased Penalties For Anti-Competitive Arrangements Between Competitors. As of March 12, 2010, the criminal anti-cartel provision will be limited to hardcore "cartel-like" agreements between competitors aimed at fixing or otherwise controlling prices, maintaining, lessening or eliminating the production of a product, and allocating sales, territories, customers or markets. This will be a "per se" offence for which it will no longer be necessary to prove an undue lessening of competition. Maximum prison terms under this new criminal anti-cartel provision will increase from five to 14 years, while maximum fines will increase from $10 million to $25 million. A new civil conspiracy provision permits the Tribunal to address other types of agreements between competitors that have anti-competitive effects.
  • Broadening Of Bid-Rigging Provisions And Increased Penalties. The bid-rigging provisions have been broadened to include arrangements to withdraw contract bids or tenders. Maximum jail sentences for bid-rigging offences have increased from five to 14 years.

Merger Review

  • Introduction Of A Two-Stage (Second Request) Merger Review Process. A new merger review process has been introduced to replace the old 14/42-day review periods for short-form and long-form notifications. The new process replicates the U.S. Hart-Scott Rodino Antitrust Improvements Act process by requiring the submission of prescribed information, followed by an initial 30-day review period during which the proposed transaction cannot be completed. The Commissioner can extend this initial review period by making a Supplementary Information Request ("SIR"), after which time closing can only occur 30 days following receipt of the additional information (barring a challenge to the transaction by the Commissioner).

    While the expectation was that the new merger review process would mirror the system in the U.S., the Bureau made clear through its subsequently released Merger Review Process Guidelines (described below) that, in certain cases, it will continue its review without issuing an SIR, notwithstanding the expiry of the 30-day waiting period. In such instances, the Bureau will generally seek the consent of the parties to delay implementation of the transaction until a designated date or milestone.
  • Increased Merger Notification Thresholds. The monetary size of transaction threshold for mandatory merger notification increased from $50 million to $70 million. The threshold will be reviewed annually and may be adjusted each January based on changes in Canada's GDP. For 2010, it was expected that the threshold would actually decrease slightly due to economic contraction in 2009 but the Minister of Industry took no action to adjust the threshold in January 2010.
  • Reduced Merger Review Limitation Period. The amendments reduce the three-year period during which the Commissioner may challenge a completed merger to only one year.

Abuse Of Dominance

  • Introduction Of Administrative Monetary Penalties For All Abuse Cases. The Tribunal can now impose administrative monetary penalties of up to $10 million for corporate violations of the abuse of dominant position provision, and $15 million for each subsequent violation. Such penalties were previously restricted to conduct by a domestic airline.
  • Airline Industry. All abuse of dominance provisions dealing specifically with the airline industry have been repealed.

Misleading Advertising And Deceptive Marketing Practices

  • Targeted Individuals Outside Canada. The amendments extend the false and misleading advertising and deceptive marketing practices provisions to apply to companies targeting individuals who are outside Canada.
  • Clarifications. The amendments provide that in false or misleading advertising proceedings, it is not necessary to establish that the impugned representation was made to the Canadian public or was made in a place accessible to the public. The "general impression test"—that the general impression and literal meaning will be considered in assessing if a representation is reviewable—applies to the deceptive marketing practices outlined in sections 74.01 and 74.02.
  • Increased Penalties. The amendments increased maximum jail terms from five to 14 years for criminal offences. Administrative monetary penalties of up to $10 million ($15 million for subsequent violations) can be imposed by the Tribunal for civilly reviewable false and misleading advertising and deceptive marketing practices by corporations.

Other Important Amendments

  • Price Discrimination And Predatory Pricing. The amendments repeal the criminal provisions dealing with price discrimination, promotional allowances and predatory pricing.
  • Resale Price Maintenance. The criminal resale price maintenance provision has been repealed and replaced by a new civil price maintenance provision to address this practice when it has an anti-competitive effect. There is now a right of private-party access to the Tribunal for price maintenance. This change will allow firms that do not have a dominant position greater flexibility in establishing their pricing programs, including (in appropriate circumstances) participating in minimum advertised pricing (or "MAP") programs that are common in the United States.
  • Increased Penalties For Obstruction And Contraventions Of Section 11 Court Orders. The amendments introduce penalties of up to 10 years' imprisonment and increased fines (from $50,000 up to $100,000) or both, for obstruction in connection with an inquiry or examination under the Act. The amendments also increased sanctions for contraventions of section 11 orders to imprisonment of up to two years and fines in the discretion of the court or both.
  • Amendments To Canada's Foreign Investment Laws. The Investment Canada Act was also amended to increase the threshold for review (to $1 billion over five years based on the enterprise value of the acquired assets), introduce a national security test and review procedure, and implement other substantive and procedural amendments. The national security review system is now in effect, but the change to enterprise value and the increase in the threshold have not yet been implemented.

