Table of Contents

Chapter 1 Introduction And Overview: The Purpose Of Canadian

Competition Law 

Chapter 2 Institutional Overview and Statutory History

I. Enforcement Framework

1. Competition Enforcement Institutions
   1. Overview
   2. The Commissioner and the Competition Bureau
   3. The Director of Public Prosecutions
   4. The Competition Tribunal
   5. The Courts
2. The Enforcement Process
   1. The Conformity Continuum
   2. Reviewable Matters
   3. Criminal Offences
   4. Private Right of Action

II. Statutory History

1. Unsteady Beginnings: First Attempts at Regulating Combines
   (1889–1921)
2. Towards a Modern Competition Law (1923–1960s)
3. The Creation of a Modern Canadian Competition Law (1969–1986)
4. The Competition Act (1986–2008)
5. E. The 2009 Amendments

Chapter 3 Market Power and Market Definition

I. Introduction

1. Basic Concepts
2. Market Power and Market Definition

II. Market Definition

1. Product Market Definition
2. Geographic Market Definition
3. The Cellophane Fallacy

III. Market Share and Concentration

IV. The Role of Market Power in the Competition Act

1. Mergers
2. Strategic Alliances
3. Abuse of Dominance
4. Other Provisions
   1. Refusal to Deal
   2. Price Maintenance
   3. Exclusive Dealing, Tied Selling and Market Restriction

V. Conclusion

Chapter 4 Criminal Conspiracy

I. Introduction

II. Conspiracy — Section 45

1. What Constitutes a Conspiracy, Combination, Agreement or Arrangement?
   1. Agreement
   2. Evidence of an Agreement
   3. Conscious Parallelism and Tacit Agreements
2. Mens Rea of the Offence
3. Defences
4. Penalties and Consequences
5.  International Conspiracies — Jurisdiction Issues
   1. Subject Matter Jurisdiction
   2. Personal Jurisdiction

III. Foreign Directives to Implement a Foreign Conspiracy in Canada — Section 46

IV. Bid-Rigging — Section 47

V. Agreements Relating to Professional Sport — Section 48

VI. Financial Institutions — Section 49

VII. Related Offences

VIII. Canada’s Immunity and Leniency Programs

1. The Immunity Program
   1. Conditions for Grant of Immunity
   2. Steps in an Immunity Application
2. Leniency Program

Chapter 5 Non-Criminal Review Of Agreements Among Competitors

I. Introduction

1. The Amendments
2. The Competitor Collaboration Guidelines

II. Section 90.1

III. Elements

1.  Agreement or Arrangement
2. Between Competitors
3. Substantial Prevention or Lessening of Competition
   1. Market Definition and Market Share
   2. Safe Harbours
   3. Barriers to Entry or Expansion
   4. Other Factors

IV. Defences And Exceptions

1. Efficiency Defence
   1. Burden of Proof
   2. Measuring Efficiencies
   3. Measuring Anti-Competitive Effects and Balancing them against Efficiencies
2. Federal Financial Institutions and the Canada Transportation Act
3. Agreements Relating Only to Exports
4. Specialization Agreements
5. Agreements Between Affiliates
6. Proceedings Commenced Under Sections 45, 49, 76, 79 or 92

V. Remedies

VI. Types Of Agreements Or Arrangements That Will Likely Be Reviewed Under Section 90.1

1. Relationship to other Provisions of the Act
2. Commercialization and Joint Selling
3. Information Sharing
4. Research and Development
5. Joint Production
   1. Agreement between Competitors
   2. Restraints on Competition
   3. Incentive or Ability to Compete Independently
   4. Market Power
6. Buying Side Agreements
   1. Defining the Upstream Market
   2. Monopsony Power and Likely Exercise of Monopsony Power
7. Non-Compete Clauses

