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ToolsRelated topicsFee and Service Standards HandbookDecember 2003 IntroductionThe Competition Bureau is an independent law enforcement agency responsible for the administration and enforcement of the Competition Act, the Consumer Packaging and Labelling Act, the Textile Labelling Act and the Precious Metals Marking Act. Its role is to promote and maintain fair competition so that Canadians can benefit from lower prices, product choice and quality services. Headed by the Commissioner of Competition, the organization investigates anti-competitive practices and promotes compliance with the laws under its jurisdiction. Since November 1997, fees and applicable service standards as stipulated in the Competition Bureau's Fee and Service Standards Policy (Policy)1, have been in place for statutory merger notification filings, advance ruling certificate (ARC) requests, advisory opinions, and photocopies. This Handbook is intended to be used as reference material for those individuals or companies requesting the above-mentioned services and/or those who are bound by merger statutory requirements. The Handbook is also used by Bureau officers undertaking these activities as reference material. This Handbook is intended to provide guidance as to the type of information that should be included as part of a competition brief or additional submissions appended to a notification filing as well as in a request for a written opinion. These materials will assist the Bureau in its determination of the complexity of a proposed transaction or business conduct and will help expedite the review process.
BackgroundThe Bureau established fees in November 1997 pursuant to the Department of Industry Act (DIA) for a number of services and regulatory processes under the Act. These included statutory merger notification filings, ARC requests, advisory opinions, and photocopies. With fees came challenging, but attainable service standards. These standards were established to respond to timeliness and predictability concerns voiced by stakeholders and the requirement of federal government policy with respect to the imposition of any fee. Treasury Board policy requires that revenue generated from fees be used to improve the processes for which they were earned. Since adopting a fee structure six years ago, the Bureau has adhered to this policy. With respect to merger filings and ARC requests, which generate 99% of fee revenues, the Bureau undertook a major benchmarking exercise in 2000 of its merger review2 process. Improvements resulting from this in-depth study have helped the Bureau achieve increased efficiency, better client service and turnaround times, and improved training and career development. Without fees to fund the benchmarking project and subsequent ongoing process improvements, this progress would have been impossible. The increased fees better reflect the cost of merger review and of providing the new written opinions. Even at the new fee level, the Bureau continues to recover only partial costs. These changes will enable the Bureau to continue to deliver client service with enhanced efficiency and timeliness.
PrinciplesThe Bureau views the 1997 introduction of fees and related service standards as having promoted a more disciplined approach for identifying and measuring its performance. The Bureau is committed to ensuring that those who seek services, or are bound by regulatory requirements, have timely and systematic opportunities to provide input regarding service levels and standards. To ensure that stakeholders have an opportunity to voice comments about the policy, the Bureau has held a forum every two years. These fora also give the Bureau an opportunity to report publicly on its performance. The Bureau's Policy is consistent with the government's overall objective of fairness, which seeks to ensure that those who benefit most from a service should pay for it, rather than have all Canadians pay through general taxation. The Policy also recognizes the "public good" component related to the activities covered by the Policy. These fees have been developed within this framework and in consideration of other government and Bureau policy objectives.
The Bureau's Contact InformationTable 1 lists the addresses where requests for the services and regulatory processes outlined in this Handbook may be sent. It also lists contact information for those requiring clarification or having questions regarding a particular matter. Table 1: Contact Information
Review/Feedback MechanismsParties requesting the services outlined in this document or who are subject to merger notification requirements are invited to provide feedback to the Bureau by completing the brief evaluation cards enclosed with each response. These cards are mailed to the Bureau's Compliance and Operations Branch who prepares monthly reports for the respective branches. Parties who wish to remain anonymous can omit providing their names when completing the cards. In order to maintain the respondent's anonymity, the branches responsible for providing these services and statutory requirements do not have access to the completed feedback cards. Additionally, the Bureau will continue to conduct fora every two years to review performance, service levels, and any concerns voiced by stakeholders. Complaints regarding services and regulatory processes for which fees and service standards apply can be directed to the Deputy Commissioner of Competition, Compliance and Operations Branch. The Deputy Commissioner will examine the matter and provide the subsequent feedback to the complainant. The Compliance and Operations Branch is not involved in providing the services outlined in this document or in conducting merger review. As such, the Deputy Commissioner remains independent and objective when resolving any complaints. Following is the contact information for the Deputy Commissioner of Competition, Compliance and Operations Branch:
On application, any resolution deemed by the complainant to be unsatisfactory will be further investigated by the Commissioner of Competition ("the Commissioner"). Complainants will receive feedback as well as information regarding any subsequent resolutions or decisions relating to the original complaint. Following is the Commissioner of Competition's contact information:
All complaints will be handled in the strictest confidence. Summary, Fees and Service StandardsTable 2: Service/Regulatory Process Fees and Service Standards
*A Service Standard represents the maximum time within which the Bureau will endeavour to provide a response.
