ONE | CHANGES AT THE COMPETITION BUREAU
With the arrival of the new Commissioner came a shift in the Bureau’s enforcement approach. Through several recent initiatives focused on transparency, predictability and consultation, parties can expect improved communication and dialogue when dealing with the Competition Bureau, particularly in the context of merger reviews. Merging parties have already started to see the benefits of this approach through greater pre-filing dialogue and greater visibility into the issues being considered by the Bureau. But the shift in enforcement approach is not expected to constrain the Bureau’s enforcement efforts. In light of the Commissioner’s criminal enforcement background, the Bureau will likely continue to vigorously investigate and pursue criminal violations of the Competition Act involving both Canadian and international companies.
TWO | GREATER PRODUCTION DEMANDS IN NON-MERGER MATTERS
The Bureau is expected to rely more heavily on its formal subpoena powers to obtain information in the course of investigating conduct under the Competition Act. The number of formal subpoenas issued by the courts at the request of the Bureau appears to be increasing, and the Commissioner has stated publicly that voluntary production will become the exception rather than the rule. Document creation and management protocols will become more important as companies potentially face greater production demands by the Bureau.
THREE | FOCUS ON REGULATED INDUSTRIES
The Bureau has undertaken a number of initiatives in relation to regulated industries in Canada. As a first step, the Bureau has invited stakeholder input to identify sectors of the Canadian economy in which the Bureau can play a targeted role in advocating for increased competition. The Bureau will likely consider existing and additional input to proactively seek out laws, rules and policies that potentially restrict competition. The Bureau is also expected to advocate in favour of increased competition, where doing so is likely to have clear, tangible benefits for Canadians. The Bureau has undertaken a number of related initiatives as well, including making submissions before the Canadian Radio-television and Telecommunications Commission (CRTC) regarding the Wireless Code of Conduct and signing letters of agreement/memoranda of understanding with the CRTC and the Department of Public Works and Government Services Canada. Further cooperation efforts with regulatory agencies are expected going forward.
FOUR | INDIRECT PURCHASER CLASS ACTIONS PERMITTED TO PROCEED
In a trilogy of cases released by the Supreme Court of Canada in October 2013, the court confirmed that both direct and indirect purchasers can bring claims for damages and/or restitution (disgorgement of profits) against upstream suppliers under the Competition Act and at common law. In particular, the court held that the complexities associated with proving damages as a result of overcharge by suppliers cannot act as a bar to indirect purchaser claims in Canada at the certification stage of the proceeding. The burden of proving loss or damage as a result of the unlawful conduct still lies with the plaintiffs to be decided at trial. Cases that have been held in abeyance awaiting the result of the trilogy are now expected to proceed, with a large number of certification hearings anticipate to be scheduled in the near future.
FIVE | INCREASED FOCUS ON NATIONAL SECURITY REVIEW UNDER THE INVESTMENT CANADA ACT
Since 2009, the Canadian government has had the power to review, and ultimately block or approve with conditions, investments by non-Canadians in Canadian businesses, where such investments are injurious to national security. While the national security provisions had been used sparingly since their enactment, a number of recent, high-profile transactions have been subject to national security reviews, including one transaction that was formally blocked on national security grounds (Accelero’s proposed acquisition of Allstream). Given that fewer transactions will be subject to “net benefit review” in the wake of both recent legislative amendments that are expected to take effect in 2014 and the forthcoming Comprehensive Economic and Trade Agreement with the European Union that will ultimately raise the review thresholds above C$1.5-billion, national security is expected to play a more prominent role in the foreign investment review process.