Amendments in Canada Competition Act Effective June 23, 2023!!
Karma Global Aims to Find a Radical Approach for A Change in Mind-set, Methods and Employment Laws Beneficial to The Technological World of Today!
Karma Management has now become Karma Global which was incorporated in the year 2004, having now completed almost 19 years of its existence.
As late as April 2021, Karma Management Global Consulting Solutions Pvt Ltd. took a very bold step of venturing into foreign shores in terms of shoving up its business prospects in countries like US, UK, UAE, Canada, South East and South East Asia.
It has already made its mark in terms of providing excellent services in the areas of payroll, outsourcing, recruitment and talent acquisition, facility management services and regulatory compliances including immigration, negotiations and employment contracts in these foreign countries as well.
The major services provided by Karma Global include Regulatory Audit, Management Consulting, Strategy Consulting, Financial & Tech Advisory, Risk Advisory, and Legal.
Towards the end of April and the first fortnight of May 2023, Pratik Vaidya, MD & CVO of Karma Global was in the U.S. and Canada attending the Select USA Investment Summit 2023 which came to a close, marking the largest Investment Summit in Select USA history, with 4,900 attendees spanning 83 international markets that was well represented.
There was lot of interactive session at Bay Area Houston where the delegates were briefed about business divisions in Franchise, Business Brokerage, Consulting, Education, Technology and Business Immigration and assistance was also offered to the delegates in buying or selling businesses with more than 400 franchise opportunities.
This delegation in association with the Consulate General of India, US Commercial Service of Dallas, IACC of Greater Houston, the Greater Houston Partnership and Economic Development Offices is another step in IACC’s development of relations with the United States of America.
Amendments in Canada Competition Act Effective June 23, 2023!!
Significant amendments to the Competition Act!
On June 23, 2022, significant amendments to the Competition Act (the Act) received royal assent as part of Bill C-19 made under the Budget Implementation Act, 2022.
The Act’s amendments came into force immediately upon receiving royal assent, with the exception of the amendments to the criminal conspiracy provisions that will come into force on June 23, 2023.
As a result of these changes, virtually all companies will be required to update their internal competition law policies and compliance guidance to their employees.
For some companies, the amendments may necessitate a broader compliance risk re-assessment and a review of their existing business practices.
Key features of the amendments include the following:
Increased fines and penalties
As of June 23, 2023, fines for violating the Act’s criminal conspiracy provisions will no longer be capped at $25 million, but will instead be “in the discretion of the court.” Contravening the abuse of dominance or deceptive marketing provisions will be fined at the greater of (I) $10 million ($15 million for subsequent orders) or (ii) three times the value of the benefit derived from the conduct at issue, or if that amount cannot be calculated, three percent of annual worldwide gross revenues.
Wage fixing and no-poach/no-hire agreements to be made illegal
Agreements between employers to fix wages or implement no-poaching policies will be criminal offences under the Act as of June 23, 2023. This aligns Canada’s approach with other jurisdictions such as the US where such agreements are criminal offences. Companies may wish to review any related practices before these provisions come into force to ensure there are no policies in place that will violate this new provision.
Private abuse of dominance actions available
As a result of the amendments, private parties can now bring applications to the Competition Tribunal (the Tribunal) for an alleged abuse of dominance (previously, only the Commissioner of Competition could bring enforcement actions under the Act’s abuse of dominance provisions).
Private parties will need leave to proceed to a hearing on the merits (as is the case with other private access rights under the Act). Behavioural remedies (i.e., orders to cease or modify conduct found to be problematic) are the only remedy available to private parties (including the possibility of interim relief).
While the Tribunal will be able to impose administrative monetary penalties where it believes this is warranted, these are payable to the government – in other words, from a financial perspective, while successful private litigants may be able to recover some or all of their legal costs, there is no right to damages.
As there is no right to damages, there may be limited incentives for private parties to bring private abuse of dominance cases, as these cases are generally a costly, time-consuming undertaking. However, companies will need to consider the possibility of private enforcement when conducting their risk reassessment. The availability of a right of private enforcement may create incentives to bring strategic cases or be used as leverage in commercial disputes.