Merger ReviewSince the Handbook was first published in 1997, a number of changes have affected Part IX (Notifiable Transactions) of the Act and the information required to be submitted. Specifically, in January 2000, amendments to Part IX and the Notifiable Transactions Regulations5 came into force. The regulations outline the information required to be submitted in a merger notification filing. The amount of information required was also made more comprehensive in order to facilitate the merger review process. In addition, the Bureau has published a Procedures Guide for Notifiable Transactions and Advance Ruling Certificates and a series of Interpretation Guidelines6. Parties are encouraged to review these documents for additional guidance. As the following information is necessarily general in nature, parties are encouraged to contact the Merger Notification Unit (MNU) at the telephone numbers provided in Table 1. Merger notification filings and ARCs Pursuant to Part IX of the Act, merger notification filings are required in respect of specified proposed transactions. Generally, notification is required when the parties to a transaction, together with their affiliates, have combined assets in Canada or annual gross revenues from sales in, from or into Canada greater than $400 million in aggregate value and the specific transaction involves:
When these thresholds are met, the persons proposing the transaction are required to notify the Commissioner of the proposed transaction and provide the information specified in the Notifiable Transactions Regulations. In addition, parties to a notifiable transaction are required to wait for the expiry of a specified waiting period before completing the transaction7. The provisions of Part IX of the Act are complex. If in any doubt, parties to a transaction should seek legal advice on the applicability of the provisions in their particular case. Under section 102 of the Act, where the Commissioner is satisfied by the parties to a proposed transaction that he would not have sufficient grounds to apply to the Competition Tribunal for a remedial order under section 92, the Commissioner may issue an ARC in respect of the proposed transaction. Issuance of an ARC by the Commissioner exempts the transaction from application of the notifiable transactions provisions when the transaction is completed within one year of the date of issuance. Where the Commissioner exercises the discretion not to issue an ARC, parties may still be required to provide a merger notification filing to the Commissioner before proceeding with their transaction, if the applicable thresholds are exceeded. However, in these circumstances, the Commissioner or a person authorized by the Commissioner has the discretion under ss. 113(c) of the Act to waive merger notification when substantially the same information required in a merger notification filing was provided in the ARC request. Since the implementation of the merger provisions of the Act in 1986, the Bureau has adopted a flexible, compliance-oriented approach for the review of merger cases. Counsel to the parties typically will produce a competition brief, which will provide background information on the transaction and the industry, and present the views of the parties on the major issues that have to be analysed. In some cases supporting documentation is provided. These materials and initial discussions with the parties are often useful as an introduction to the matter and may help focus the subsequent examination on key issues. Initial materials and discussions are complementary to, but not a substitute for, the normal examination process. In most non-complex cases, a minimal amount of information is required by the Bureau to prepare a timely decision, and it is usually not necessary for Bureau staff to obtain a significant amount of information from third parties such as customers, competitors and suppliers in order to verify the submissions of the parties. Depending on the nature of the matter, written or oral requests for information and documents will be made to the parties. In a few cases, such requests may be very extensive, may be requested under oath or may require the exercise of formal powers. In addition, an important part of the examination in many complex and very complex cases will be the collection of information from other market participants, including customers, competitors, suppliers, industry associations and government regulatory agencies. In a few cases, particularly in very complex cases, the Bureau will engage outside economic and industry consultants to assist in the examination process. Merger Notification Unit (MNU) The MNU is responsible for receiving and initially processing Part IX filings and ARC requests. It also deals with issues of the application and interpretation of Part IX and conducts the assessment of many non-complex matters. Upon receipt of a statutory filing or ARC request, the MNU reviews the information and documentation to ensure it satisfies the requirements provided for in the Act, Bureau publications including the Interpretation Guidelines, as well as the information requirements included in this Handbook. If the information and documentation is not complete, a MNU representative will contact the party (through counsel) to clarify what is required in order to satisfy compliance with the Act and/or the Fee and Service Standards Policy. Once a complete filing or ARC request is received, a senior competition law officer of the Mergers Branch will classify the transaction's complexity, usually within five business days, and assign it to a Bureau officer to commence its investigation. An explanation of the applicable complexity level and service standard period is provided to the parties in writing at that time. The MNU will provide non-binding assistance by telephone on the application of the Part IX provisions but such advice is limited to simple issues. Parties with concerns raising complicated fact scenarios or legal issues are encouraged to seek private legal counsel and, if desired, request a written opinion under section 124.1 of the Act (see page 32). The MNU reviews trade publications and media to ensure the Bureau has been notified of all relevant transactions. In appropriate cases, parties to transactions that appear to be notifiable, and for which no filing has been made, will be contacted by the MNU to seek compliance with Part IX if necessary. Where parties, or their counsel, discover a failure to notify, they are encouraged to contact the MNU as soon as possible. Failure to notify is a criminal offence pursuant to the Act. Non-complex transactions are readily identifiable by the absence of competition issues