Contrat d

Contrat d'agence au Canada : tribunal de la concurrence septembre 2014

-

English
38 Pages
Read
Download
This item can be downloaded free of charge

Description

Competition Tribunal Tribunal de la Concurrence Reference:Kobo Inc. v. The Commissioner of Competition,2014 Comp. Trib. 14 File No.: CT201402 Registry Document No.: 99 IN THE MATTER OF the filing and registration of a consent agreement pursuant to section 105 of theCompetition Act, R.S.C., 1985, c. C 34 as amended, AND IN THE MATTER OF a Reference to the Tribunal under subsection 124.2(2) of the Competition Act. BETWEEN: Kobo Inc. (applicant) and The Commissioner of Competition, Hachette Book Group Canada Ltd., Hachette Book Group, Inc., Hachette Digital Inc., HarperCollins Canada Limited, Holtzbrinck Publishers, LLC; and Simon & Schuster Canada, a division of CBS Canada Holdings Co. (respondents) Date of hearing: 20140625 Before Judicial Member: Crampton C.J. Date of Reasons and Order: September 8, 2014 REASONS FOR ORDER AND ORDER A. INTRODUCTION AND OVERVIEW [1] These reasons explain the basis for the attached order issued in response to a Reference made by the Commissioner of Competition in the abovecaptioned proceeding, pursuant to subsection 124.2(2) of theCompetition Act, R.S.C. 1985, c. C34 (the “Act”).

Informations

Published by
Published 24 September 2014
Reads 70
Language English
Report a problem
Competition Tribunal Tribunal de la Concurrence Reference:Kobo Inc. v. The Commissioner of Competition,2014 Comp. Trib. 14File No.: CT201402 Registry Document No.: 99 IN THE MATTER OF the filing and registration of a consent agreement pursuant to section 105 of theCompetition Act, R.S.C., 1985, c. C 34 as amended, AND IN THE MATTER OF a Reference to the Tribunal under subsection 124.2(2) of the Competition Act. BETWEEN: Kobo Inc. (applicant) and The Commissioner of Competition, Hachette Book Group Canada Ltd., Hachette Book Group, Inc., Hachette Digital Inc., HarperCollins Canada Limited, Holtzbrinck Publishers, LLC; and Simon & Schuster Canada, a division of CBS Canada Holdings Co. (respondents) Date of hearing: 20140625 Before Judicial Member: Crampton C.J. Date of Reasons and Order: September 8, 2014 REASONS FOR ORDER AND ORDER
A.INTRODUCTION AND OVERVIEW
[1]These reasons explain the basis for the attached order issued in response to a Reference made by the Commissioner of Competition in the abovecaptioned proceeding, pursuant to subsection 124.2(2) of theCompetition Act, R.S.C. 1985, c. C34 (the “Act”).
[2]
The question of law in this Reference is:
What is the nature and scope of the Tribunal’s jurisdiction under subsection 106(2) and, in that connection, what is the meaning of the words “the terms could not be the subject of an order of the Tribunal” in subsection 106(2) of the Act?
[3]For the reasons that follow, I have concluded that the jurisdiction of the Tribunal on an application under subsection 106(2) is limited to assessing the following:
i.Whether the terms of a consent agreement are not within the scope of the type of order(s) that the Tribunal is permitted to issue in respect of the reviewable trade practice in question. (Terms that are not within the purview of one or more specific types of orders that may be made by the Tribunal in respect of a particular reviewable trade practice could not be the subject of an order of the Tribunal, within the meaning of subsection 106(2).)
ii.Whether the consent agreement (a) identifies each of the substantive elements of the reviewable trade practice in question; and (b) contains either (i) an explicit agreement between the Commissioner and the respondent(s) that each of those elements has been met, or (ii) a statement that the Commissioner has concluded that each of those elements has been met, together with a statement by the respondent(s) that they do not contest that conclusion.
iii.Whether the terms of the consent agreement are unenforceable or would lead to no enforceable obligation, for example, because they are too vague.
