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Report details trends in competition, foreign investment law

Over the last year, a number of significant developments have occurred in the areas of competition and foreign investment law – both on legislative and policy fronts – and new trends are expected in 2014, says a recently-released report from Blake, Cassels & Graydon LLP.


In the report, the Blakes Competition, Antitrust & Foreign Investment group outlines the key Canadian developments in competition and foreign investment law in 2013 and sets out the key trends for this year.


The report sets out the areas to watch in: mergers; foreign investment; cartels; reviewable matters; misleading advertising; private actions; and e-discovery.


In 2013, there were several developments in merger review in Canada, including a rare merger challenge appeal to the Supreme Court of Canada (Tervita Corporation et al. v. Commissioner of Competition), as well as significant personnel changes at the Competition Bureau, the report states. This year, it’s expected the bureau will seek a permanent replacement for the recently-resigned head of mergers, along with continuing its collaborative approach to resolving potential competition concerns through negotiated solutions, where possible, and will focus on reducing review times on transactions that clearly raise no substantive issues.


Under the foreign investment umbrella, 2013 saw amendments to the Investment Canada Act that gave the Minister of Industry additional powers to subject investments by state-owned enterprises to a “net benefit to Canada” review. In a first under the 2009 national security amendments, the report states, the cabinet issued an order blocking an investment on national security grounds. In light of the amendments, and other developments, it is expected that foreign investments into Canada, particularly investments by SOEs and investments that raise potential national security issues, will continue to be closely monitored in 2014 and beyond.


When it comes to cartels, last year marked the first conviction by trial under the Competition Act applying the Criminal Code provision that assigns corporate liability for conduct of the company’s senior officers, the report states, noting enforcement activities will likely continue with vigour in 2014.


Reviewable matters that stood out in 2013 include the Competition Tribunal’s release of two decisions after a four-year quiet period on conduct matters, dismissing the Commissioner of Competition’s applications in both instances. This year, Competition Bureau will continue to investigate and enforce the provisions of the Competition Act, including the abuse of dominance provisions, and primarily in two priority areas: the digital economy and the healthcare sector.


In the area of misleading advertising, the report says the bureau continued to favour an enforcement-based approach in 2013, including bringing an action against leading furniture retailers in which the bureau has sought administrative monetary penalties and restitution. In 2014, it’s expected these enforcement efforts will continue.


In private actions last year, the Supreme Court of Canada decided a trilogy of cases holding indirect purchaser claims may be brought in class proceedings in Canada, the report says. It also notes the court did not accept the defendants’ inability to raise a “passing on” defence as a bar to claiming overcharge. The decisions align Canada’s private actions regime more closely to the approach taken by several U.S. states that permit indirect purchaser claims. In 2014, a number of claims held in abeyance will restart, with certification hearings expected to commence in 2015.


E-discovery continued to be a topic of interest in 2013, with a change in a Competition Bureau policy stating its first course of action in obtaining information from the target of a formal inquiry in non-merger cases will be, for all but exceptional cases, obtaining a s. 11 production order as opposed to relying on voluntary requests for information. This year, it’s expected that parties faced with ex parte production orders from the bureau may continue to contest the bureau’s disclosure to the court in light of recent case law from the Federal Court of Appeal.


To view the full report, which offers an in-depth look at all of the developments, visit the Blakes website.



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