GUIDELINES AND BULLETINS

The Bureau released a number of publications in 2009, both in draft for public consultation and final form. Highlights include:

Merger Review Process Guidelines

In September, the Bureau published its final Merger Review Process Guidelines, which describe the Bureau's approach to Canada's new merger review regime. Highlights include:

  • The Importance Of Cooperation: Throughout the Guidelines, the Bureau makes an express and repeated commitment to minimize the burden of SIRs on merging parties, and stresses that its preferred approach is cooperation. The Bureau will be open to dialogue with the parties before issuing a SIR and will also discuss how the issues or scope of production can be narrowed after a SIR has been issued.
  • Initial Review Period: The Guidelines provide that the Bureau will, as soon as possible during the initial review period, communicate preliminary views on potential competition issues identified to that point in time. Where appropriate, the waiting period will be terminated early by issuance of a no-action letter. Parties are encouraged to assist in the review of transactions by engaging in early consultations with the Bureau and by responding to requests for information in a timely manner (including requests for voluntary responses made within the initial 30-day period), to identify potential issues with the transaction and to substantiate claims regarding applicable factors or exceptions upon which the parties intend to rely.
  • Supplementary Information Requests: Canada's new, two-stage merger review process allows the Commissioner to issue a SIR within the initial 30-day waiting period. The Guidelines, in fact, confirm that the Bureau does not expect to use the SIR mechanism frequently and that SIRs will be tailored and limited in scope in all but exceptional circumstances.
  • Post-Supplementary Information Request Waiting Period: The Guidelines confirm that the SIR 30-day waiting period will begin upon receipt by the Commissioner, from each recipient, of "a complete response to all information requests set out in the SIR," without providing many details as to what full compliance entails.
  • Timing Agreements: The Bureau, through the Guidelines and subsequent public comments, has made it clear that there will be a third category of transactions in Canada that may take longer than 30 days to review but for which the Bureau does not intend to issue a SIR. In those instances, to allow the waiting period to lapse, the parties will be expected to enter into a "timing agreement" with the Bureau pursuant to which they will typically agree to delay closing until the Bureau's review (or some other milestone) is completed and to cooperate in providing voluntary responses to the Bureau's additional information requests. The Guidelines note that these transactions will typically be those classified as "complex" on the Bureau's complexity classification system. In essence, these timing agreements would reinstate the past practice of many merging parties in "complex" transactions .

Competitor Collaboration Guidelines

The Bureau published the Competitor Collaboration Guidelines in December 2009 in anticipation of the impending significant change to the criminal conspiracy provision of the Act and the adoption of a reviewable practice regarding agreements among competitors. These changes take effect on March 12, 2010. At the time the amendments were announced, there was considerable anxiety expressed regarding where the line would be drawn between the application of the civil and criminal provisions. These Guidelines outline the Bureau's enforcement approach and focus on:

  • The Criminal Provision: The Guidelines discuss what constitutes an agreement under the criminal provisions, who is a competitor or a potential competitor, the types of prohibited agreements (those related to price-fixing, market allocation, or output restriction), and the statutory defences, including the defence that the agreement is ancillary to a broader or separate agreement, agreements between affiliates and regulated conduct.
  • The Civil Provision: The Guidelines also discuss what constitutes an agreement and who is a competitor with respect to the civil provision. The Guidelines then discuss examples of agreements that would typically be reviewable under the civil provision, including research and development agreements, joint production agreements, joint purchasing agreements and non-compete clauses. Ancillary agreements to broader, or separate agreements, will be reviewed under the civil provisions of the Act. In describing the threshold at which an agreement would be considered to be anticompetitive, the Guidelines refer to the analytical framework set out in the MEGs. The Guidelines then describe available defences and exceptions, including the efficiency exception (which is consistent with the efficiency analysis in the mergers context).
  • The Bureau's Decision To Review A Matter Under The Criminal Or Civil Provisions: Once the Bureau has communicated its decision to review a matter under the civil provision to the parties involved, it will not refer the same or substantially similar matter for criminal prosecution. The Guidelines include some hypothetical examples of situations in which the Bureau would or would not pursue enforcement measures under either the civil or criminal track.