VII. Overview Of Section 90.1 Enforcement

1. Air Canada and United Continental
   1. Orders Sought Under Both Sections 90.1 and 92
   2. Market Definition
   3. The Commissioner’s Economic Theory
   4. Response from Air Canada and United Continental
   5. Consent Agreement
2.  E-books, TREB and Pharmaceutical Patent Litigation Settlements
   1. Ebooks
   2. Tribunal Comments in TREB Order
   3. Patent Litigation Settlement Agreements and Section 90.1

VIII. Conclusion

Chapter 6 Refusal to Deal

I. Introduction

II. The Statutory Provision

III. Essential Elements of Refusal to Deal

1. Product Market
2. Geographic Market
3. Substantially Affected or Precluded from Carrying on Business
4. Usual Trade Terms
5. Anywhere in a Market
6. Insufficient Competition
7. Ample Supply
8. Adverse Effect on Competition
9. Discretion

IV. Refusal to License in Intellectual Property

V. Remedial Powers and Enforcement

1. A. Remedial Powers of the Tribunal
2. B. Private Enforcement and the Threshold for Leave

VI. Comparison with Foreign Antitrust Regimes

VII. Monopoly Leveraging and the Single Monopoly Profit Critique

VIII. Conclusion

Chapter 7 Price Maintenance

I. Introduction

1. Purpose and Scope
2. Legislative History

II. Elements of Resale Price Maintenance

1.  Persons Covered
2. Elements of the Conduct
   1. Supply of a Product for Resale
   2. Direct or Indirect Influence on Price
   3. By Agreement, Threat, Promise or Like Means
      1. Agreement
      2. Threat or Promise
      3. Any Like Means
   4. Adverse Effect on Competition in a Market
3.  Suggested Selling Prices
4. Horizontal Price Maintenance

III. Refusal to Supply Because of Low Pricing Policy

1. A. Elements of the Conduct
   1. Direct or Indirect Refusal to Supply
   2. Because of the Low Pricing Policy
   3. Adverse Effect on Competition in a Market
2. B. Exceptions and Defences
   1. Loss Leaders
   2. Bait and Switch Selling
   3. Misleading Advertising
   4. Inadequate Service

IV. Inducing a Supplier to Refuse to Deal

1. Persons Covered
2. Elements of the Conduct

V. Tribunal Orders

VI. Comparison with Other Jurisdictions

1. United States
2. European Union

Chapter 8 Exclusive Dealing, Tied Selling, Market Restriction and the Remaining Reviewable Practices

I. Introduction

II. Restrictions on Distribution — Section 77

1. Common Principles and Rationale
2. Exclusive Dealing
   1. 1. Definition and Elements
      1. Practice
      2. By a Supplier of a Product
      3. Exclusivity as Condition of Supply
      4. Exclusivity as an Incentive
   2. Market Power or Prevalence Requirement
   3. Exclusionary Effects
   4. Substantial Lessening of Competition
   5. Exemptions
   6. Remedies
      1. Final
      2. Interim
3. C. Tied Selling
   1. 1. Definition and Elements
      1. Two Products
      2. Practice by a Supplier of a Product
      3. Condition of Supply or Inducement
   2. Market Power, Exclusionary Effects and Substantial Lessening of Competition
   3. Exemptions
   4. Remedies
4. D. Market Restriction
   1. Definition and Elements
   2. Market Power and Competitive Effect
   3. Exemptions
   4. Remedies
5.  Relationship to Abuse of Dominance
6. Private Proceedings

III. Delivered Pricing — Sections 80 and 81

1. Rationale
2. Definition and Elements
   1. Definition
   2. Elements
   3. Exceptions
3. Remedies

IV. Foreign Judgments, Laws and Directives — Sections 82 and 83

1.  Rationale
2.  Elements of Section 82
   1. Judgment, Decree or Order
   2. Adverse Effects
   3. Remedies
3.  Elements of Section 83
   1. Decisions Made
   2. Implementation of Foreign Law or Directive Pertaining to a Foreign Law
   3. Communications to Implement Foreign Conspiracy
   4. Remedies
   5. Discrimination by a Foreign Supplier — Section 84