2
[4] Applicants under subsection 106(2) are confined to establishing one or more of these three things. It is not open to them to attempt to establish that one or more of the substantive elements of a reviewable trade practice have not in fact been met, or that a defence or exception set forth in the Act is applicable. The Tribunal does not have the jurisdiction to consider these things under subsection 106(2).
[5]Accordingly, in these proceedings, it is open to Kobo Inc. (“Kobo”) to attempt to establish (i) that one or more of the terms of the consent agreement that is the subject of this proceeding are not within the scope of thetype of order(s)that the Tribunal is permitted to issue pursuant to section 90.1 of the Act; (ii) that one or both of the conditions described in paragraph 3(ii)(a) and (b) above have not been satisfied; and/or (iii) that one or more of the terms of the consent agreement is unenforceable or would establish no enforceable obligation, for example because they are vague or ambiguous. If Kobo wishes to adduce factual evidence to establish any of these things, it may do so.
[6]However, it is not open to Kobo to attempt to establish, whether by factual evidence or otherwise, that one or more of the substantive elements set forth in section 90.1 of the Act are not met, including whether there is an agreement or arrangement – whether existing or proposed – between persons two or more of whom are competitors. Disputes with respect to these and other substantive elements, such as whether an agreement is likely to prevent or lessen competition substantially, are beyond the scope of subsection 106(2).
B.RELEVANT LEGISLATION
[7]Section 105 of the Act provides for the entering into consent agreements and the registration of those agreements by the Tribunal. Section 105 states:
105.(1) The Commissioner and a person in respect of whom the Commissioner has applied or may apply for an order under this Part, other than an interim order under section 103.3, may sign a consent agreement.
105.(1) Le commissaire et la personne à l’égard de laquelle il a demandé ou peut demander une ordonnance en vertu de la présente partie — exception faite de l’ordonnance provisoire prévue à l’article 103.3 — peuvent signer un consentement.
3
(2) The consent agreement shall be based on (2) Le consentement porte sur le contenu de terms that could be the subject of an order of toute ordonnance qui pourrait éventuellement the Tribunal against that person. être rendue contre la personne en question par  le Tribunal. (3) The consent agreement may be filed with (3) Le consentement est déposé auprès du the Tribunal for immediate registration. Tribunal qui est tenu de l’enregistrer  immédiatement. (4) Upon registration of the consent (4) Une fois enregistré, le consentement met agreement, the proceedings, if any, are fin aux procédures qui ont pu être engagées, et terminated, and the consent agreement has the il a la même valeur et produit les mêmes effets same force and effect, and proceedings may be qu’une ordonnance du Tribunal, notamment taken, as if it were an order of the Tribunal. quant à l’engagement des procédures.
[8]Pursuant to subsection 106(2), third parties may apply to the Tribunal to vary or rescind a consent agreement. That provision states:
(2) A person directly affected by a consent agreement, other than a party to that agreement, may apply to the Tribunal within 60 days after the registration of the agreement to have one or more of its terms rescinded or varied. The Tribunal may grant the application if it finds that the person has established that the terms could not be the subject of an order of the Tribunal.
(2) Toute personne directement touchée par le consentement — à l’exclusion d’une partie à celuici — peut, dans les soixante jours suivant l’enregistrement, demander au Tribunal d’en annuler ou d’en modifier une ou plusieurs modalités. Le Tribunal peut accueillir la demande s’il conclut que la personne a établi que les modalités ne pourraient faire l’objet d’une ordonnance du Tribunal.
