On July 29, 2020, the Canadian Competition Bureau (Bureau) released draft Competitor Collaboration Guidelines (Draft Guidelines) for public consultation. The Draft Guidelines are intended to help businesses better assess whether a collaboration between competitors or potential competitors raises concerns under the criminal or civil provisions of the Competition Act (Act), and are described by the Bureau as “modest updates” to the Bureau’s 2009 guidelines. The updates contain a number of proposed revisions which signal a broader enforcement discretion for the Bureau, the most notable of which are summarized below.
- Non-Compete Clauses are Potentially Subject to Broad Review. The current Guidelines indicate that non-compete clauses in merger agreements would be examined under the Act’s merger review provisions. However, the Draft Guidelines now state that where a non-compete amounts to a standalone restraint, it may be examined separately under the criminal or civil competitor collaboration provisions of the Act.
- Consortium Bids May Be Subject to Civil Review. Bids made by consortiums may be subject to review under the civil competitor collaboration provision if they substantially lessen or prevent competition, even where the party who requested the bids is made aware of the consortium as required by the criminal bid-rigging provision.
- Buy-Side Agreements Not Completely Decriminalized. Buy-side agreements may still contravene the Act’s criminal provisions if their purpose is to fix or control price or production, or allocate markets for the supply of a product (downstream).
- Expanded Interpretation of Section 90.1. The Draft Guidelines indicate that an agreement between parties may be subject to s. 90.1 review if the parties are competitors in respect to any product, even if that particular product is not the subject of any collaboration.
- Ancillary Restraints Defence is More Limited. The Draft Guidelines propose amendments to make it clear that statements or assertions by parties, for example in a research and development (R&D) agreement, that the R&D would not have occurred absent the agreement is not, of itself, sufficient to establish the defence.
The Bureau has invited interested parties to submit comments regarding the Draft Guidelines by September 28, 2020.
