Welcome to the October issue of Blakes Competitive Edge, a monthly publication of the Blakes Competition, Antitrust & Foreign Investment group. Blakes Competitive Edge provides an overview of recent developments in Canadian competition and foreign investment law, including updates on enforcement activity by the Canadian Competition Bureau (Bureau), recent initiatives and key trends.
Key Highlights
- Cineplex’s mandatory online booking fees found to violate drip pricing provisions of the Competition Act.
- Merger review activity in 2024 slightly increased compared to 2023, with the Bureau completing 146 merger reviews through the end of September 2024. This figure is 8% more than the number completed in September 2023 (135) and 5% fewer than the number completed in September 2022 (153).
- Federal government releases administrative note regarding interim national security conditions.
Merger Monitor
September 1 – September 30 Highlights
- 19 merger reviews announced, 16 merger reviews completed
- Primary industries of completed reviews: mining, quarrying, and oil and gas extraction (18%); real estate and rental and leasing (18%); manufacturing (18%); finance and insurance (12%)
- Five transactions received a No Action Letter (29%), 12 transactions received an Advance Ruling Certificate (71%)
- Zero consent agreements (remedies) filed; zero judicial decisions filed
January – September 30 Highlights
- 155 merger reviews announced, 146 merger reviews completed
- Primary industries of completed reviews: manufacturing (17%); real estate and rental and leasing (14%); mining, quarrying, and oil and gas extraction (14%); finance and insurance (10%); wholesale trade (8%); professional, scientific and technical services (8%)
- 74 transactions received a No Action Letter (51%), 66 transactions received an Advance Ruling Certificate (45%) and two transactions were resolved through other means
- Two consent agreements (remedies) filed; one judicial decision filed; one transaction was abandoned by the merging parties
Merger Reviews Completed Year to Date Through September 30, 2024, by Primary Industry
Enforcement Activity
Bureau Obtains Court Order to Advance Investigation into Canadian Real Estate Association’s Policies
- On October 3, 2024, the Bureau obtained a court order requiring the Canadian Real Estate Association (CREA) to produce records and information pertaining to the REALTOR® Cooperation Policy and the organization’s rules for real estate commissions. The Bureau is investigating if CREA’s REALTOR® Cooperation Policy reduces competition among realtors, gives larger real estate brokerages an unfair advantage over smaller ones and makes it more difficult for alternative listing services to compete in the market. CREA’s real estate commission rules are under investigation to determine whether such rules discourage buyer’s realtors from competing (e.g., offering lower commissions). The Bureau is seeking voluntary information from the public regarding real estate commissions, CREA’s policies and alternative listing services in the Canadian real estate market until November 6, 2024.
Tribunal Rules Against Cineplex in Deceptive Marketing Case
- On September 23, 2024, the Competition Tribunal in Commissioner of Competition v. Cineplex Inc ruled that Cineplex engaged in drip pricing contrary to sections 74.01(1)(a) and 74.01(1.1) of the Competition Act. The Tribunal found that Cineplex made false or misleading representations about the price of its movie tickets on its website and mobile application, as customers who purchased tickets through these mediums had to pay a mandatory online booking fee on top of initially advertised prices. Cineplex was ordered to refrain from the respective conduct or any similar activity for a period of 10 years and was required to pay a proportion of the Commissioner of Competition’s legal fees. For more information, see the Tribunal’s information note and the Bureau’s statement.
Non-Enforcement Activity
Bureau Representatives Deliver Remarks at Standing Senate Committee on Official Languages
- On October 7, 2024, representatives from the Bureau delivered an opening statement to the Standing Senate Committee on Official Languages regarding the Bureau’s 2020 market study into the digital healthcare sector. The representatives posited that the healthcare sector can deliver more competitive patient-centred healthcare through providing services in the languages spoken by patients.
Commissioner Matthew Boswell Attends G7 Competition Authorities and Policymakers’ Summit
- Matthew Boswell attended the G7 Competition Authorities and Policymakers’ Summit (Summit) on October 3 and 4, 2024 to discuss competition concerns stemming from the adoption of artificial intelligence (AI) and the overall impact of such technologies in the economy. During the Summit, the G7 policymakers and competition authorities committed to the following AI guiding principles: (i) fair competition in AI markets; (ii) barrier-free market entry and opportunity within the AI sector; (iii) protection of consumer choice and interests through clear and correct information; (iv) interoperability between AI systems; (v) maximization of AI-related innovation; and (vi) transparency and accountability for AI companies. For more information, see the Bureau’s news release.
Bureau Obtains Court Orders Requiring Major Airlines to Participate in Market Study
- On October 3, 2024, the Bureau obtained court orders requiring WestJet Airlines Ltd (WestJet) and Air Canada to provide information for the Bureau’s market study into the competition present in Canada’s airline industry. The information the Bureau is seeking through these orders includes both WestJet’s and Air Canada’s (i) key performance metrics prior to the pandemic and in recent years; (ii) agreements with airports and shareholdings in other airlines providing Canadian domestic air passenger services; (iii) analyses of barriers to entry in Canada’s airline industry (including airport access and government policies); and (iv) analyses of the state of competition in the airline sector. These court orders mark the first time the Bureau has used its new information-gathering powers in a market study, rather than enforcement context.