While these Guidelines are by necessity an advance description of the Bureau's enforcement plan, rather than a reflection of past and current Bureau practice, they provide some insight into the Bureau's approach to these new laws.

Draft Guidelines On Abuse Of Dominance

The Bureau released for public comment a draft of its Enforcement Guidelines on the Abuse of Dominance Provisions in January 2009. These Draft Guidelines do not contain major changes to the general enforcement framework for abuse of dominance, but expand on issues raised by the Federal Court of Appeal in the Commissioner of Competition v. Canada Pipe Company Ltd., the only significant abuse of dominance case since the original guidelines were issued in 2001. In particular, the update does provide some helpful guidance to businesses in understanding how the Bureau will interpret Canada Pipe with respect to assessing anti-competitive intent, valid business justifications, and the "but for" test for the substantial lessening or prevention of competition. Likewise, the expanded discussion of exclusive dealing, tied selling and bundling will offer clarity to businesses when structuring their distribution practices. The final Guidelines are expected to be published early in 2010.

Draft Information Bulletin On Sentencing And Leniency In Cartel Cases

The Bureau engaged in a second round of consultation on these draft Guidelines, which describe the Bureau's approach to sentencing and leniency for cartel participants who do not qualify for immunity. The draft was released in March 2009, with final Guidelines expected to be published in 2010.

Bulletin On Efficiencies In Merger Review

The Bureau published the final version of its Bulletin on Efficiencies in Merger Review in March 2009. Although the Bureau's existing Merger Enforcement Guidelines ("MEGs") generally describe the Bureau's analytical framework in assessing efficiencies, the Bulletin is intended to build upon the MEGs by providing practical guidance on the Bureau's enforcement approach to efficiencies in merger review.

Guidelines On Consumer Rebate Promotions

The Bureau published Enforcement Guidelines on Consumer Rebate Promotions in December 2009. These Guidelines explain the Bureau's approach to interpreting the false or misleading representations provisions of the Act, the Consumer Packaging and Labelling Act and the Textile Labelling Act in the area of consumer rebate promotions. They also describe some best practices when offering rebates.

Enforcement Guidelines Relating To "Product Of Canada" And "Made In Canada" Claims

The Bureau published its Enforcement Guidelines on "Product of Canada" and "Made in Canada" Claims in December 2009. These Guidelines describe the Bureau's approach in assessing "Product of Canada" and "Made in Canada" claims for nonfood products under the false or misleading representations provisions of the Act, the Consumer Packaging and Labelling Act and the Textile Labelling Act.

The new Guidelines provide a more detailed description of how the Bureau will evaluate labelling. The Guidelines take effect on July 1, 2010. During the interim period, the Bureau's approach to enforcement will be based on the previous Guide to "Made in Canada" Claims.

Multi-Level Marketing Plans And Schemes Of Pyramid Selling — Sections 55 And 55.1 Of The Competition Act:

This Bulletin describes the nature of, and the differences between, a multi-level marketing plan and a scheme of pyramid selling as outlined in sections 55 and 55.1 of the Act. It also describes the general principles and policies applied by the Bureau with respect to these provisions. It is unchanged from the draft circulated for public consultation in 2008.

Guidance On Labelling Textile Articles Derived From Bamboo:

These Guidelines, released in March 2009, clarify the proper labelling of textile articles derived from bamboo. Following marketplace monitoring, the Bureau announced in January 2010 that more than 450,000 textile articles have been re– labelled and over 250 Web pages corrected as a result of its efforts to ensure that textile articles derived from bamboo are accurately labelled and advertised.

