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Competition and Antitrust - On the Docket
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Recent years have seen a wave of reforms to the Competition Act being discussed and implemented. That wave has become a veritable tsunami with omnibus legislation introduced in Parliament in November 2023. That legislation proposes a number of fundamental changes to the Competition Act, which have the potential to dramatically impact Canadian businesses. While a detailed discussion of all of the amendments is beyond the scope of this blog post, perhaps the most interesting thing to litigators and businesses concerned about litigation risk, is the creation of what may prove to be a kind of pseudo-class action regime before the Competition Tribunal that ultimately allows consumers to recover losses as a result of certain types of reviewable conduct.
Historically, many class actions practitioners considered certification the primary fight in a case. It was common that cases would settle not long after certification, so the whole ballgame was perceived to be in the certification motion. Yet with the courts consistently reaffirming the low bar for certification, we are seeing a greater number of class actions determined on their merits after certification. And as the recent case of Rebuck v Ford Motor Company shows, success on certification is by no means a guarantee of success on the merits.
On February 8, 2022, the Competition Bureau released several recommendations for amending the Competition Act in its response to Senator Wetston’s call for submissions on Canada’s competition policy framework. The paper, entitled “Examining the Canadian Competition Act in the Digital Era”, identifies areas that the Competition Bureau believes are ripe for modernization. The paper, and Senator Wetston’s request for submissions, occur during a time when the federal government has indicated an openness to amending the Competition Act. While nothing in the Bureau’s submission has the force of law, the Bureau’s views on these matters will undoubtedly be taken very seriously, and some of the amendments the government is already considering mirror those in the Bureau’s submission. Consequently, the Bureau’s paper provides insight into the future direction of competition law in Canada.
The Competition Bureau’s focus on greenwashing continues to grow. This past week, the Bureau announced in a news release that it had reached a $3 million settlement agreement with Keurig Canada Inc. in respect of concerns over misleading and false claims about the recyclability of its single use Keurig K-Cup Pods. The agreement marks a growing trend in enforcement activities against “greenwashing”, the practice of making false or misleading environmental ads or claims about a product’s environmental benefits.
Many price-fixing class actions allege a reasonably uniform conspiracy. The stereotypical scenario alleged is that executives from different companies meet in a dark, smoke-filled room and agree to raise prices or restrain output in some uniform fashion. While that is an oversimplification, and reality is always much more complex, the basic core of most price-fixing allegations is that there was a uniform conspiracy that impacted all, or at least most, consumers in a broadly similar way. This is what has made so many price-fixing class actions amenable to certification.
Laws against price-gouging have come to Ontario. On Saturday, March 28, 2020, the provincial government issued a press release announcing that it was enacting an Order to prohibit price-gouging. The press release announced that that Order “prohibits persons, including retailers, from selling necessary goods for unconscionable prices”. The press release also announced that the definition of unconscionable prices would be “consistent with well-established principles from the Consumer Protection Act.”
The rapid spread of the novel Coronavirus (COVID-19) is causing significant dislocation to every aspect of our daily lives. For businesses, COVID-19, and the public health responses being taken to try to limit its spread, will have a significant financial impact. Social distancing and self-isolation will result in fewer customers visiting brick-and-mortar retailers, and uncertain economic times will result in an overall drop in consumer demand. Each of these will cause pain for businesses.
On September 20, 2019, the Supreme Court released its long-awaited decision in Pioneer Corp v Godfrey. Godfrey is the Supreme Court’s latest decision involving price-fixing class actions, and expands on and clarifies the basic approach to these cases that the Court laid out six years ago in Pro-Sys Consultants Limited v Microsoft Corporation.
Certification is a vital step in every class action. In order for a class action to be certified, the proposed representative plaintiff must show “some basis in fact” to believe that the certification requirements are met. These requirements include that there are common issues of fact or law and that a class action would be the preferable procedure for resolving those common issues. The Supreme Court of Canada was clear in its decision in Pro-Sys Consultants Ltd v Microsoft Corporation that the some basis in fact standard is less onerous than a balance of probabilities standard. However, how that standard is to be applied remains a source of great difficulty for courts.
March 2019 has been a busy month for the Competition Bureau. On March 7, the Bureau released its updated Abuse of Dominance Enforcement Guidelines. Then, on March 13, the Bureau released its updated Intellectual Property Enforcement Guidelines (“IPEGs”). While neither new enforcement guideline reflects a fundamental shift in the Bureau’s approach to these issues, they provide new guidance and reflect important nuances in the Bureau’s consideration of these issues, particularly regarding abuse of dominance.