Expanded list of factors to determine an impact on competition
Several additional factors can now be considered under the abuse of dominance framework, including network effects, effects on price and non-price competition (i.e., consumer privacy and choice), nature and extent of innovation in a market, and any other factor relevant to competition in the market. Similar factors can also now be considered under the competitor collaboration and merger review frameworks.
The purpose of these amendments is to allow the Bureau to better address potential competitive issues in the digital economy. While new to the Act, many of these factors are not new to the Bureau’s historic analytical approach and have been considered in prior cases. Again, companies with a strong market position (in particular those whose business activities relate to the digital economy) should consider how these changes could affect their potential risk exposure.
Drip pricing expressly prohibited
Drip pricing is now expressly defined and prohibited under the Act’s criminal and civil misleading advertising provisions. Drip pricing is where an initial price is advertised but prior to completing the transaction non-optional fees are added by the vendor. The increased penalties discussed above will apply to drip pricing cases. The Bureau has previously investigated and penalized companies for drip pricing activities. These amendments highlight the Bureau’s continued enforcement focus in this area.
Merger notification anti-avoidance provisions introduces
The Act now contains a specific anti-avoidance provision designed to ensure the mandatory merger notification requirements will apply to transactions previously not caught by the merger notification regime. The goal of these provisions is to limit the ability of parties to structure transactions in a manner intended to avoid making a merger notification (for example, by structuring a merger as a series of smaller non-notifiable, independent transactions as opposed to a single notifiable transaction).
Conclusion: Key Take Always?
The amendments include some significant substantive changes, such as the increased fines and prohibition of employer-to-employer agreements regarding wages and solicitation of employees.
However, other changes, including those relating to drip pricing and the expanded list of factors to be considered when assessing the competitive effect of the conduct being challenged, are largely the codification of principles previously applied. Importantly, the amendments telegraph the Bureau’s thinking in terms of analytical approach, areas of enforcement priority and a desire to engage in more vigorous enforcement.
As stated above, all companies should consider updating their existing compliance policies to ensure alignment with the amendments. For some companies (for example, those with a significant market position, or who engage in practices directly targeted by the amendments) it may be prudent to re-evaluate their potential compliance risk in light of the amendments.
It is important to note that these are likely only the first phase of the government’s reform of the Act, and further amendments are expected as part of a broader “comprehensive review” of the competition framework in Canada.
Role of Karma Global in the U.S. and Canada
Karma Global with Pratik Vaidya as its founder, has entered the global scenario both as a leader and a moderator with a record level participation from 4900 attendees from 83 international markets and 55 States and Territories.
In person Networking and informative programs on key industry topics gave insightful details affecting FDI community and also helped to connect with industry experts and economic development organizations so as to seize every opportunity available for expansion of business and getting to know many global companies with similar interest.
Karma Global took every opportunity to connect with the U.S. Department of Commerce, which promotes and facilitates business investment into the United States by coordinating related federal government agencies to serve as a single point of contact for investors. Select USA assists U.S. economic development organizations to compete globally for investment by providing information, a platform for international marketing, and high-level advocacy. Select USA also helps investors find the information they need to make decisions; connect to the right people at the local level; navigate the federal regulatory system; and find solutions to issues related to the federal government.
Karma Global has its offices in Newark, Delaware, USA and in Canada at Toronto, Ontario where it has been offering business expertise and business drivers with solutions, experience and knowledge.
Proprietary blog of Karma Global Tech Management LLC
This blog has been collated and compiled by the internal staff of Karma Global with the knowledge and expertise that they possess, besides adaptation, illustration, derivation, transformation, collection and auto generation for its monthly newsletter Issue 13 of July 2023 and in case of specific or general information or compliance updates for that matter, kindly reach out to the Marketing Team – Kush@karmamgmt.com / yashika@karmamgmt.com