Competition Law – A Sword and a Shield – Part III

Last edition, I described the civil offences and remedies under the Competition Act (Canada) (the “Act”). This article will focus upon some practical suggestions for using the Act to your advantage vis-�-vis your competitors.

I won’t pretend that competition law or procedure is simple to deal with. It isn’t. However, the Federal Government is expected to be introducing further simplifying amendments soon, depending of course on Government priorities, whether or not an election is called, and industry reactions. And yes, at some early stage, you will need to consult with a lawyer who feels comfortable advising on competition law issues.

For the sake of brevity, which is not my strong suit, I will again use a point form structure:

1.       Identify the problem: what is the action of a competitor, supplier or customer which is hampering your competitive position? Does the action hurt consumers in the public marketplace?

2.       Quantify the problem: how serious is the problem? Can you measure in dollars the effect upon you and upon consumers as a direct result of the anti-competitive acts? Can you describe the market for the product/input or service in the Canadian economy?

3.       Proving it: what evidence do you have on this problem? Can you prove the anti-competitive actions? Can you prove the effects?

4.       Assess the case: putting the case together, in answer to nos. 1 – 3, above, what do you and your competition lawyer think? Does your case hold water?

5.       No-names enquiry: there is a way to “test your case”, on a without prejudice basis. That is, you can get a preliminary opinion on whether or not your case is any good, without actually going through the whole process.

At the first level, your competition lawyer can make a no-names enquiry to the Competition Branch, in writing by letter or by email. I have recently made two such enquiries, and was pleased to have my questions addressed very promptly (a couple days) in both cases. Astounding service for the Federal or any government department!

In both cases, I described the material factual parameters of my anonymous case, and stated my view of the competition law issues in an email message. An officer of the Competition Branch called me by telephone and we had a candid, without prejudice conversation which reinforced and expanded the conclusions of my independent research.

Don’t expect the Branch to give you legal advice: that is your lawyer’s job. However, the Branch representative will outline its current thinking on these situations, and the level of enforcement priority afforded thereto.

I highly recommend this technique to anyone interested in obtaining an educated, albeit preliminary, view of the Branch’s approach to an activity, before more effort and resources are dedicated thereto. Whatever information you might obtain in this way is not binding on the Competition Branch or you. You might not agree with the Branch’s perspective. You are still entitled to pursue your remedies in any event.

6.       Formal proceedings: if the no-names enquiry result is encouraging, you might want to initiate formal proceedings under the Act. Depending on the complexity of the case, you might want to have your lawyer involved more intensely at this stage.

As noted in my two earlier articles, there are a number of remedies at your disposal, depending upon the nature of the anti-competitive action. You can:

a)       file a formal written complaint to the Competition Branch on a civil matter or on a criminal offence under the Act;

b)       request a formal opinion from the Branch on the situation;

c)       initiate civil court proceedings against the offending party under the Act; and

d)       initiate or defend civil court proceedings on the basis of common law governing restraints on trade and fair competition.

Not all remedies are available in every fact situation. In some case, you might enjoy multiple remedies. Competition remedies can be used as a sword against a party, or as a defending shield from the actions of another party. The timing of remedies is a strategic question.

So, if you believe you have been the victim of an anti-competitive action in your marketplace, there are many things you can do about it. You don’t need to plunge your corporation into a horrendous quagmire in order to find relief.

On the other hand, if you are dragged into a competition law investigation or proceeding, you better treat it seriously, and retain knowledgeable advice right away.

Grant can be reached at 905-847-9707