[9]For the purpose of better understanding the opposing interpretations of subsection 106(2) being advanced on this Reference by the Commissioner of Competition (the “Commissioner”) and Kobo, it is helpful to keep in mind the substantive requirements in section 90.1. That provision states:
90.1 (1)If, on application by the Commissioner, the Tribunal finds that an agreement or arrangement — whether existing or proposed — between persons two or more of whom are competitors prevents or lessens, or is likely to prevent or lessen, competition
90.1 (1)Dans le cas où, à la suite d’une demande du commissaire, il conclut qu’un accord ou un arrangement — conclu ou proposé — entre des personnes dont au moins deux sont des concurrents empêche ou diminue sensiblement la concurrence dans un
4
substantially in a market, the Tribunal may marché, ou aura vraisemblablement cet effet, make an order le Tribunal peut rendre une ordonnance : (a) prohibiting any person — whether or not a a) interdisant à toute personne — qu’elle soit party to the agreement or arrangement — from ou non partie à l’accord ou à l’arrangement — doing anything under the agreement or d’accomplir tout acte au titre de l’accord ou de arrangement; or l’arrangement; (b) requiring any person — whether or not a b) enjoignant à toute personne — qu’elle soit party to the agreement or arrangement — with ou non partie à l’accord ou à l’arrangement — de prendre toute autre mesure, si le the consent of that person and the commissaire et elle y consentent. Commissioner, to take any other action. [10]It is also helpful to keep in mind the purposes of the Act, as set forth in section 1.1. That provision states:
1.1The purpose of this Act is to maintain and encourage competition in Canada in order to promote the efficiency and adaptability of the Canadian economy, in order to expand opportunities for Canadian participation in world markets while at the same time recognizing the role of foreign competition in Canada, in order to ensure that small and mediumsized enterprises have an equitable opportunity to participate in the Canadian economy and in order to provide consumers with competitive prices and product choices.
C.BACKGROUND
1.1La présente loi a pour objet de préserver et de favoriser la concurrence au Canada dans le but de stimuler l’adaptabilité et l’efficience de l’économie canadienne, d’améliorer les chances de participation canadienne aux marchés mondiaux tout en tenant simultanément compte du rôle de la concurrence étrangère au Canada, d’assurer à la petite et à la moyenne entreprise une chance honnête de participer à l’économie canadienne, de même que dans le but d’assurer aux consommateurs des prix compétitifs et un choix dans les produits.
[11]On February 7, 2014, a consent agreement (the “CA”) between the Commissioner and various book publishers (the “Respondents”) was filed and registered with the Competition Tribunal (the “Tribunal”) pursuant to section 105 of the Act.
5
[12]The Respondents are Hachette Book Group Canada Ltd and certain of its affiliates, Holtzbrinck Publishers, LLC (doing business as Macmillan), HarperCollins Canada Limited and Simon & Schuster Canada, a division of CBS Canada Holdings Co. [13]One of the recitals to the CA states that “the Commissioner alleges that further to an agreement or arrangement, the Respondents have engaged in conduct with the result that competition in the markets for Ebooks in Canada has been substantially prevented or lessened, contrary to section 90.1 of the Act.” [14]Broadly speaking, the CA is directed towards distribution agreements between the Respondents and retailers of electronic books (“Ebooks”). Among other things, the CA prohibits the Respondents from directly or indirectly restricting, limiting or impeding an Ebook retailer’s ability to set, alter or reduce the retail price of any Ebook for sale to consumers in Canada, or to offer price discounts or any other form of promotions to encourage consumers in Canada to purchase one or more Ebooks. The CA also prohibits the Respondents from entering into an agreement with any Ebook retailer that has one of those effects. These prohibitions apply for 18 months, commencing on the fortieth day following the registration of the CA.
[15]Certain other terms in the CA prohibit the Respondents from entering into agreements with Ebook retailers that contain particular types of mostfavoured nation clauses, for a period of four years and six months from the date of the registration of the CA. [16]In addition, the CA requires the Respondents to take steps to terminate, and not renew or extend, agreements with Ebook retailers that have certain types of provisions. In lieu of such action, the CA permits the Respondents to take certain alternative steps to satisfy their obligations. [17]On February 21, 2014, Kobo filed a Notice of Application (the “NOA”) pursuant to subsection 106(2) of the Act for, among other things: i.an order rescinding the CA; and
6
ii.in the alternative, an order varying the terms of the CA, to remove certain obligations of the Respondents;
[18]One of Kobo’s primary business operations is as a retailer of Ebooks. Kobo also develops and retails EBook reading devices and creates free application software for reading E books on computers and mobile devices.
[19]In its Statement of Grounds and Material Facts appended as Schedule “A” to the NOA, Kobo states that the effect of the CA “is to swiftly and radically alter Kobo’s contractual relationships with four key publishers – Simon & Schuster, Macmillan, HarperCollins, and Hachette.”
