THE LITIGATOR – Review of Competition Law – April 2007

Contributors: Michael Osborne , Jennifer Cantwell, Kyle Peterson , Sonny Ingram, Michael Binetti, and Adam Wygodny

TOP STORIES

Appeal court revises test for abuse of dominant position
In identifying anti-competitive acts, one must ask whether the conduct had an intended predatory, exclusionary or disciplinary effect on a competitor, not on competition, the Federal Court of Appeal held in overturning the Tribunal’s 2005 finding that Canada Pipe’s rebate program was not anti-competitive….

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Canada’s telecommunications industry is about to experience a massive shift from intrusive sectoral regulation to open markets. The Competition Bureau recently issued guidance on the application of the abuse of dominance provisions of the Competition Act to the telecommunications industry. Industry Minister Bernier has introduced legislation to provide for fines of up to $15 million against a telecommunications service provider found to have abused its dominant position. Mr. Bernier has also announced new rules that will accelerate deregulation of local telephone services.

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On March 22, 2006, the Telecommunications Policy Review Panel issued a report recommending reliance on market forces and competition policy, instead of regulation, in the telecom sector.

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Contributors: Michael Osborne , Jennifer Cantwell, Paul Emerson, Angela Yadav, Sonny Ingram, and Michael Binetti

TOP STORIES
Rona keeps Sherbrooke store
In May, the Competition Tribunal rescinded a September 2003 consent agreement, allowing home improvement retailer Rona Inc. to keep the Sherbrooke , Quebec store it agreed to sell to gain Bureau approval of its acquisition of Réno-Dépot. The Tribunal found that Home Depot’s imminent arrival was a change in the circumstances that led to the consent agreement, and that the agreement would not have been made in the present circumstances. The Tribunal rejected the Commissioner’s arguments that it should refuse to rescind the agreement as a matter of discretion.

The Tribunal’s decision is the first time that the Competition Act’s variation / rescission provision (s. 106) has been applied to a consent agreement. Because consent agreements are negotiated and made by the parties, not the Tribunal, the Tribunal must look to the intentions of the parties. The Tribunal also emphasized that the Commissioner must be responsive to changing circumstances.

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