Chapter 9 Abuse of Dominance

I. Introduction

II. Enforcement

III. Elements

1. Control
2. Practice of Anti-Competitive Acts
3. Substantial Prevention or Lessening of Competition

IV. Remedies

V. Defences and Exemptions

Chapter 10 Merger Notification

I. Introduction

II. Legislative History

III. Notifiable Transactions

1. Categories of Transactions That Are Notifiable
2. Notification Thresholds
   1. Size of the Parties Threshold
   2. Size of the Transaction Threshold
      1. Asset Acquisition
      2. Acquisition of Voting Shares of a Corporation
      3. Amalgamation
      4. Formation of a Combination
      5. Acquisition of an Interest in a Combination
3. Measurement of Assets and Revenues
   1. Calculation of Assets and Revenues
   2. Subsequent Events
4. General Exemptions
5. Specific Exemptions
   1. Acquisition of Voting Shares, Assets or Interests
   2. Combinations That Are Joint Ventures

IV. To Whom Does the Obligation to Notify Apply?

V. Notification Procedure

1. Methods of Fulfilling or Avoiding Pre-Merger Notification
   1. Advance Ruling Certificate Applications
   2. Subsection 113(c) Waiver
   3. Relief for Fluctuating Interests and Staged Acquisitions
   1. Unsolicited Takeover Bids
   2. Prescribed Information for Notification
   3. Optional Information: Competitive Impact Statement
   4. Supplementary Information Requests
   5. Amendment to Proposed Transaction Triggering Requirement for a New Notification or ARC Request
2. Filing Fees
3. Statutory Waiting Periods
4. Competition Bureau Service Standards
5. Limitation Period
6. Confidentiality Protection
7. Failure to Comply
8. Transaction Documents
9. Non-notifiable Transactions

VI. Interaction With Other Regulatory Regimes

1. Investment Canada Act
2. Canada Transportation Act
3. Foreign Competition/Antitrust Agencies

VII. Disposition

1. Advance Ruling Certificate
2. Waiver
3. No-Action Letter
4. Other

VIII. Interim Orders

1. Section 100 of the Competition Act
2. Section 104 of the Competition Act

IX. Limitation Periods

X. Notification Strategy

XI. Information Resources

Chapter 11 Substantive Merger Review

I. Introduction to the Statutory Framework

1. Principal Substantive Test and Remedial Powers of the Tribunal
2. Exceptions and Limitations
3. Assessment Criteria
4. Remedies in Contested Cases
5. Preliminary and Interim Injunctions
6. Advance Ruling Certificates
7. Consent Agreements

II. Substantial Lessening or Prevention of Competition

III. Market Share and Concentration Levels

IV. Theories of Anti-Competitive Effects

1. Unilateral Effects
2. Coordinated Effects
3. Non-Horizontal Mergers

V. The Efficiency Exception

1. Overview
2. Cognizable Efficiencies
3. ‘Effects’ of Any Prevention or Lessening of Competition
4. The Trade-off Framework

VI. The Merger Review Process

1. The Content and Timing of Substantive Submissions
2. Coordination with Foreign Counsel

Chapter 12 Misleading Advertising and Marketing Practices

I. Introduction

II. Civil Deceptive Marketing Practices

1. Misrepresentations to the Public
   1. Misleading Advertising
   2. Misleading Electronic Messages
   3. Claim Substantiation
   4. Warranty and Serviceability Claims
2. Ordinary Price Claims
   1. Statutory Tests
   2. Ordinary Selling Price Investigations
3. Tests and Testimonials
4. Bargain Prices/Bait and Switch Selling
5. Sale Above Advertised Price
6. Promotional Contests

III. Criminal Misleading Advertising and Marketing Practices Offences

1. False or Misleading Representations
   1. Generally
   2. Misleading Electronic Messages
2. Double Ticketing
3. Telemarketing
4. Deceptive Notice of Winning a Prize
5. Multi-Level Marketing Plans and Pyramid Selling