and the minimal amount of work required to complete assessments. There is no or minimal competitive overlap between the parties. Mergers where the parties' combined post merger market share is less than 10% generally fall within this category. Examples of non-complex transactions include many mergers in unconcentrated industries such as upstream oil and gas exploration and extraction, (this would exclude pipelines, processing/refining and distribution), mining (where the parties are not significant players in Canada), and real estate. Other examples include management-led buy-outs, sale and lease-back agreements, increases in share holdings that result in changes from de facto (in fact) to de jure (in law) control (i.e. 40% to 55% control), and international mergers where only one of the parties has a significant presence in Canada. Most non-complex transactions are brought to the Bureau's attention by way of Advance Ruling Certificate requests or short form merger notification filings. Approximately 80% of merger transactions fall within the non-complex category. Complex mergers involve transactions between direct or potential competitors or between customers and suppliers where there are indications that the transaction may create or enhance market power, as described in the enforcement policies set out in the Merger Enforcement Guidelines8. Generally, they occur in concentrated industries where there are barriers to entry. Complex merger transactions often generate unsolicited, credible complaints regarding the creation or enhancement of market power. As well, mergers that have multiple product and geographic market overlap where there are market power indicators, will usually fall into the complex category. Other examples of complex mergers include those within new or emerging industries, mergers in industries going through a process of deregulation, transnational mergers resulting in multi-jurisdictional competition reviews where there is a need for cooperation and coordination among the reviewing agencies, and mergers that give rise to uncertain market definitions that require third party confirmation or input. The assessment of complex merger transactions usually presents one or more analytical challenges, such as defining the correct relevant market, evaluating the effectiveness of remaining competition, assessing potential sources of new competition, or determining the impact of change and innovation in a market. In addition to reviewing issues with the merging parties and their counsel and reviewing precedent cases, complex merger examinations require third party contacts to obtain information and test the merging parties' submissions and additional information requests. The examination usually involves two or more officers from the Mergers Branch working as a team and may require economic and legal support. Approximately 15% of merger transactions fall within the complex category. A very complex case is typically characterised by indications early in the preliminary examination that the transaction is likely to create or enhance market power according to the enforcement policies set out in the Merger Enforcement Guidelines. Generally, mergers between the leading participants in concentrated industries, where it is reasonable to conclude the market share and concentration thresholds set out in the Merger Enforcement Guidelines are surpassed, and where high barriers to entry are evident, fall within this category. These transactions often involve considerations of complex areas of inquiry such as the failing firm factor or efficiencies defence, as well as other considerations such as the availability of a practical remedy or a unique theory of anti-competitive harm. The latter consideration is particularly important in merger cases where a prevention of competition or vertical issues are evident. Differing interests of third parties, (eg. customers and suppliers) well substantiated complaints, or competing public policy objectives, (eg. trade protection and competition) are often evident in the analysis of very complex merger transactions. Very complex merger transactions necessitate substantial assessments and a greater volume of work than that which is required in complex transactions. Usually, very complex cases quickly progress to the formal inquiry stage and involve the use of formal powers to obtain information. The work requires the use of case teams consisting of three or more officers, economists from the Economic Policy and Enforcement Division of the Competition Bureau, legal counsel, as well as outside experts. Approximately 5% of merger transactions fall within the very complex category. The experience of the Mergers Branch has been that the more substantive and complete the competition brief and accompanying documents are at the initial stages of a matter, the more focussed and expeditious the review process becomes. This generally translates into specific and shorter subsequent requests for information and fewer, more focussed third party contacts. As a result, stakeholders benefit from a more timely resolution and at the same time, the Bureau has the opportunity to conduct a thorough examination of all the relevant issues. No or Minimal Competitive Overlap In cases where the parties request the Commissioner to provide an ARC regarding a transaction where there is no or minimal competitive overlap, the following information should be provided with the request:
Moderate Competitive Overlap In cases where there is a moderate degree of competitive overlap and industry concentration, the Bureau typically will require more information than referred to immediately above. Examples would include mergers in markets where the combined market shares of the parties are greater than 10%, but less than 35% where there do not appear to be concerns about creating or enhancing market power. In addition to the information required in section 16 of the Notifiable Transactions Regulations parties should also submit:
Complex and Very Complex Transactions The key points that need to be addressed in any merger review are the definition of product and geographic markets, conditions of entry, market shares/concentration, and the degree of effective competition remaining after the proposed transaction. The Bureau almost always requires a long form filing in very complex cases. Where gains in efficiencies or the failing firm factor are relevant, these also need to be assessed. The competition brief should provide the parties' views on these issues and provide supporting documentation. In preparing these materials, it will be useful to review the Merger Enforcement Guidelines that set out in detail the approach taken by the Bureau for each of the factors to be considered in a merger review. The Bureau is receptive to meeting with parties at the pre-filing stage in order to discuss filing procedures and requirements. In addition to discussing the anticipated complexity level, the Bureau will discuss which of the prescribed forms should be submitted and what other information would be required. Additionally, where the transaction is a transnational merger involving a multi-jurisdictional competition review, it is the Bureau's experience that early discussion on international inter-agency cooperation is very useful. The Bureau has found that relevant pre-existing business documents used in the normal course of operations are very useful in assessing the factors to be considered. Parties are strongly advised to include the documents required under section 17 of the Notifiable Transactions Regulations and:
In considering what documentation to include, the parties should exercise judgement about relevancy, duplication and usefulness. In addition, where such documents may leave a false impression or provide an incomplete picture, the parties should provide a commentary that addresses these deficiencies. Failure to do so may undermine the value of the advice the parties receive from the Bureau or may result in extending the period of time required by the Bureau to conduct its review. The parties and their counsel are encouraged to discuss any questions or concerns they may have about the type of information or documents that may be useful in any particular circumstances with the staff of the MNU as listed in Table 1. The Bureau aims to provide a response to requests for merger notification and ARC requests within the service standard time frames indicated in Table 3. The service standards assume cooperation in the course of an examination. In the event that the Bureau is unable to meet these service standards, parties will be provided in advance of the service standard end date, the reasons for it not being met, and the date parties should expect a response. Table 3: Service Standards
*A Service Standard represents the maximum time within which the Bureau will endeavour to provide a response. Within five days of receipt of a complete request, parties will be informed of the complexity level and applicable service standard. The service standard commences the next business day after a complete request is received. A request is considered complete once all of the information requirements, as set out in this Handbook, have been fulfilled. In the vast majority of cases, the information requirements set out in this Handbook will be sufficient for the Bureau to complete its assessment. However, in exceptional circumstances, additional information may be required. If, during its review, the Bureau requires more information to complete its assessment, a supplementary information request will be made to the party(ies) in writing. Table 4 sets out the maximum number of days or weeks within which a supplementary information request should be responded to in order for the Bureau to meet the applicable service standard. If the supplementary information is not received within the time frames identified in Table 4, the Bureau will suspend the service standard ?clock' the day after the deadline and notice to this effect will be sent in writing to the parties. Once the supplementary information is received, the service standard ?clock' will resume. Parties will be notified in writing that the service standard period has resumed and informed of the new date they should expect a response. Table 4: Time frames for supplementary information requests
As noted above, market participants are often an important source of information in the examination process. Accordingly, the Bureau must be in a position to discuss the proposed transaction with such participants. It is suggested that the proposed transaction be made public at or before the time of notification or application for an ARC. Where the parties would prefer to delay the public announcement of the proposed transaction, the Bureau will defer making market contacts, provided there will be sufficient time before closing to contact such market participants as the Bureau considers necessary. In such instances, however, the time periods for review noted above will not begin to run until such time as the Bureau is in a position to make third party contacts. Payments may be made by VISA, MasterCard, wire transfers9, or by cheque payable to the Receiver General for Canada. ARC requests are subject to the GST; Québec residents add provincial sales tax and Newfoundland, New Brunswick and Nova Scotia residents add the HST. Table 5: Fees and Applicable Taxes10 for Merger Review
Refund Policy Upon written request, refunds will be provided in the following circumstances:
Written OpinionsPursuant to its Program of Compliance, the Bureau will continue to promote and ensure compliance with the provisions of the Act through a variety of mechanisms including a program of communications and education13 and the use of specific instruments such as written opinions. Since 1997, stakeholders have requested that advisory opinions, provided within the Fee and Service Standards Policy, be legally binding. With the enactment of Bill C-23, now chapter 16 of the Statutes of Canada 2002, section 124.114 of the Act provides that the Commissioner may issue legally binding written opinions. If in doubt about a proposed course of action, any person may apply to the Commissioner, with supporting information, for an opinion as to the applicability of the Act and regulations to the proposed conduct or practice. Pursuant to section 124.1 of the Act, written opinions are binding on the Commissioner if all the material facts have been submitted and these facts are accurate. Written opinions remain binding for so long as the material facts remain substantially unchanged and the conduct or practice is carried out substantially as proposed. The quality of the opinion is directly related to the amount and quality of relevant information provided to the Bureau by the applicant. Written opinions are based on current law and jurisprudence and are predicated on the assumption that the facts, as set out in a request, are accurate, that no material facts have been omitted or misrepresented in the submission, and that the Bureau's understanding of the facts is accurate. The Bureau will not undertake third party contacts in the preparation of written opinions. However, there is an exception with respect to requests for written opinions under section 74.01(1)(b) of the Act concerning representations relating to performance, efficacy or length of life of a product where the