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Competition and Antitrust - On the Docket
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It says something about Canada that many famous cases throughout Canadian legal history relate to the regulation of alcohol. Through the early 20th century, the regulation of alcohol was a fertile domain for disputes about Canadian federalism. Now, in the 21st century, the complicated regulatory scheme of governing alcohol sales in Ontario is once again making new law. This time, however, the dispute is not over arcane principles of federalism, but rather over the scope of the regulated conduct defence to conspiracies under the Competition Act. While early 20th century federalism cases may be of interest to only a select few, the decision of the Ontario Superior Court of Justice in Hughes v Liquor Control Board of Ontario is likely to attract significantly broader interest, particularly among companies operating in regulated industries.
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.
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.”
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.
While competition law specialists are familiar with the ongoing debate about umbrella purchaser claims, most Canadian lawyers could be forgiven for wondering what all the fuss is about umbrellas. Far from being individuals who rejected raincoats or ponchos in favour of a more traditional option, umbrella purchasers are now at the center of a heated debate in Canadian competition law.
Using rules of thumb to generate estimates can be very useful in a variety of circumstances: for example, when the detailed information necessary to generate a precise answer is unavailable, or when it’s too difficult to analyze that detailed information. Lawyers use such rules of thumb in a number of circumstances, sometimes as an initial rough estimate, and sometimes to confirm the results of more detailed analysis.
Under Canadian law, many provisions of the Competition Act can only be enforced by the Commissioner of Competition, and not by private parties. That has led to a dearth of jurisprudence, and certainty, regarding the interpretation of several provisions of the Competition Act. For that reason, both major businesses and industry groups will want to take careful note of the recent decision in Toronto Real Estate Board v Commissioner of Competition, where the Federal Court of Appeal gave further guidance as to when a party will be liable for abuse of dominance.
Class actions are almost invariably complicated and expensive matters for businesses to deal with. Such class actions only become more complicated and expensive the bigger the classes are. Now, in Airia Brands Inc v Air Canada, the Ontario Court of Appeal has given the green light to a class action that includes class members all around the world. This decision has significant implications for virtually all multinational businesses.
Given the expansive discovery rights available under US law, plaintiffs may be tempted to try to use those rights in pursuit of proceedings under Canadian law. In its recent decision in Mancinelli v RBC, the Divisional Court placed an important limit on the ability of parties to do so. The Divisional Court upheld an order requiring plaintiffs in a proposed class action to obtain Court approval before taking any steps in furtherance of a subpoena issued by an American court.
The limitation period for claims under s. 36 of the Competition Act is a longstanding question of Canadian competition law. The plain language of the statute suggests that such claims must be brought within two years of the anticompetitive conduct. But in Fanshawe College of Applied Arts and Technology v AU Optronics Corporation, the Ontario Court of Appeal has reached a conclusion that is much more generous to Plaintiffs, holding that such claims must be brought within two years of the Plaintiff discovering the anticompetitive conduct.
