Canada: Bill C-23 Receives Royal Assent

On June 4, 2002, Bill C-23, an act to amend the Competition Act and the Competition Tribunal Act, became law. The Bill introduces some very significant changes to Canadian competition law, some of which are highlighted below:

Until now, only the Commissioner of Competition has been permitted to bring applications before the Competition Tribunal in respect of reviewable practices such as mergers, tied selling, refusals to deal, etc. As a result of Bill C-23, private individuals will have the right to seek relief directly from the Competition Tribunal. The right is quite limited insofar as:

• it will only be available with respect to the practices described in Sections 75 and 77 of the Competition Act (i.e., exclusive dealing, tied selling, market restriction and refusal to deal and not, significantly, mergers);
• a prospective applicant will be required, as a first step, to obtain "leave" of the Tribunal to bring a case;
• in granting leave, the Tribunal must believe that the applicant’s business is directly and substantially affected by the relevant anticompetitive practice; and
• the Tribunal will not grant leave if the Commissioner of Competition has started an inquiry or settled the matter.

The Competition Tribunal will thus act as the "gatekeeper" and try to weed out cases which have no merit, or which have been commenced for other than bona fide reasons.

The circumstances under which the Commissioner can obtain an interim order prohibiting anti-competitive conduct in advance of obtaining a final order on the merits have until now been quite limited. The new Section 103.3(2) now specifies the circumstances under which an interim order will be available to prevent the continuation of certain types of conduct, such as refusal to deal, consignment selling, exclusive dealing, tied selling, market restriction and abuse of dominant position. The Commissioner will be able to obtain the interim order if:

• injury to competition will occur that cannot adequately be remedied by the Tribunal through a final order;
• a person is likely to be eliminated as a competitor;
• a person is likely to suffer:

- a significant loss of market share;

- a significant loss of revenue; or

- other harm that cannot be adequately remedied by the Tribunal.

An interim order will be effective for ten days. The Commissioner will have the right to apply, on 48 hours notice to the affected parties, to extend the interim order for two periods of up to 35 days each. A person against whom an interim order is made will have ten days to apply to the Tribunal to have the order set aside or varied.

Bill C-23’s "deceptive notice of winning a prize" provision creates a new criminal offence that prohibits the sending of a notice that gives the recipient the general impression that he or she has won a "prize" and gives the recipient the option to pay money or incur a cost in order to obtain the prize.

The amendments create a new framework to facilitate co-operation between the world’s competition authorities. These provisions will enable the Commissioner to request formal assistance from foreign states in obtaining and transmitting evidence located abroad in noncriminal competition matters such as abuse of dominant position.

These are just some of the more significant amendments to the Competition Act made by Bill C-23. For more information contact any member of the Goodmans Competition Law Group.