The Bureau also released updated versions of the following bulletins or guidelines to reflect the decriminalization of various provisions of the Act, new remedies and increased penalties introduced by the 2009 amendments:

  • Bulletin on the Immunity Program under the Competition Act (August 2009);
  • Enforcement Guidelines on Ordinary Price Claims (October 2009);
  • Enforcement Guidelines on the Application of the Competition Act to Representations on the Internet (October 2009);
  • Enforcement Guidelines on Promotional Contests — Section 74.06 of the Competition Act (October 2009);
  • Enforcement Guidelines on Telemarketing — Section 52.1 of the Competition Act (October 2009); and
  • Enforcement Guidelines on the Deceptive Notices of Winning a Prize — Section 53 of the Competition Act (October 2009).

ENFORCEMENT ACTIVITY

Mergers

Despite the decrease in mergers and acquisitions activity in Canada and globally in 2009, there were still a number of significant transactions reviewed by the Bureau in 2009. Many of the merger review process changes introduced by Bill C-10 have been implemented, and the general consensus is that the Bureau has demonstrated a willingness to be cooperative and flexible in its approach to the use of its new powers. As of mid-September 2009, the Bureau confirmed that it had used its new power to request additional information through SIRs in five transactions.

In each of the following major transactions reviewed by the Bureau in 2009, remedies were required and were embodied in consent agreements filed with the Tribunal:

  • Agrium's Proposed Acquisition Of CF Industries: In the event that Agrium's unsolicited bid is successful, the Bureau will require the divestiture of a nitrogen-based fertilizer production facility and that Agrium must supply product to a new entrant.
  • Merck & Co., Inc. And Schering-Plough Corporation: The Bureau required divestitures related to human health products and animal health products.
  • Pfizer Inc. And Wyeth: The Bureau required divestitures regarding animal health products.
  • Suncor And Petro-Canada: The Bureau required divestitures of 104 retail gas stations in southern Ontario, the sale of some storage and distribution network capacity in the Greater Toronto Area, and gasoline to be supplied to independent gasoline marketers. The Bureau later announced the names of buyers for the storage and distribution network capacity and for 98 retail gas stations, and noted that either: (i) arrangements had been made; or (ii) the sale process remained ongoing, for the remaining stations.
  • Clean Harbors, Inc. And Eveready, Inc.: The Bureau required the divestiture of a landfill in Alberta.

The following major transactions were reviewed in 2009 and either no action was taken by the Bureau or remedies were achieved without the need for a consent agreement:

  • BASF SE And Ciba Holding AG: The Bureau required divestitures for intangible assets, including intellectual property rights, related to certain speciality chemical products.
  • XL Foods Inc. And Tyson Foods, Inc.: The Bureau did not challenge this acquisition of a beef packing plant.
  • Dow Chemical And Rohm And Haas Company: The Bureau required a divestiture of some Canadian intangible assets relating to certain chemical products.
  • Labatt Brewing Company Limited And Lakeport Brewing Income Fund: The Bureau announced in January 2009 that it would not challenge this acquisition, two weeks shy of the second anniversary of the announcement of the transaction and approximately 21 months after the transaction had closed. This case is noteworthy because the Commissioner failed in her effort before the Tribunal (and a subsequent appeal) to obtain an injunction to delay closing, and was also heavily criticised by a Federal Court judge who, in a separate proceeding, quashed the court orders (also known as section 11 orders) compelling the production of extensive documentation from the parties.

Cartels

Combating cartel and bid-rigging activity remains a top enforcement priority for the Bureau. Among the major cases conducted in 2009 were:

  • Air Cargo: Following guilty pleas in this international conspiracy to fix the price of air cargo, British Airways Plc was fined $4.5 million, Qantas Airways Limited was fined $155,000, Société Air France was fined $4 million, Koninklijke Luchtvaart Maatschappij N.V. (KLM) was fined $5 million, and Martinair Holland N.V. was fined $1 million.
  • Quebec Gasoline Cartel: Eight individuals plead guilty to price-fixing in 2009 and received one or a combination of: requirements to make charitable donations of up to $20,000, up to 150 hours of community service and imprisonment of up to 12 months served in the community. Two other companies plead guilty in the same matter and were fined $90,000 and $600,000.
  • Saskatchewan Roofing Contractors Association: The Bureau obtained a prohibition order (a court order) requiring the association to inform the Commissioner immediately if it becomes aware of anti-competitive activity and to educate its members about bid-rigging and conspiracy offences.
  • Bid-Rigging In Government Of Canada Contracts: In February 2009, criminal charges were laid against 14 individuals and seven companies accused of rigging bids to obtain Government of Canada contracts for information technology services. One individual subsequently was fined $25,000, another donated $5,000 to charity following guilty pleas, and prohibition orders were issued against two companies. The preliminary hearing for those contesting the changes is scheduled for December 2010.
  • School Bus Operators: The Bureau obtained prohibition orders against 14 companies and 18 individuals operating school bus services in Newfoundland.

