Davies partners Mark Katz and Elisa Kearney delivered a presentation on Canadian competition law highlights to the Antitrust Lawyers Study Group, Tokyo, Japan.
Presentation to Antitrust Lawyers Study Group. Tokyo, Japan
OUTLINE
- 1. Agreements with Competitors (Criminal/Civil/Class Actions)
- Mergers
- Unilateral Conduct and Pricing/Distribution Agreements
- Marketing Practices
- Advocacy/Regulatory Interventions by Competition Bureau
AGREEMENTS WITH COMPETITORS
Criminal Competitor Agreements (s.45) "Cartels"
- The Competition Act prohibits
agreements / arrangements with competitors to:
- Fix prices
- Allocate markets
- Control production or supply
- Limited defence ("ancillary
restraints")
- If agreement is ancillary to and reasonably necessary for a broader and separate legal agreement between the same parties
- No requirement to prove anti-competitive effects
- Fines: up to $25M; Prison: up to 14 years
Civil Agreements with Competitors (s. 90.1)
- Applies to agreements / arrangements
between competitors that are likely to prevent or lessen
competition substantially
- Efficiencies defence available
- Remedies:
- Prohibit person from doing anything under the agreement
- Require person to take any other action on consent
- Broad application, e.g. joint ventures, trade associations
- No limitation period – could capture long-standing arrangements similar to mergers (e.g., Commissioner's challenge to Air Canada/United JV)
Class Actions
- "Follow on" private actions
increasingly commonplace, typically in the form of class
actions
- Could be "follow on" to announcement of investigation or plea in Canada/abroad
- Notable recent examples of Canadian civil actions for conspiracy claims include high fructose corn syrup, hydrogen peroxide, air cargo, chocolate, DRAM/SRAM, aftermarket automotive lighting products
- Aggressive/innovative tort claims of common law conspiracy
- Provinces differ on class action litigation process and rules
Supreme Court of Canada Weighs in on "Indirect Purchaser" Claims
- Three decisions on antitrust claims
by indirect purchasers of Supreme Court of Canada held:
- Defendants cannot assert a "passing on" defence against direct purchasers (i.e., no damages because such purchasers just passed on the price increase) – remains to be seen how courts will protect against double recovery in damages awards
- Defendants Indirect purchasers can sue for damages under s. 36 of the Competition Act
- Low certification threshold for
plaintiffs to establish a methodology for proof of loss on a
class-wide basis – need to establish only "some basis in
fact"
- However, SCC raised prospect of re-visiting certification after discovery
- Unlike in U.S., no need to demonstrate predominance of common issues to obtain certification
- Lower thresholds in Quebec
- Need only an "arguable case" for establishing class-wide proof of loss, which typically does not even require expert evidence
- Quebec courts have jurisdiction over manufacturer whose products are sold to consumers in Quebec, even if the manufacturer is not present in Quebec and was not a party to contracts with Quebec consumers
Public Works Canada Nov. 2012 Integrity Policy
- Corporation disqualified from bidding if it or any of its affiliates (including foreign affiliates) has been convicted of specified offences, including s. 45 conspiracy
- Participants in Leniency Program no longer exempted
- No limitation period
- Exceptions to disqualification
- Public interest reasons (emergency, national security, health and safety, economic harm)
- Restoration of bidding capacity by Cabinet
- Suspension of criminal record – must complete sentence & abide waiting period to be eligible
- Calls for review of policy – perceived to be excessively harsh
To read this Presentation in full, please click here.
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.