Canada Updates its Competition Act

I recently became aware of changes to the Canadian Competition Act (the Act) meant to modernize this piece of legislation, including to give it a little more teeth.

The changes at issue include the following, in case you hadn’t been following this (I hadn’t):

  • The act now prohibits “drip-pricing” by on-line retailers, as it may be tantamount to false (or misleading) advertising. This is familiar to anyone who has shopped on-line where you may be drawn to a particular source offering a what seems like a good deal, until you go through the whole process and realize fees and costs are successively tacked on, so that you end-up with a price that is substantially more than the “price” that attracted you in the first place.
  • Speaking of false (or misleading) advertising, the recent changes to the Act now allow courts to impose penalties that are no longer limited to fixed (capped) amounts. From now on, whenever a judge must impose a penalty on a given business for this, (s)he may elect to set the penalty according either to what profit the business derived from its misdeed, or better yet, on a percentage (3%) of its annual global revenue. Do I have your attention now?
  • Likewise, the recent changes also remove the cap on competition-related criminal penalties, instead providing that judges now have discretion under the Act as to the amount of penalties imposed on wrongdoers.
  • Anti-poaching agreements between employers are now a big no-no, as an unacceptable constraint on the working conditions of Canadian employees by what amounts to a form of cartel. As to this, one has to admit, if you allow business to agree between them to refrain from hiring from competitors, you’re seriously limiting the prospects of employees working in that industry.

The changes at issue came into effect on June 22, 2022.

Reuse of Clips from a CBC Broadcast, in Online Ads, Held Fair Dealing

The Federal Court (la «F.C.») recently gave us a copyright decision worth mentioning in Canadian Broadcasting Corporation v. Conservative Party of Canada (2021 FC 425), a judgment that provides us with a rare interpretation and application of the exception relating to criticism.

As one may remember, the Copyright Act (the “Act”) contains a series of exceptions allowing reuse of copyrighted content to certain ends that fall under the category of what the act consider “Fair Dealing”. One of those (described in Section 29.1 of the Act) allows using works for purposes of criticism, a specific exception that the F.C. had the opportunity to interpret in the recent CBC case.

This decision stems from a lawsuit by the CBC against the Conservative Party of Canada (the “CPP”) further to the use of video segments from a political debate (originally aired by the CBC) in online advertising run in 2019, without permission from the CBC. According to the CPP, given that the goal of the political ads at issue was to criticize the Prime Minister, the use of portions of CBC broadcasts should be protected as fair dealing. Contrary to the usual attempt to invoke the exception at issue, the criticism in this case was not a criticism of the work being copied (the broadcast itself) but rather criticism of an individual shown on-screen and the ideas and views he expressed. So, the question stood: could such criticism qualify under Section 29.1 of the Act so as to protect the CPP from an infringement claim?

Upon examining the issue, the F.C. had to agree that the goal of the ads at issue was clearly to criticize the Prime-Minister and his views and decisions. Given this, the F.C. concludes we are indeed in a situation where copyrighted materials was used for purposes of criticism. Given the treatment of fair dealing by the Supreme Court of Canada (and others) over the past few years, such exceptions should be interpreted broadly, so as to balance adequately the rights of creators with those of users.

According to the F.C., the exception relating to criticism may of course extend to the works that are reproduced but may also apply in other cases, including criticism of ideas, values and anything that has been expressed in the works that were reused. In the case at hand, portions of political debates during which the Prime-Minister expressed certain views could thus be reused for purposes of criticizing him, his ideas and his handling of certain issues. At law, this was clearly criticism.

Doing so, the F.C. sets aside a common interpretation of Section 29.1 of the Act, namely that this exception was included in the Act to solely allow criticizing works, including for example by literary critics. On the contrary, according to the F.C., nothing in this provision of the Act restricts what the criticism at issue can relate to. The article at issue simply allows reuse for purposes of criticism, without specifying what the criticism must relate to.

After holding this was indeed a case of reuse for purposes of criticism, the court then applied the usual test to determine whether reuse of the materials at issue in this case has been “fair”, agreeing it has been. Given the fair dealing defense applied, the F.C. rejected the infringement proceedings against the C.P.C.

The F.C. decision at issue represents yet one more example of a trend, during the last few years, as courts gradually broaden the meaning of fair dealing exceptions under Canadian copyright law.