Blakes Competitive Edge™: December 2023 Update

Welcome to the December issue of Blakes Competitive Edge, a monthly publication of the Blakes Competition, Antitrust & Foreign Investment group. Blakes Competitive Edge provides an overview of recent developments in Canadian competition law, including updates on enforcement activity by the Canadian Competition Bureau (Bureau), recent initiatives and key trends.

Key Highlights

• Parliament proposes new significant amendments to the Competition Act (Act) in legislation implementing the Fall Economic Statement

• Debate on Bill C-56 amendments to the Act continues in the Senate

• Debate on Bill C-34 amendments to the Investment Canada Act (ICA) continues in the Senate

• Bureau issues section 11 orders to compel information to advance investigations of Rogers and Applied Systems

Merger Monitor

November 1 – November 24, 2023 Highlights

• 19 merger reviews completed

• Primary Industries: real estate and rental and leasing (21%); retail trade (21%); manufacturing (21%); and mining, quarrying, and oil and gas extraction (16%)

• Nine transactions received an Advance Ruling Certificate (47%), nine transactions received a No Action Letter (47%)

• One transaction abandoned

January – November 24, 2023 Highlights

• 177 merger reviews completed

• Primary industries: manufacturing (21%); mining, quarrying, and oil and gas extraction (16%); real estate and rental and leasing (14%); finance and insurance (10%); retail trade (8%)

• Four consent agreements (remedies) registered

• One judicial decision

• 84 transactions received an Advance Ruling Certificate (47%), 84 transactions received a No Action Letter (47%)

• One transaction abandoned, three transactions resolved through other means.

Merger Reviews Completed Through November 24, 2023 by Primary Industry

Legislation Watch

Canadian government proposes expansive amendments to the Act in the Fall Economic Statement

• On November 28, 2023, the Canadian government tabled Bill C-59, which includes proposed amendments to the Act previewed in the government’s Fall Economic Statement. Among other things, these proposed amendments significantly expand the rights and remedies available to private parties seeking to address anti-competitive or deceptive marketing conduct (private access); introduce administrative monetary penalties and the potential for divestiture orders with respect to joint ventures and other non-merger agreements; expand the scope of the merger notification requirements; establish a right to repair; and address misleading environmental claims (known as “greenwashing”). For more information on the amendments, please see our November 30, 2023 Blakes Bulletin: Revamping the Rules: Canadian Competition Act Update and our November 23, 2023 Blakes Bulletin: Competition Law Update: Further Changes Coming to the Competition Act.

Parliament continues debates on changes to the Act proposed in Bill C-56

• Parliamentary debate continues on Bill C-56, which proposes substantial amendments to the Act. On December 11, 2023, Bill C-56 completed third reading at the House of Commons and first reading at the Senate. On December 13, 2023 it completed second reading at the Senate. If passed, Bill C-56 would provide the Bureau with the power to compel third parties to produce information in connection with market studies; eliminate the efficiencies defence provisions, which allow mergers and non-merger agreements that result in economic efficiency gains to proceed if those gains outweigh any anti-competitive effects resulting from the merger; and include imposing excessive and unfair selling prices to the list of anti-competitive acts under the abuse of dominance provision, among other things. For more information about the amendments, see our September 21, 2023 Blakes Bulletin: Canadian Government Introduces Important Amendments to the Competition Act and our April 4, 2023 Blakes Seminar: Sweeping Changes to Canada's Competition and Foreign Investment Rules.

Debates continue to the Senate on changes to the ICA proposed in Bill C-34

• Parliamentary debate continues in the Senate on Bill C-34, which proposes substantial amendments to the ICA. On November 21, 2023, Bill C-34 completed first reading at the Senate. Bill C-34 proposes to introduce a new mandatory pre-closing filing requirement for specified investments by non-Canadians in certain business sectors (which will be identified in the regulations); provide the relevant minister authority to accept undertakings during a national security review; and remove the threshold for review for investments by state-owned enterprises from countries without trade agreements with Canada. For more information about the amendments, see our December 7, 2022 Blakes Bulletin: Canadian Government Proposes Important Changes to Expand National Security Review Powers Under the Investment Canada Act and our April  4, 2023 Blakes Seminar: Sweeping Changes to Canada's Competition and Foreign Investment Rules.

Canadian government publishes the final Retail Payments Activities Act regulations

• On November 22, 2023, the Canadian government published the final Retail Payments Activities Act regulations (Regulations). The objective of the Retail Payments Activities Act (RPAA) and the Regulations is to promote the safety and integrity of the financial system and address potential national security risks by unregulated payment service providers (PSP). Among other changes, beginning on November 1, 2024, entities that perform retail payment activities and who are not exempt from the RPAA, will be required to apply to the Bank of Canada for registration as a PSP. Registering or acquiring a PSP, or making certain prescribed changes to a PSP’s registration, may trigger a national security review process initiated and led by the Minister of Finance. For more information on the RPAA and the recently published Regulations, please see our November 15, 2023 Blakes Bulletin: The Wait is Over: Final Regulations to the Retail Payment Activities Act and our December 13, 2023 Blakes Bulletin: Bank of Canada Releases Guidance on Retail Payments Activities Act.