[20]After further describing the basis for its submission that it is “a person directly affected by a consent agreement” within the meaning of subsection 106(2) of the Act, Kobo alleges that the CA is not based on terms that could be the subject of an order of the Tribunal, as required by that provision, because the Tribunal lacks both the “threshold” jurisdiction and the “remedial” jurisdiction to make any order under subsection 90.1(1).
[21]Pursuant to an Order of Justice Rennie, dated March 18, 2014 the registration of the CA has been stayed“pending the determination of Kobo’s application under section 106 of the Act”.
[22]On April 15, 2014, the Commissioner filed a Notice of Reference pursuant to subsection 124.2(2) of the Act, in which he posed the question set forth at paragraph 2 above. Given that the question posed is a question of law, no evidence was filed by either party. However, each of the Commissioner and Kobo included in their respective Book of Authorities similar excerpts from minutes of the meetings of the House of Commons Standing Committee on Industry, Science and Technology (the “Committee”), at which the language of what are now sections 105 and 106 of the Act was considered, amended, and effectively finalized. The parties are in agreement that those minutes are properly before the Tribunal.
D.SUMMARY OF THE PARTIES’ POSITIONS
(i)
The Commissioner
7
[23]The Commissioner submits that the Tribunal’s jurisdiction under subsection 106(2) of the Act is limited to reviewing the terms of a consent agreement to determine whether those terms:
i.are terms that could becontainedinan order issued by the Tribunal; and
ii.are so vague or ambiguous as to be unenforceable, or would lead to no enforceable obligation.
[24]For greater certainty, the Commissioner submits that the Tribunal does not have the jurisdiction in a proceeding under subsection 106(2) to consider the facts underpinning a consent agreement or any of the questions of law or mixed fact and law that would have been at issue had the matter proceeded as a contested case. These include whether the substantive elements set forth in subsection 90.1(1) have been met.
[25]In oral submissions, the Commissioner elaborated upon his position by stating that the words in subsection 106(2) refer to terms of a sort that the Tribunal could not issue under the substantive provisions pertaining to the relevant reviewable trade practice, that is to say, terms that are outside the four corners of the Act, in the sense that they are terms the Tribunal could never impose (my emphasis  Transcript, June 15, 2014, at pp. 56 and 81 (the “Transcript”)).
(ii)
Kobo
[26]Kobo submits that the correct interpretation of subsection 106(2) is one that allows the Tribunal to engage in some probing of facts and weighing of evidence to ensure that it would have had jurisdiction to make the order had the case proceeded as a contested matter. In its view, the extent of that probing and weighing will vary, depending on the section of the Act in relation to which the consent agreement is filed, the allegations contained in the application under subsection 106(2), and the circumstances of each particular case.
[27]In other words, Kobo submits that subsection 106(2) permits the Tribunal to go beyond comparing the terms of the consent agreement with the types of orders that the Tribunal has the remedial jurisdiction to impose, to assessing whether there is a substantive basis for making the
8
order. This would allow the Tribunal to “test the basis of” the consent agreement, including by assessing whether one or more substantive elements of that reviewable trade practice has been met. For example, in these proceedings, Kobo would like to make submissions on whether there is “an agreement or arrangement — whether existing or proposed — between persons two or more of whom are competitors”, as required by subsection 90.1(1).
[28]For greater certainty, Kobo clarified in its oral submissions that it does not wish to make submissions with respect to whether the impugned conduct of the Respondents “prevents or lessens, or is likely to prevent or lessen, competition substantially in a market,” as is also required by subsection 90.1(1). However, Kobo stated that it should be open to the Tribunal to assess this issue in an appropriate case (Transcript, at pp. 106 and 165176). E.ANALYSIS [29]The Commissioner asserts that Kobo’s position would:
i.be inconsistent with the overall purpose of the Act;
ii.frustrate Parliament’s intent in amending the Act, as evidenced by the legislative history of sections 105 and 106;
iii.be at odds with the scheme of the Act; and
iv.not be supported by a plain reading of subsection 106(2) of the Act.
