Even More Changes Coming for the Competition Act and a Story About Rental Rates Shenanigans Illustrating Why It May Be Needed

Not content with the 2022 changes to the Competition Act, Canada was announcing this week that it will be looking into making even more changes, based on a consultation it has now undertaken. Use of technology is changing how society is going about things and the economy is of course following suit. In a context of constant changes, it’s not very surprising we also need to keep updating our statute that deals with preserving competition between businesses.

Canada will be looking to make changes such as those discussed in a recent document published by the government and which provided us with a fair indication as to what may be in store for the Competition Act, moving forward.

This is happening in Canada but other countries like the U.S. are experiencing the same kind of thing.

In a story that seems a good example of what we’re talking about, the Verge was reporting a story earlier this week about the U.S. Department of Justice (DOJ) looking into practices by some American landlords (lessors) potentially fixing prices for rental space (to a degree), by using the RealPage software to collaborate.

The story at issue relates to the fact that, nowadays, large landlords often subscribe to a platform called YieldStar (connected to RealPage) that easily allows them to share part of the data about their rental rates, in various markets. Over time, the system has enough data to suggest possible rentals rates to landlords looking to rent premises, as compared to other deals in the same area for such premises. In practice, this may lead to higher rates than would otherwise have been the case, had landlords not shared info like this.

In essence, if every landlord ends-up sharing data with other landlords in the market (in this instance, through use of a specific software), we may end-up with a coordinated effort that results in an increase in rental rates across the country. If this amounts to collusion, then legally there may be an issue of competition law, by the sheer use of RealPage and YieldStar, including certain message boards that are part of that offering. That’s the question the DOJ is looking into anyway.

Interesting fact pattern that’s symptomatic of the interaction which technology can have with competition law. Sharing is fine, but cartel-like practices may be crossing a line.

Subscriptions and Increasingly Intangible Intangibles: Where Does it Stop?

Without wanting to say too much about my age, I was part of the first generation to play computer games as kids. Yeah [says the guys adopting his Grandpa Simpson voice]: Back then, you bought it and could keep playing it ad nauseam, which included table-top games like Monopoly and console games like Pacman on my Atari 2600.

Well, the least one can say is that those days are gone… far gone. In today’s world, the way software and media are increasingly packaged basically did away not only with physical copies but with perpetual licenses altogether, rather turning everything into a something “as a service”.

You want a movie? Blockbuster’s gone, so are most DVDs and Blu-Ray discs, as most everyone turned to the likes of Netflix to watch movies and tv shows. Streaming is now the standard way to go about it. Heck, a friend was recently telling me Disney recently decided to do away with one of their stapes and stop selling copies of their movies on DVDs and the like. From now on (or soon anyway), you want to watch a Disney flick, you catch it in theaters or you stream it on Disney+. That’s it.

I think this speaks volumes about what’s been going on with media over the past 20 years or so. With the advent of the Internet, we collectively realized that no one needs to own… anything, really.

in today’s world, that even extends to software, of course. With quite a few companies discontinuing their apps and desktop software, rather opting to provide an equivalent that you can use through a browser, for example, the very concept of buying something that you control, call your own and can decide to keep around (or not) is quickly disappearing, software-wise anyway.

Of course, once you no longer own it, the producer of software can modify it at will, or even discontinue certain whole functionalities, at which point there’s fairly little you can really do about it. You really liked that cross-cell funky calculation function in that online application? Well, too bad, the producer elected to discontinue it, starting… oh yeah… yesterday. Don’t like it? Too bad for you.

Recently, I even saw this pushed one step further, when I realized a computer I was under the impression I had purchased (ah ah, fool) simply essentially disappeared overnight from STEAM, the widely used gaming platform. Yup, the game editor decided to pull that particular title and, of yeah, the effect was to essentially prevent those who had “purchased” it (or rather thought they did) to access or use it any longer. You liked that game? Too bad, it’s gone.

Heck, I’ve even read about certain car manufacturers abroad “innovating” (see those quotes?), by charging car “buyers” (see em’ again?) a monthly fee for the benefit of certain functionalities in their new vehicles, such as heated seats for $18 a month, etc. Yeah, seems in today’s world, businesses all want in on that subscription model. It’s just too good to pass on, it seems. Anyway, I don’t pretend telling anyone anything about this they didn’t already know. Just slightly amusing (if not outright tragic) to realize this is happening and that there precious little you and I can do about it. It’s just, as they say, the way it goes.

A Sign of the Globalizing of U.S. Trademark Law?

The U.S. Supreme Court is set to hear next year an appeal against a recent decision from Texas holding that American trademark law may sometimes be made to apply to foreign sales of trademarks merchandise. Yup, you read this right.

As one will remember, trademark law (as with most laws) may apply within a given country that adopted or applies this law but will not generally apply once you cross the border. Though there are plenty of exceptions to this, one can still rely on the fact that, in the normal course of things, rules that apply IN a country will not apply as to what goes on OUTSIDE of that country. For example, owning a Canadian trademark registration is nice, but it won’t allow you to stop a Brazilian company from selling goods in South America, even if they are stamped with that same specific trademark.

A recent American case (Abitron Austria v. Hetronic International) involves partly doing away with this, as the court at issue concluded that it could impose liability as to trademark infringement (to the sweet tune of $90M, no less) by basing the calculation of damages on worldwide sales by the infringer. According to the court in this case, demonstration by the plaintiff that it had lost sale IN the U.S. justifies granting it substantial damages because, well, you know, the bad guys caused an American company some lost sales, so they SHOULD be liable under American law, right? (This is a Texas case, need I say more?)

This is of course NOT how things work normally, which is why most businesses making sales abroad (including the likes of Amazon) can operate without getting constantly being sued in the U.S. because something they sold somewhere reflected a trademark that was protected in the U.S. Causing confusion in the U.S. that results in actual lost sales in the U.S. is one thing, but being on the hook just because you had the gull of making foreign sales is another altogether.

This may become really uncomfortable for a lot of business operating outside the U.S. if that specific case is allowed to stand and ends-up catching on. Were something like this to represent a shift in the way American trademark law handles U.S. trademark infringement claims when international sales by an “infringer” are involved, a lot of businesses (including Canadian ones) may end-up in trouble. Hmm, should I stop telling my clients that U.S. trademark registrations have an effect only in the U.S.?

The U.S. Supreme Court will hear this case next year and, hopefully for Canadian businesses, reconsider how damages were assessed in this particular case. We’ll see.