Bureau may seek independent review of any such claim and/or tests accompanying an applicant's product. Where the information requirements set out below are not met in a request, the Commissioner may exercise the discretion to not provide an opinion. Appendix A is a sample letter indicating the form most written opinions will take. The Bureau will continue to provide informal oral advice in instances where the issues are not complex and the request takes little or no research on the part of Bureau staff. The response will be based on the oral request by the applicant, the stated policies of the Commissioner, previous experience, and knowledge. This type of oral advice typically comprises a 10 to 15 minute telephone call and will not be binding on the Commissioner. To promote compliance with, and foster transparency in the administration and enforcement of the Act, the Bureau may publish written opinions, or summaries thereof, that add to the understanding of how the law is administered or where a new issue or sector of the economy is being examined. Should the Bureau wish to publish an opinion in its entirety, a Bureau representative will contact the party within 30 days to seek consent. If the party objects, the Bureau will edit the opinion to remove company names and/or produce a summary of the opinion that protects identities and commercially sensitive information. Non-complex written opinions Non-complex opinions are those that deal with a proposed business conduct or practice where all related and pertinent information is provided by the applicant. An opinion will be classified as non-complex when there is a sufficient amount of jurisprudential information and established Bureau policy and procedures for the Bureau to formulate an opinion and obtain concurrence from the Department of Justice. Complex written opinions Complex opinions are those that deal with a proposed business conduct or practice where all related information is provided by the applicant. An opinion will be classified as complex when the proposed conduct or practice deals with a novel issue, and/or where there is little or no jurisprudential information, and/or no previous interpretation on the particular subject by the Bureau. Also, economic guidance and/or a legal opinion may be required. Business plans will vary in complexity and impact. It is not the Bureau's intention to burden the business community unnecessarily with onerous information requirements. The categories of information mentioned below are general. Parties are therefore invited to contact the Bureau in advance to allow for the submissions to focus on the key aspects of the specific proposal (refer to Table 1 for contact information). In addition to these general requirements, specific information may be required for the sections of the Act relevant to the request. The requirements for sections for which requests are most often received are outlined below. If you wish to request a written opinion with respect to a section of the Act not identified in this Handbook, please contact the Bureau prior to making your request. A Bureau officer will be able to tell you what information should be included. Information that is helpful to the Bureau in responding to a request for a written opinion will, in most cases, relate to the assessment of how the proposed business plan will affect the level of competition in a specific market. Following an initial determination and depending on the complexity of the issue, or the details of a proposed plan, other specific information may be needed to analyse the manufacturing, distribution, sales, pricing, promotional or other situation contemplated by those requesting the opinion. In order to determine whether or not a company's proposed activities would adversely affect competition or an individual's business, the Bureau must be able to define, with great specificity, the nature, use, and attributes of the product and of its substitutes, if any. It is then necessary to determine within which geographic market the product is produced and sold. The following is a non-exhaustive list of elements the Bureau generally uses to make these determinations: Civil Provisions: Sections 75, 77, 78, 79 and Criminal Provisions: Sections 45, 50, 61 Product Market
Geographic Market
Following are descriptions of the more specific information required with respect to a particular section of the Act. Civil Provisions: sections 75, 77, 78, 79 Section 75: Refusal to Deal Written opinion requests relating to refusal to deal should include the following additional information:
Sections 77, 78, 79: Exclusive Dealing, Tied Selling, Market Restriction, and Abuse of Dominant Position Written opinion requests relating to exclusive dealing, tied selling, market restriction, and abuse of dominant position should include the following additional information:
Criminal Provisions: Sections 45, 50, 61 Section 45: Conspiracy Written opinion requests relating to conspiracy should include the following additional information:
Section 50(1)(a): Price Discrimination Written opinion requests relating to price discrimination should include the following additional information:
Section 50(1)(c): Predatory Pricing Written opinion requests relating to predatory pricing should include the following additional information:
Section 61: Price Maintenance Written opinion requests relating to price maintenance should include the following additional information:
Misleading Representations and Deceptive Marketing Practices (Sections 52 to 55.1 and 74.01 to 74.06) Written opinions may be requested by parties on proposed representations, advertisements, promotional material, and business plans to determine the applicability of the misleading representations and deceptive marketing practices provisions of the Act. Written opinions may be requested with regard to provisions that deal with criminal offences or reviewable practices. Examples of the materials that may be submitted for a written opinion are: any proposed advertisement, solicitation, or notice including any telemarketing script; representations that include claims relating to performance, efficacy or length of life of a product; representations that relate to ordinary selling price; multi-level marketing plans; and promotional contests. The information required by the Bureau to prepare a written opinion is described below. General Information Required for All Requests A clear description of the proposed representation and/or business plan accompanied by all relevant supporting information as set out in the following paragraphs will ensure that the representation and/or business plan is assessed in relation to the most appropriate provisions of the Act.