Abuse Of Dominance

The Bureau reached an agreement with Waste Services (CA) Inc. and Waste Management of Canada Corporation to prevent further abuse of these firms' jointly dominant position in commercial waste collection services in central Vancouver Island. These firms were foreclosing competition by using long-term contracts that included similar, and highly restrictive, terms such as automatic renewal clauses, liquidated damages (significant penalties for early contract termination) and rights of first refusal. The companies agreed to redraft their contracts in response to the Bureau's concerns. This remedy was contained in a consent agreement filed with the Tribunal.

Misleading Advertising

The Bureau was active in enforcing the misleading advertising provisions of the Act in 2009. Some notable cases included:

  • Record $15 Million Fine For Business Directory Scam: The Bureau announced that the Ontario Superior Court imposed this record fine against a business that targeted small and medium sized businesses. The founder and former president was sentenced to two years in jail, three years' probation, and a 10-year ban on telemarketing activities. Another senior manager received a two-year conditional sentence after cooperating with the investigation.
  • Cogeco Misleading Representations: The Bureau raised concerns that Cogeco was promoting its Internet services as being "the fastest" without having based such claims on fair comparisons. Cogeco responded to the Bureau's concerns by clarifying the representations in its advertising materials.
  • Commissioner Of Competition v. Premier Career Management Group Corp: The Federal Court of Appeal overturned the Tribunal and found that a career management firm misled the public in violation of the Act. This case is important in confirming that companies are prohibited from making misleading statements to consumers one at a time as well as making misleading statements to a group of consumers.
  • A Record $2 Million Fine: A deceptive marketing scheme resulted in a record fine of $2 million, double the revenue received from the conduct.
  • A Large Deceptive-Telemarketing Operation: "Operation Mirage" targeted 50 organizations and individuals in the Montréal area.
  • Increased Vigilance On Health And Environmental Claims: In a joint effort with Health Canada in November 2009, the Bureau warned Canadians against purchasing unauthorized products that claim to fight or prevent the H1N1 flu virus. In June 2009, the Bureau announced that it had secured commitments from seven Canadian hot tub and spa retailers who made materially false or misleading statements regarding the energy consumption of certain of their products. The companies used a variety of energy efficiency claims in the sale and promotion of hot tubs and spas, conveying the impression that the products were eligible for certification by the ENERGY STAR program; the Bureau determined they were not.

PRIVATE ACTIONS

Refusal To Deal

In August 2009, the Tribunal released its reasons dismissing an application by Nadeau Poultry Farm Limited, which would have forced Groupe Westco Inc., the largest chicken producer in New Brunswick, and two smaller producers, Groupe Dynaco and Volailles Acadia S.E.C., to continue selling their entire production of live chickens to Nadeau, despite the fact there was no supply contract between the parties.1

The decision clarifies the scope of the refusal to deal provision in section 75 of the Act that, in specific circumstances, may allow an applicant business to obtain an order forcing a supplier to accept it as a customer. The decision is important because it provides that even if a customer's business may be substantially affected by a refusal to deal, the Tribunal will not make an order forcing a supplier to accept the customer unless the customer is also able to prove that the refusal has an adverse effect on competition in the market.

This decision is currently under appeal.

Misleading Advertising: Comparative Claims

Two notable private actions concerning misleading advertising were launched in British Columbia in late 2009 between telecommunications companies. Telus Communications Co. successfully obtained an interlocutory injunction2 (upheld by the British Columbia Court of Appeal) to prevent Rogers Communications Inc. from continuing its advertising campaign claiming that its network was the "most reliable." Telus had recently upgraded its network making Rogers' advertised claim invalid. Telus claimed Rogers had breached section 52(1) of the Act, which prohibits false or misleading advertising, and sought damages under the private actions provision in section 36 of the Act. This case emphasizes the difficulties inherent in undertaking comparative advertising claims in Canada, particularly in an environment where a competitor's products continue to develop and change.