Commissioner Matthew Boswell Delivers Address at Canadian Bar Association Competition Law Fall Conference
- On September 26, 2024, Matthew Boswell delivered remarks at the Canadian Bar Association’s Competition Law Fall Conference. In his speech, Boswell commented on the recent amendments to the Act and the effect on the Bureau’s approach to marketplace conduct. Boswell detailed how the amendments will impact the operation of businesses, namely that (i) more mergers will be subject to pre-merger notification requirements; (ii) non-notifiable transactions will be subject to a longer limitation period; (iii) mergers in concentrated sectors will face more scrutiny; and (iv) in cases where the Bureau applies for an injunction for a pending merger, the merger will not be able to close until the injunction is decided. Future steps relating to the amendments’ enforcement were also addressed.
Commissioner Matthew Boswell Delivers Opening Remarks at Canada’s Competition Summit 2024
- On September 16, 2024, Matthew Boswell delivered the opening remarks for Canada’s Competition Summit 2024: Market Dynamics in the AI Era. In the speech, Boswell commented on both the rapid adoption of AI and how the Bureau is addressing such adoption through growing its digital enforcement branch. The Commissioner highlighted four common themes present among submissions to the Bureau’s recent consultation on AI, including (i) the mixed impact of AI on small and medium-sized businesses; (ii) the need for good legislation and competition to allow for AI to drive innovation; (iii) the unique nature of AI markets themselves; and (iv) concern for potentially harmful uses of AI such as algorithmic collusion and deepfakes. The Bureau is preparing a report summarizing the AI consultation submissions which will be released by the end of 2024.
Copyright Board of Canada Joins Canadian Digital Regulators Forum
- On September 10, 2024, the Bureau announced that the Copyright Board of Canada joined the Canadian Digital Regulators Forum (Forum). The Forum was created to strengthen collaboration and information sharing on matters concerning digital markets and platforms. The Office of the Privacy Commissioner of Canada, the Canadian Radio-television and Telecommunications Commission, and the Bureau are also members of the Forum.
Bureau Makes Submission to Consultation Regarding Canada’s Financial Sector
- On September 11, 2024, the Bureau made a submission in response to the Department of Finance’s consultation for “Proposals to Strengthen Canada’s Financial Sector” to advocate for more competition in Canada’s financial industry. The Bureau reiterated two recommendations from its March 2024 submission regarding competition and switching costs in the finance industry: adopting a consumer-driven banking framework and eliminating the mortgage stress test on renewal. Comments on multiple areas of the Department of Finance’s discussion paper were also offered for the Department of Finance’s consideration.
Investment Canada Act
Federal Government Releases Administrative Note on Interim National Security Conditions
- On September 3, 2024, The Government of Canada released an administrative note regarding how section 25.3(1.1) of the Investment Canada Act, which relates to interim conditions during a national security review, will be administered. This note details (i) when interim conditions will be imposed; (ii) the process by which interim conditions will be implemented; (iii) how affected parties are entitled to make representations regarding any such interim conditions; (iv) example interim conditions that could be imposed; (v) timelines for interim conditions; (vi) the process by which interim conditions can be amended and removed; and (vi) how interim conditions will be both monitored and enforced. The administrative note will be reviewed by the Government of Canada within six months of its initial issuance and annually thereafter, with revisions to be made as needed.
Jinteng Mining Applies for Judicial Review of Industry Minister’s National Security Review Order
- On July 4, Jinteng Mining filed a notice of application for judicial review under section 18.1 of the Federal Courts Act in relation to the company’s purchase of Pan American Silver Corp’s gold asset in Peru. The transaction, which occurred in May of 2024, was subject to an order for national security review by the Minister of Innovation, Science and Industry of Canada (François-Philippe Champagne). The judicial review application seeks to quash or set aside the Minister’s decision and has yet to be heard in the Federal Court.
Cultural Investments
Q1 2024 Highlights
- Two reviewable investment approvals and four notifications filed (all for acquisitions, none for the establishment of a new Canadian business)
- Country of origin of investor: Denmark (33%); United States (33%); United Kingdom (17%); Argentina (17%)
Non-Cultural Investments
August 2024 Highlights
- 88 notifications filed (69 filed for acquisitions, 19 for the establishment of a new Canadian business)
- Country of ultimate control: United States (60%); Germany (7%); France (3%); Netherlands (3%); Australia (2%); China (2%); India (2%); Japan (2%); Sweden (2%)
January – August 2024 Highlights
- Three reviewable investment approvals and 794 notifications filed (611 for acquisitions and 183 for the establishment of a new Canadian business)
- Country of ultimate control: United States (59%); United Kingdom (5%); France (5%); China (4%); Germany (3%); India (2%); Sweden (2%)
Blakes Notes
- On September 26-27, 2024, the Blakes Competition, Antitrust & Foreign Investment group was out in full force during the CBA Competition Law Fall Conference. Cassandra Brown, Chair of the Conference, sat down with the Commissioner of Competition, Matthew Boswell, to unpack Canada’s new rules affecting mergers and business conduct. Blakes Partners Julie Soloway, Cathy Beagan Flood, and Jonathan Bitran also participated as speakers.
- On September 26, 2024, Blakes Partner Julia Potter hosted Anu Lalith-Kumar, a Competition Law Officer at the Bureau, on the first episode of the Counterfactual Podcast’s new “Better Know the Bureau” series.
- Browse our thought-leadership insights from the Competition, Antitrust & Foreign Investment group to learn more.
- Browse our Competition Act Amendments page for insights on navigating the recent amendments.