In addition to the above general information requirements, following are descriptions of the more specific information required with respect to a particular section of the Act. Section 52.1: Deceptive telemarketing Written opinion requests relating to telemarketing should include the following additional information:
Section 53: Deceptive notice of winning a prize Written opinion requests relating to notices of winning a prize should include the following additional information:
Sections 55 and 55.1: Multi-level Marketing and Pyramid Selling16 Written opinion requests relating to multi-level marketing plans should include the following additional information:
Section 74.01(1)(b): Representations not based on adequate and proper test The applicant is responsible for ensuring that representations related to the performance, efficacy and length of life of the product are based on adequate and proper tests. The Commissioner may exercise the discretion not to provide a written opinion if additional tests are necessary to determine if the proposed representations are based on adequate and proper tests. Written opinion requests relating to such claims should include the following additional information:
Subsection 74.01(2): Misleading price representations - Suppliers Generally Written opinion requests relating to comparative price representations, where reference prices are based on market prices, should include the following additional information, as applicable:
Subsection 74.01(3): Misleading price representation - Suppliers Own Written opinion requests relating to comparative price representations, where reference prices are based on the supplier's own prices, should include the following additional information, as applicable:
Section 74.06: Promotional Contests Written opinion requests relating to promotional contests should include the following additional information:
If submitting artwork for an opinion, ensure that all visuals and copy are readable. If the contest is to be advertised in different media or in different versions, ensure that all material relating to each version and media type is submitted as an opinion only applies to the content of the particular request and is not applicable to any other representations made in the course of the promotion. Merger Notification Provisions: Part IX and the Notifiable Transactions Regulations17 General Parties seeking a written opinion respecting a question of interpretation or application of Part IX of the Act or the Notifiable Transactions Regulations, should submit all relevant information necessary to understand the question, its context, and all material facts necessary for a meaningful application of the requested interpretation or application of the law. This includes:
Parties considering requesting a written opinion pursuant to Part IX of the Act or the Notifiable Transactions Regulations are encouraged to contact the MNU (refer to Table 1 for contact information) beforehand in order to discuss what information may be relevant. Parties seeking an opinion respecting a proposed transaction should request an ARC pursuant to s.102 of the Act. Part IX Written Opinion Complexity Definitions Non-complex opinions are those that deal with questions of interpretation or application of Part IX of the Act or the Notifiable Transactions Regulations where all related and pertinent information is provided by the applicant. An opinion will be classified as non-complex when there is a sufficient amount of jurisprudential information and established Bureau policy and procedures for the Bureau to formulate an opinion. Complex opinions are those that deal with questions of interpretation or application of Part IX of the Act or the Notifiable Transactions Regulations where all related information is provided by the applicant. An opinion will be classified as complex when the question deals with a novel issue, and/or where there is little or no jurisprudential information, and/or no previous interpretation on the subject by the Bureau. Also, economic and/or legal guidance may be required.