Rogers then made similar claims against BCE Inc. over Bell Canada's advertising claims that it was the "largest," "fastest," and "most reliable" wireless network. The British Columbia Supreme Court granted an interlocutory injunction prohibiting BCE from claiming it had the "most reliable" wireless network.

Competition/Intellectual Property Interface

In June 2009, Canada's Federal Court of Appeal addressed the issue of whether a patent settlement agreement could violate Canada's conspiracy laws.3 Consistent with past decisions, and the Bureau's enforcement approach, the Court of Appeal noted "that there must be 'something more' beyond the mere assertion of patent rights to sustain a finding of contravention of section 45 of the Competition Act."

The Court of Appeal upheld the lower court's finding that each step of the process followed by the parties was in keeping with the Patent Act and Federal Court Rules. As such, the Court of Appeal found that it "had some difficulty conceptualizing that an agreement effecting a remedy that was open to the court to grant and was placed before the court for its approval could constitute an offence under the Competition Act." However, the Court of Appeal left open the possibility there could be "circumstances where a settlement agreement could constitute the 'something more'" that is needed to support a conclusion the agreement violated the Act.

Price Fixing Class Actions

Two decisions released in 2009 by courts in Ontario and British Columbia that certified class actions alleging price fixing indicate the courts in Canada may be adopting a new approach to these types of claims, potentially opening the door to more litigation in this area. In November 2009, in Pro-Sys Consultants Ltd. v. Infineon Technologies AG,4 the British Columbia Court of Appeal reversed a lower court decision and certified a class proceeding involving allegations of a price-fixing conspiracy among producers of dynamic random access memory ("DRAM"), a memory chip used in computers and many other electronic devices. The Pro-Sys case was preceded by the decision handed down in September 2009 by Justice Rady of the Ontario Superior Court of Justice, in Irving Paper Limited et al. v. Atofina Chemicals et al.,5 certifying a class proceeding involving allegations of price fixing among producers of hydrogen peroxide. These are the first class actions based on a multilateral price-fixing conspiracy that have been certified in Canada when certification has been contested by the defendants. Until now, such cases had been certified as class actions only in the context of a consent certification in furtherance of a settlement.

Taken together, the Pro-Sys and Irving Paper decisions signal a possible shift in direction for price-fixing class actions in Canada. Not only are these two decisions inconsistent with prior jurisprudence on price-fixing class actions, but the suggested use of statistical evidence and aggregate assessment to determine liability absent proof of individual harm also appears inconsistent with the well-established principle that a class proceeding is a procedural mechanism only and should not affect the substantive legal rights of the parties. An appeal has already been filed in the Irving Paper case and leave to appeal to the Supreme Court of Canada has been sought in Pro-Sys. Given the inconsistency with earlier jurisprudence, until these appeals are heard and determined, the law in this area will remain somewhat uncertain. In the meantime, we expect class action plaintiffs' counsel will view these decisions as tilting the landscape in their favour, potentially resulting in an increase in litigation.

Footnotes

1. Nadeau Poultry Farm Limited v. Groupe Westco Inc. et al., 2009 Comp. Trib. 6, CT-2008-004.

2. 2009 BCSC 1610.

3. Laboratoires Servier v. Apotex Inc. [2008] F.C.J. No. 1094, 67 C.P.R. (4th) 241 (F.C.), aff'd [2009] F.C.J. No. 821, 2009 FCA 222

4. 2009 BCCA 503.

5. 89 OR (3d) 578.

About Ogilvy Renault

Ogilvy Renault LLP is a full-service law firm with close to 450 lawyers and patent and trade-mark agents practicing in the areas of business, litigation, intellectual property, and employment and labour. Ogilvy Renault has offices in Montréal, Ottawa, Québec, Toronto, and London (England), and serves some of the largest and most successful corporations in Canada and in more than 120 countries worldwide. Find out more at www.ogilvyrenault.com.

Voted best law firm in Canada two years in a row.
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however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

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