IV. Online and Mobile Advertising

V. Administration and Enforcement

1. Criminal Track
2. Civil Track

VI. Conclusion

Chapter 13 Common Law Conspiracy and Other Economic Torts

I. Introduction

II. Civil Conspiracy

1. Introduction
2. Elements of Civil Conspiracy to Injure
   1. An Agreement Between Two or More Persons
   2. Predominant Purpose
   3. Damages
3. Elements of Civil Conspiracy by Unlawful Means
4. Potential Defences
5. Continued Evolution of the Tort of Civil Conspiracy

III. Unlawful Interference with Economic Interests

1.  Introduction
2. Elements of Unlawful Interference with Economic Interests
   1. Interference with Plaintiff’s Trade or Business
   2. Unlawful Means
   3. Intent to Injure
   1. Damages
3. Potential Defences
4. Continued Evolution of the Tort of Unlawful Interference with  Economic Interests

IV. Unlawful Restraint of Trade

1. Introduction
2. General Test for Enforceability
3. Reasonable With Regard to the Parties’ Interest
4. Reasonable With Regard to Public Interest
5. Remedies

V. Conclusion

Chapter 14 Private Applications to the Competition Tribunal

I. Introduction

II. Obtaining Leave

1. Leave Process
2. Leave Threshold
3. Leave Ruling

III. Hearing the Application

IV. Remedies

1. Injunctive Relief
2. Damages

V. Consent Agreements

VI. Costs

VII. Conclusion

Chapter 15 Powers of Investigation

I. Introduction

II. Powers of Investigation Under the Competition Act

1. Inquiry
2. Section 11 Orders
3. Section 15 Search Warrants
   1. Availability and Scope
   2. Practical Issues that Arise During Searches
4. Part VI of the Criminal Code — Interception of Private Communications

III. Information Sharing

Chapter 16 The Intellectual Property and Regulated Conduct Interface with Competition Law

I. Introduction

II. Intellectual Property and Competition Law Interface

1. Intellectual Property
2. Relationship between Intellectual Property Law and the Competition Act
3. Intellectual Property Enforcement Guidelines
   1. Analytical Principles
      1. Markets
      2. Market Power
      3. Anti-competitive Effects
      4. Efficiencies
   2. Enforcement Principles
4. The Application of the General Provisions of the Competition Act to Conduct Involving IP Rights
   1. Criminal Conspiracies — Section 45
      1. Licensing Agreements
      2. Patent Pools and Cross-Licensing
      3. R&D Cooperation
      4. Transfers and Assignments
      5. Patent Litigation Settlement Agreements
   2. Civilly Reviewable Practices
      1. Section 75 — Refusal to Deal
      2. Section 76 — Price Maintenance
      3. Section 77 — Vertical Restraints: Exclusive Dealing, Tied Selling, Market Restrictions
         1. Exclusive Dealing
         2. Tying
         3. Market Restriction
      4. Section 90.1 — Agreements Amongst Competitors
         1. Licensing
         2. R&D Cooperation Agreements  
         3. Joint Production Agreements
         4. Commercialization and Joint Selling  Agreements
         5. Information Sharing Agreements
         6. Ancillary Restraints
         7. Patent Litigation Settlement Agreements
      5. Section 79 — Abuse of Dominance
      6. Sections 91 and 92 — Mergers
5. Section 32 — Special Remedies for Conduct Involving IP Rights
6. Treatment of IP and Competition Law Interface in Other Jurisdictions

III. The Regulated Conduct Doctrine

1. Introduction
2. General Principles
3. Conflicts between Federal Competition Laws and Provincial Regulatory Regimes
   1. Regulated Conduct Doctrine
   2. Regulated Conduct Doctrine and Criminal Provisions of the Competition Act
   3. Regulated Conduct Doctrine and Civilly Reviewable Matters Provisions of the Competition Act
4. Conflicts between Federal Competition Laws and other Federal Laws