Enforcement Activity

Bureau reaches consent agreement with TicketNetwork regarding misleading marketing

• On November 21, 2023, the Bureau announced that it entered into a consent agreement with TicketNetwork to resolve its concerns that TicketNetwork had made misleading marketing claims. Following its investigation, the Bureau concluded that TicketNetwork had advertised tickets at unattainable prices and promoted tickets at unobtainable discounts in violation of the drip pricing provisions of the Act. Under the consent agreement, TicketNetwork agreed to pay an administrative monetary penalty (AMP) of C$825,000; establish a compliance program; and not make representations to the Canadian public that create the materially false or misleading general impression that consumers can buy tickets from TicketNetwork at prices that cannot be obtained because of non-optional fees, that prices are in Canadian dollars when they are actually in another currency, or that consumers are dealing with the primary ticket vendor.

Bureau reaches consent agreement with Northwest Territories Association of Realtors regarding membership practices

• On November 29, 2023, the Bureau announced that it entered into a consent agreement with the Northwest Territories Association of Realtors (NWTAR) to resolve the Bureau’s concerns that NWTAR’s membership practices violated the abuse of dominance provisions of the Act. A Bureau investigation concluded that NWTAR was denying membership to those seeking to compete remotely with the association’s existing members, and that this practice constituted anti-competitive conduct. To resolve the Bureau’s concerns, NWTAR agreed to accept members by following the terms and conditions listed on the NWTAR website, ensuring non-discriminatory access for any future competitors, and establishing and maintaining a corporate compliance program.

Bureau reaches consent agreement with Amp Me regarding misleading marketing

• On December 5, 2023, the Bureau announced that it entered into a consent agreement with Amp Me Inc. (Amp Me) to resolve its concerns that Amp Me made misleading marketing claims. Following an investigation, the Bureau concluded that Amp Me advertised that its mobile application was free of charge, when there was only a limited free trial. The Bureau also alleged that the mobile application had purchased positive reviews from third parties between 2019 and 2022 to promote its applications, which created a false or misleading general impression among the public. Under the consent agreement, Amp Me agreed to pay a reduced AMP of C$310,000, which can be increased up to C$1.5-million if the Bureau concludes that Amp Me’s financial statements were inaccurate or incomplete; pay an additional C$40,000 for the Bureau’s investigation costs; commit to having its marketing practices comply with the Act; and establish a compliance program.

Criminal charges laid against two individuals in a bid-rigging case in Québec City

• On November 14, 2023, criminal charges were laid against two individuals in the Court of Québec in connection with alleged bid-rigging for infrastructure contracts in Québec City between September 2006 and November 2010. The accused individuals allegedly conspired to undermine the competitive process by dividing municipal infrastructure contracts among their engineering firms.

Bureau obtains court order to compel information for its investigation of Applied Systems

• On November 16, 2023, the Bureau announced that it obtained a section 11 order from the Federal Court of Canada in connection with the Bureau’s investigation into Applied Systems, Inc. and its affiliates (Applied Systems). The order compels Applied Systems, a participant in Canada’s insurance technology industry, to produce records and information relevant to the Bureau’s ongoing investigation into whether it is engaging in conduct contrary to the restrictive trade practices and abuse of dominance provisions of the Act.

Bureau obtains court order to compel information for its investigation into Rogers’ marketing practices

• On December 4, 2023, the Bureau announced that it obtained a section 11 order from the Federal Court of Canada in connection with the Bureau’s investigation into Rogers Communications Inc. and its subsidiary, Rogers Communications Canada Inc. (Rogers). The order compels Rogers to produce records and information relevant to the Bureau’s ongoing investigation into whether Rogers’ marketing practices raise concerns under the civil deceptive marketing provisions of the Act. The investigation relates to the claims that Rogers’ Infinite wireless phone plans have unlimited data, when there are allegedly significant reductions in data speed after a subscriber reaches a certain data cap.

Non-Enforcement Activity

Bureau releases update from the Competition Summit

• On December 7, 2023 the Bureau published a summary of its key takeaways from “Canada’s Competition Summit,” which the Bureau hosted on October 5, 2023. The Bureau’s five takeaways included: (i) competition can bolster the economy and productivity; (ii) Canada should follow other countries and adopt a whole-of-government approach to competition; (iii) now is the time for legislative reform; (iv) Canadians desire more pro-competitive programs; and (v) competition issues should be publicized, including through market studies. For more information on the October summit, see the October 2023 edition of Blakes Competitive Edge™.

Investment Canada Act

Non-Cultural Investments

October 2023 Highlights

• One reviewable investment approvals and 89 notifications filed (63 filed for acquisitions and 26 for the establishment of a new Canadian business)

• Country of ultimate control: United States (48%); United Kingdom (9%); France (7%); China (4%)

January – October 2023 Highlights

• Five reviewable investment approvals and 981 notifications filed (734 filed for acquisitions and 247 for the establishment of a new Canadian business)

• Country of ultimate control: U.S. (51%); U.K. (8%); France (6%); Austria (4%); Germany (3%); China (3%)

Blakes Notes

• Browse our thought-leadership insights from the Competition, Antitrust & Foreign Investment group to learn more.

Contact Us

If you have any questions, please do not hesitate to contact your usual Blakes contact or any member of the Blakes Competition, Antitrust & Foreign Investment group.