Service StandardsThe Bureau aims to provide a response to requests for written opinions within the service standard time frames indicated in Table 6. The service standards assume cooperation in the course of an examination. In the event that the Bureau is unable to meet these service standards, parties will be provided in advance of the service standard end date, in writing, the reasons for it not being met, and the date parties should expect a response. Table 6: Service Standards for Written Opinions
*A Service Standard represents the maximum time within which the Bureau will endeavour to provide a response. Within five days of receipt of a complete request, parties will be informed of the complexity level and applicable service standard. The service standard commences the next business day after a complete request is received. A request is considered complete once all of the information requirements, as set out in this Handbook, have been fulfilled. In the vast majority of cases, the information requirements set out in this Handbook will be sufficient for the Bureau to complete its assessment. However, in exceptional circumstances, additional information may be required. If, during its review, the Bureau requires more information to complete its assessment, a supplementary information request will be made to the party(ies) in writing. Table 7 sets out the maximum number of days within which a supplementary information request should be responded to in order for the Bureau to meet the applicable service standard. If the supplementary information is not received within the time frames identified in Table 7, the Bureau will suspend the service standard ?clock' the day after the deadline and a notice to this effect will be sent in writing to the parties. Once the supplementary information is received, the service standard ?clock' will resume. Parties will be notified in writing that the service standard period has resumed and will be informed of the new date they should expect a response. Table 7: Time frames for supplementary information requests
The service standard ends when the opinion has been mailed to the applicant and/or the party receives verbal confirmation followed by the written response. Payments may be made by VISA, MasterCard, wire transfers20 or by cheque payable to the Receiver General for Canada. Written opinions are subject to the GST; Québec residents add provincial sales tax and Newfoundland, New Brunswick and Nova Scotia residents add the HST. Table 8: Fees and Applicable Taxes21 for Written Opinions
Fees for written opinions should be submitted at the same time the application is made22. The person making the request is responsible for payment. Only one fee applies for a written opinion that might involve the review of multiple sections of the Act. The Bureau will continue to charge $50 to charitable organizations23. Refunds will be provided in the following circumstances:
Due to the short service standards for non-complex written opinions concerning sections 52, 52.1, 53, 54, 55, 55.1, 74.01(1)(a), 74.01(1)(c), 74.01(2), 74.01(3), 74.02, 74.04, 74.05, 74.06 of the Act, refunds will not be provided.
PhotocopiesFees for photocopies apply to requests for copying services made to the Bureau, including requests for copies of documents seized under warrants issued pursuant to section 15 of the Act that have not been returned to the parties from whom they were seized. Bureau policy does provide that parties subject to a search may make copies of essential working documents prior to their being removed from the premises. Payments may be made by VISA, MasterCard, or by cheque payable to the Receiver General for Canada and wire transfers24. Photocopies will be subject to a fee of $0.25 per page and are subject to GST; Quebec residents add provincial sales tax; Newfoundland, Nova Scotia and New Brunswick residents add the HST. The fee is payable once the work has been completed. Table 9: Fees and Applicable Taxes25 for Photocopies
Appendix ASample Letter of a Written Opinion
Date: Name Dear Mr. _______: Re: Written Opinion I am writing in response to your letter of date, in which you request a written opinion under section 124.1 for guidance on the application of the Competition Act (the "Act") to your proposed business conduct. Section 124.1 of the Act states that: "Any person may apply to the Commissioner, with supporting information, for an opinion on the applicability of any provision of this Act or the regulations to conduct or a practice that the applicant proposes to engage in, and the Commissioner may provide a written opinion for the applicant's guidance." This opinion seeks to facilitate business conduct by indicating whether a proposed conduct or practice would provide the Commissioner of Competition ("Commissioner") with sufficient grounds to commence an inquiry on his/her own initiative pursuant to paragraph 10(1)(b) of the Act. You should understand that the Commissioner has no authority to decide the law. In addition, you should be aware that the Commissioner, under certain circumstances, is obliged to commence an inquiry under paragraphs 10(1)(a)26 and 10(1)(c)27 of the Act. This opinion has been prepared based on the information provided and taking into account current jurisprudence and opinions, Bureau knowledge and the stated policies of the Bureau. Based on our understanding of the facts, and the information that you have provided, it is our opinion that your proposed business conduct would or would not provide the Commissioner sufficient grounds to commence an inquiry. Our understanding of the facts, based on the information that you have provided, is as follows. The Proposed Plan or Business Conduct Because the Bureau will make a decision based on the information provided by the parties involved, the information that the Bureau has relied on will be included in this portion of the opinion. The Parties (if required) The Bureau will provide a brief description of the parties involved. Competition Analysis (if required) This matter was reviewed under section XX (or sections, X, Y and Z) of the Act and the following issues were examined: The Bureau will proceed to describe its analysis of the transaction using all the information provided by the applicant, jurisprudence, etc. Conclusion This opinion is based on current