Law Times

Page 12 SePtember 15, 2014 • Law Times www.lawtimesnews.com Competition law roundup Ordinary price enforcement among latest developments By Julius Melnitzer For Law Times PUBLIC SERVICE BEWARE Criminal charges of bid-rigging involving government contracts aren't uncommon. What is un- common, however, is having government employees charged with criminal offences arising from the same set of facts. But in May, that's exactly what happened when the Com- petition Bureau laid charges against Barney Shum, Sylvie Béland, and Marie-Claude Re- naud, all of whom worked in managerial capacities at Library and Archives Canada. The charges alleged the trio had participated in a $3.5-mil- lion bid-rigging conspiracy relating to the supply of infor- mation technology services to Library and Archives Canada. More particularly, the bureau alleges they "made opportu- nity" for Microtime Inc., itself charged with bid-rigging under the Competition Act, to have defrauded the government un- der s. 80(1)(b) of the Financial Administration Act. Convic- tion under the Financial Ad- ministration Act could result in up to five years' imprisonment. Interestingly, the charges don't allege the taking of any bribes contrary to s. 80(1)(a), nor do they specify what actions the accused took to make the oppor- tunity available to Microtime. But there's an irony here: The offence of bid-rigging spe- cifically requires that the agree- ment by the bidders not be made known to the person calling for the bids or tenders. "The fact that the government employees may now have known about Microtime's conduct raises the question of whether that con- stitutes a defence for Microtime," says Anita Banicevic of Davies Ward Phillips & Vineberg LLP. COMPETITION BUREAU REALIGNMENT In May, commissioner of compe- tition John Pecman announced a restructuring of the Competition Bureau, an agency historically divided into four enforcement branches: criminal matters, civil matters, mergers, and fair busi- ness practices. Under the realignment, crim- inal matters and fair business practices have combined and will be responsible for all crimi- nal cases including conspiracies, cartels, and bid-rigging. Mergers and civil matters will also combine, with responsibil- ity for all non-criminal matters, including mergers, non-criminal conduct, and non-criminal com- petitor agreements. Pecman's announcement pointed out that the realignment wouldn't reduce the bureau's size but would produce greater syn- ergies and collaboration. The realignment was, he said, "about building a stronger, more f lexible, and more adaptive agency." From a leadership perspective, Lisa Campbell, formerly senior deputy commissioner of the fair business practices branch, has as- sumed oversight of the mergers branch while senior deputy com- missioner Matthew Boswell re- mains in charge of criminal cases. INQUIRY GUIDANCE RELEASED In June and in furtherance of the Competition Bureau's action plan on transparency, the agency released its information bulletin on communication during in- quiries. The bulletin summarizes how and when the bureau com- municates during an inquiry with parties under investigation, industry participants, complain- ants, and the general public. The bureau also committed to reaching out to stakeholders in a year after the bulletin's release in order to obtain feedback on how the process was working and make necessary adjustments. ORDINARY PRICE CLAIMS For some 10 years, the Compe- tition Bureau's enforcement of ordinary price claims under the Competition Act's deceptive mar- keting practices provisions has been more or less in limbo. But according to Jennifer Rad, writing in the June 19 edition of Stikeman Elliott LLP's competi- tion blog, "recent signals from the Competition Bureau point towards increased enforcement focus on these types of claims in the future." Rad advises businesses to en- sure that their pricing practices and compliance programs are in line with the act and the bureau's ordinary price claims guide- lines. She goes on to suggest that businesses pay special attention to the specific requirements in the guidelines relating to the calculation of the ordinary sell- ing or reference price on which they base savings claims. SCC DENIES LEAVE IN REAL ESTATE CASE In July, the Supreme Court of Canada refused to grant leave to appeal from the Federal Court of Appeal's February 2014 deci- sion involving the Competition Bureau's abuse-of-dominance allegations against the Toronto Real Estate Board. The board won a major vic- tory when the bureau decided it couldn't proceed against an entity like the real estate organi- zation, a trade association of re- altors, that didn't compete in the residential real estate brokerage market that was the subject of the abuse allegations. But the Federal Court of Ap- peal disagreed, holding that the abuse-of-dominance provision could apply in circumstances where the allegedly dominant entity didn't itself compete in the relevant market. "In practical terms, the Fed- eral Court of Appeal's decision in the TREB case has the po- tential to expand the scope of conduct that may be pursued under the abuse of dominance provisions," say the authors of a recent Davies Ward Phillips & Vineberg LLP bulletin. "Pending further guidance, a company that may be consid- ered dominant (under the com- missioner's guidelines, domi- nance generally requires a mar- ket share of at least 35 per cent) may be wise to consider whether proposed conduct could give rise to anti-competitive ef- fects in any related market (for instance, upstream or down- stream markets)." LT FOCUS Sponsor a page of exclusive content or book your display ad in e Legal Resource Guide (GTA Edition) and put your name in front of more than 150,000 GTA-area consumers, in selected high-income neighbourhoods. Share your expertise in your area of practice and be the first name that comes to mind when community residents have a need for legal services. 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