Chapter 17 Private Litigation and Class Actions

I. Introduction

II. Evolution of Private Litigation in Canadian Competition Law

III. Essential Principles of Private Litigation for Anti-Competitive Conduct

1. Statutory Cause of Action — Section 36 of the CompetitionAct
   1. Components of a Section 36 Claim
      1. Proscribed Conduct
      2. Damages
   2. Evidentiary Burden, Presumptions and Privilege
   3. Competent Court
   4. Limitation Period
   5. Available Remedies
2. Common Law Regimes

IV. Competition Class Actions

1. Introduction
2. Overview of Class Action Legislation
3. Typical Issues in Competition Class Actions
   1. Jurisdiction
   2. Multiple Competing Plaintiffs
   3. National Class
   4. Access to Discovery in the U.S. Action for Purposes of the Canadian Action
   5. 5.Motion for Certification Decisions

Chapter 18 Foreign Investment Reviews

I. Overview

II. Legislative History

1. The Foreign Investment Review Act
2. The Investment Canada Act
3. Millennial Reform

III. Review of Foreign Investments Under the Investment Canada Act

1. Application of the Investment Canada Act
   1. Meaning of ‘‘non-Canadian”
   2. Meaning of ‘‘Business” and ‘‘Canadian Business”
   3. Acquisition of Control
      1. General Rules
      2. Control in Fact Determinations for Cultural Businesses
   4. Establishment of a New Canadian Business
2. B. Review Thresholds
   1. The General Case
   2. Cultural Businesses
   3. National Security
3. C. Net Benefit to Canada
   1. Generally
   2. Rejected Transactions
4. Review Process and Timing
5. Undertakings

IV. Acquisitions by State-Owned Enterprises

1. Meaning of State-Owned Enterprise
2. Control in Fact by an SOE
3. Net Benefit Assessment in Investments Involving SOEs

V. Penalties and Remedies

VI. Conclusion

Appendix — Price Discrimination, Predatory Pricing and Promotional Allowances

I. Introduction

II. Secondary-Line Price Discrimination

1. The Provision and Its Elements
2. Secondary-Line Price Discrimination Was a Per Se Offence
3. Analysis of the Constituent Elements of Paragraph 50(1)(a)
   1. Sale of an Article to a Purchaser at a Preferential Rate of Discount, Rebate, Allowance, Price Concession, or Other Advantage
   2. Availability to Purchaser’s Competitors; Definition of “Competitors”
   3. Like Quantity and Quality
   4. The Discrimination Had to Be a Practice
   5. Group Buyers
4. Penalty
5. The Case Law

III. Regional Price Discrimination

1. The Provision and Its Elements
2. The Case Law
3. Analysis of the Constituent Elements of Paragraph 50(1)(b)
   1. The Nature of Primary-Line Price Discrimination
   2. Selling Products in Different Areas
   3. Different Prices
   1. Engaged in a Policy
   2. Effect or Tendency of Substantially Lessening Competition or Eliminating a Competitor
4. Penalty

IV. Predatory Pricing

1. The Provision and Its Elements
2. Analysis of the Constituent Elements
   1. Selling Products at Unreasonably Low Prices
      1. Step One: Assessment of Market Share
      2. Step Two: Price/Cost Methodology
   2. Sale of “Products”
   3. Engaged in a Policy
   4. Effect or Tendency of Substantially Lessening Competition or Eliminating a Competitor
      1. Effect on Primary-Line Competitors
      2. “Substantially” Lessening Competition or Eliminating a Competitor
3. Penalty

V. Promotional Allowances

1. The Provision and Its Elements
2. Analysis of the Constituent Elements
   1. Allowance for Advertising or Display Purposes
   2. Allowance Must Be Collateral and Not Apply to the Selling Price
   3. Allowances Had to Be Offered Proportionately to Competing Purchasers
3. Penalty

Appendix 2 — Competition Act

Appendix 3 — Competition Tribunal Act

Appendix 4 — Notifiable Transactions Regulations

Appendix 5 — Merger Notification Form

Appendix 6 — Merger Notification Certificate

Selected Bibliography

Index