[30]I generally agree with the Commissioner, although I have concluded that the proper interpretation of subsection 106(2) is not as narrow as he submits.
i.The Overall Purpose of the Act
9
[31]There does not appear to be any dispute between the parties that the purpose of the Act is to maintain and encourage competition, not for its own sake, but to achieve the four paramount objectives set forth in section 1.1, reproduced in section B above (Canada (Commissioner of Competition) v. Premier Career Management Group Corp), 2009 FCA 295, at para 60).
[32]In exercising his statutory mandate, the Commissioner benefits from a presumption that actions taken pursuant to the Act arebona fideand in the public interest (Commissioner of Competition v. Pearson Canada Inc.,2014 FC 376, at para 43). The Commissioner also has broad discretion to settle matters on terms that he considers advisable, provided that he does so within the bounds of the law. Settlements are an efficient way to resolve matters and they provide a means for a regulatory authority to achieve a flexible remedy that is tailored to address the interests of both the public and the person whose conduct is under investigation (British Columbia (Securities Commission) v. Seifert, 2007 BCCA 484 at para 31). Achieving resolutions that expeditiously address competition concerns with certainty and finality, and that provide market participants with clarity regarding the terms of settlement, are consistent with the broad purposes of the Act. Once again, there does not appear to be any disagreement between the parties with respect to these broad propositions, with which I agree.
[33]However, the parties disagree as to the relevance for this Reference of the presumption that actions taken by the Commissioner, including the entering into of consent agreements, are bona fideand in the public interest. The Commissioner’s position appears to be that this presumption lends support to his view that any ambiguity regarding the scope of the Tribunal’s jurisdiction under subsection 106(2) should be resolved in favour of a more narrow interpretation. I acknowledge that there is some merit to this position. Nevertheless, I agree with Kobo that there are limits to how far this presumption can be taken. In my view, any inconsistency between this presumption and the clear legislative history of subsection 106(2), the scheme of the Act or a plain reading of subsection 106(2) should be resolved against the presumption.
[34]There does not appear to be any disagreement between the parties with respect to the Commissioner’s submission that the words of subsection 106(2) should “be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act,
10
the object of the Act, and the intention of Parliament.” (Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 SCR 27, at para 21;Commissioner of Competition v. Sears Canada Inc., 2005 Comp. Trib. 2, at para 223);Interpretation Act, R.S.C. 1985, c. I21, s. 10).
[35]With the foregoing in mind, the Commissioner maintains that Kobo’s interpretation of subsection 106(2) would frustrate the purpose of the Act in at least three ways.
[36]First, as was the case with the former consent order process, which is further discussed in section E.ii of these reasons below, the Commissioner asserts that Kobo’s interpretation would add cost and engender delay to the resolution of competitive concerns. The Commissioner maintains that this would limit the number of matters to which the Commissioner could respond. More importantly, the delays would allow competitive problems to persist to the detriment of competition, Canadian business and Canadian consumers.
[37]I acknowledge that Kobo’s interpretation would have these results. However, in my view, the magnitude of the adverse effects is overstated by the Commissioner. In the overall scheme of things, it is not obvious to me that those effects alone would be greater than the unforeseen adverse effects to competition and the Canadian economy as a whole that might be established by a third party in a section 106(2) proceeding, under Kobo’s interpretation.
[38]Second, the Commissioner submits that Kobo’s interpretation would create uncertainty in respect of competition issues resolved by way of consent agreement. As was the experience under the consent order process discussed below, this uncertainty and the absence of finality would have a chilling effect on parties’ willingness to enter into consent agreements with the Commissioner.
[39]I agree. As further discussed in section E.ii below, it is common ground between the parties that this was an important part of the “mischief” associated with the former consent order process that Parliament sought to address when it enacted the existing consent agreement provisions in 2002 (Transcript, at pp. 1012 and 166).
[40]In my view, it is readily apparent that if, as Kobo suggests, persons directly affected by a consent agreement can challenge the basis for the Commissioner’s conclusion that one or more of the substantive elements of the relevant reviewable trade practice have been met, this would
11