Annual Report of the Commissioner of Competition for the year ending March 31, 2005

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Appendix I : Discontinued Inquiries and Stay of Proceedings

Discontinued Inquiries

Advertising

In May 2002, the Bureau opened an inquiry dealing with providers of advertising space in greater Montréal and the surrounding area who had refused to publish real estate brokerage commission rates in their advertisements. It was also alleged that certain brokers and real estate agents from the greater Montréal area had pressured the advertising space providers to act accordingly and had also pressured certain brokers and real estate agents to increase their commission rates. In June 2003, the Bureau informed these advertising space providers of the relevant provisions of the Competition Act with regard to price maintenance and discriminatory practices. The providers under inquiry assured the Bureau that they would take the necessary steps to comply with the Competition Act. The information obtained in the course of subsequent checks on the brokers and real estate agents did not justify the case or taking any further action and the inquiry was discontinued in May 2004.

Lottery Subscription

In June 2004, the Bureau discontinued its inquiry into allegations that certain direct mail marketers had made materially false or misleading representations to the public when promoting their lottery subscription services worldwide. Purveyors of these services were alleged to have done the following:

• offered to play foreign lotteries on behalf of subscribers for an undisclosed service fee;
• exaggerated the size of the prize pools to be won; and
• conveyed the false or misleading impression that recipients had won a major prize or that their chances of winning one would be significantly enhanced by subscribing to the service.

After extensive investigation, the Bureau concluded that in some cases there was insufficient evidence to demonstrate beyond a reasonable doubt that the representations were materially false or misleading and that a criminal offence had been committed. In other cases, the Bureau concluded that the evidence did not disclose a sufficiently strong link between deceptive marketing materials and anyone in Canada to establish that they had committed a criminal offence under the Competition Act.

Electronic Anti-corrosion Device

In June 2004, the Bureau discontinued its inquiry into allegations that Canadian Auto Preservation Inc. had made false or misleading representations about the efficacy and performance of its Final Coat electronic anti-corrosion device. The company had claimed that this device could inhibit corrosion on the entire surface of a vehicle. At the beginning of the inquiry, the Bureau believed that the tests provided by the company were insufficient to support these claims. At the Bureau’s request, the company performed additional tests on the device and the Bureau decided that the claims could now be supported.

Real Estate

In December 2004, the Bureau discontinued its inquiry into allegations that real estate companies and their common counsel had conspired to fix prices charged to telecommunications services providers for access to buildings that the real estate companies owned or managed. After reviewing the information obtained through the inquiry, the Bureau determined that the conduct in question did not amount to a violation of the conspiracy provision of the Competition Act.

Snow Crab

In December 2004, the Bureau discontinued an inquiry launched under the conspiracy provision of the Competition Act into allegations that, during the 1994 to 2002 fishing seasons, a number of fish processors in Newfoundland and Labrador had conspired to fix or eliminate bonus payments made to fish harvesters for snow crab and had allocated snow crab quota among themselves. The Bureau concluded that the fish processors did not have sufficient control over the market to implement an agreement that would unduly lessen competition and that there was competition among fish processors in the purchase of snow crab, including the payment of bonuses.

Lawn Tractors

In January 2005, the Bureau discontinued its inquiry into allegations that John Deere Limited and a wholesale retailer had unreasonably enhanced the selling price of John Deere Series 100 lawn tractors, contrary to the conspiracy provision of the Competition Act. The Bureau concluded that it did not have sufficient evidence of conspiracy. The price maintenance aspect of the inquiry was resolved without charges by way of a prohibition order on the consent of John Deere Limited.

Digital Charts

In February 2005, the Bureau discontinued an inquiry begun at the request of six residents who alleged that a company holding an exclusive licence with a government agency to market digital charts and other products had abused its dominant position, intellectual property rights or both in its sales to consumers and in its pricing and licensing arrangements with corporate entities. After investigating, the Bureau concluded the following:

• The company’s policies on sales to consumers did not contravene the Competition Act.
• There was no evidence that the company had refused to license its intellectual property.
• The contractual arrangements between private parties to license intellectual property were of such a nature that the Bureau would generally not intervene.

Credit Cards and Loans

In March 2005, the Bureau discontinued its inquiry into the telemarketing practices of two Canadian companies. The inquiry followed the receipt of 91 complaints from clients in the United States who were offered a MasterCard or Visa for US$197 or a pre-approved loan for US$500. Since the inquiry, the Bureau has received no other complaints regarding the activities of these two companies and one of them has closed. The Bureau concluded that it would not be in the public interest to continue the investigation, since information on the remaining company was transferred to other law enforcement agencies.

Stay of Proceedings

Anthraquinone

In September 2003, charges were laid in the British Columbia Provincial Court against Chanoix Trading Ltd. and two company executives for an alleged conspiracy to lessen competition in the supply of anthraquinone, a chemical used in the manufacture of pulp. In December 2004, the Attorney General stayed charges in this matter, having determined that it was not in the public interest to proceed.