law and jurisprudence and is predicated on the assumption that the facts, as set out in your request, are accurate, that no material facts have been omitted or misrepresented in your submission, and that our understanding of the facts is accurate. This opinion is binding so long as the facts provided are accurate, the material facts remain unchanged, the conduct or practice is carried out substantially as proposed, and the law and jurisprudence remain unchanged. Should any of these factors change, you should apply for a new opinion. If applicable: To promote compliance with, and foster transparency in the administration and enforcement of the Act, the Bureau may publish written opinions, or summaries thereof, that add to the understanding of how the law is administered or where a new issue or sector of the economy is being examined. Name of Bureau Officer, will contact you within 30 days to seek consent to publish this opinion in its entirety. If you object, the Bureau will edit the opinion to remove company names and/or produce a summary of the opinion that protects identities and commercially sensitive information. If you have any further questions or require clarification of this letter, please do not hesitate to contact Mr. X/Ms. Y at telephone number or e-mail or fax. Yours sincerely,
1 The Fee and Service Standards Policy can be found on the Bureau's Web site at www.cb-bc.gc.ca under Business Services, Fees and Service Standards. 2 The Merger Review Benchmarking Report can be found on the Bureau's Web site at www.cb-bc.gc.ca under Merger Info. 3 These sections deal with conspiracy, foreign directives, "bid-rigging", conspiracy relating to professional sport, agreements or arrangements of federal financial institutions, illegal trade practices, definition of "allowance", and abuse of dominant position. 4 These sections deal with false or misleading representations; deceptive telemarketing; deceptive notice of winning a prize; double ticketing; multi-level marketing and pyramid selling; misleading warranties and guarantees; misleading price representations; untrue, misleading or unauthorized use of tests and testimonials; non-availability of advertised specials; sale above advertised price; and promotional contests. 5 The Notifiable Transactions Regulations can be found on the Bureau's Web site at: www.cb-bc.gc.ca under Merger Info. 6 These documents can be found on the Bureau's Web site at www.cb-bc.gc.ca under Merger Info. 7 14 and 42 days pursuant to paragraphs 123(1) (a) and 123(1) (b) of the Act respectively, depending on the type of notification filed. 8 The Merger Enforcement Guidelines can be found on the Bureau's Web site at: www.cb-bc.gc.ca under Merger Info. 9 For further information regarding wire transfers, parties should contact the Bureau - see Table 1. Parties should also consider any administrative fees from financial institutions. 10 Only Canadian residents pay Canadian taxes. 11 When both a merger notification filing and ARC request are filed with respect to the same transaction, only the fee for an ARC applies. 12 On occasion, there have been difficulties collecting payment from clients. Following up with clients to receive payment can be time consuming and costly. 13 Additional information on the Bureau's Program of Compliance is available on the Bureau's Web site at: www.cb-bc.gc.ca under Compliance and Enforcement. 14 Section 124.1 of the Competition Act as enacted by clause 15
of Chapter 16, S.C.2002, states that: 15 Two requests are required because different languages could create nuances that may produce different general impressions. 16 The Commissioner may exercise the discretion to not issue an opinion with respect to certain multi-level marketing plans which promote products where there is difficulty in establishing their value such as gold or silver coins, discount or debit cards, or products of the travel industry. When the value of a product cannot be accurately established, it is difficult to determine whether its purchase price includes consideration which is being paid for the right to receive bonuses for the recruitment of participants to the plan. Additionally, an opinion will not be provided where the operator of the plan is situated outside of Canada and there is no entity incorporated in Canada, or where there is no individual located in Canada who accepts liability for the actions of the operator in Canada. 17 A written opinion cannot take the place of an ARC request or short/long form filing regarding the notification requirements set out in Part IX or the substantive review of the competitive effects of a (specific) merger. 18 These sections deal with conspiracy, foreign directives, "bid-rigging", conspiracy relating to professional sport, agreements or arrangements of federal financial institutions, illegal trade practices, definition of "allowance", and abuse of dominant position. 19 These sections deal with false or misleading representations; deceptive telemarketing; deceptive notice of winning a prize; double ticketing; multi-level marketing and pyramid selling; misleading warranties and guarantees; misleading price representations; untrue, misleading or unauthorized use of tests and testimonials; non-availability of advertised specials; sale above advertised price; and promotional contests. 20 For further information regarding wire transfers, parties should contact the Bureau - see Table 1. Parties should also consider any administrative fees from financial institutions. 21 Only Canadian residents pay Canadian taxes. 22 On occasion, there have been difficulties collecting payment from clients. Following up with clients to receive payment can be time consuming and costly. 23 The Income Tax Act's definition of a charitable organization will be used to determine the applicability of this stipulation. 24 For further information regarding wire transfers, parties should contact the Bureau at the coordinates listed in Table 1. Parties should also consider any administrative fees from financial institutions. 25 Only Canadian residents pay Canadian taxes. 26 Paragraph 10(1)(a) provides that six Canadian residents, under certain circumstances, can require that the Commissioner commence an inquiry. 27 Paragraph 10(1)(c) provides that the Minister may direct the Commissioner to commence an inquiry ![]() |