Competition Curiousities in Canada

I'm not an big hockey fan. Much more of an opera buff, frankly. But I'd love to see another NHL team in southern Ontario. If the Leafs can't bring the Stanley Cup back to Toronto, where it belongs (at least every forty years or so), then maybe another team can bring it at least close to Toronto - e.g. Hamilton.

But it's kinda odd that Minister of Finance, Jim Flaherty, who has nothing to do with the relevant operations of the Competition Bureau, is saying that there could be a role for the federal Competition Bureau involved in the NHL Coyote debate. This could be particularly interesting given the following provisions relating to professional sport in the Competition Act:

Conspiracy relating to professional sport

48. (1) Every one who conspires, combines, agrees or arranges with another person

(a) to limit unreasonably the opportunities for any other person to participate, as a player or competitor, in professional sport or to impose unreasonable terms or conditions on those persons who so participate, or

(b) to limit unreasonably the opportunity for any other person to negotiate with and, if agreement is reached, to play for the team or club of his choice in a professional league

is guilty of an indictable offence and liable on conviction to a fine in the discretion of the court or to imprisonment for a term not exceeding five years or to both.

Matters to be considered

(2) In determining whether or not an agreement or arrangement contravenes subsection (1), the court before which the contravention is alleged shall have regard to

(a) whether the sport in relation to which the contravention is alleged is organized on an international basis and, if so, whether any limitations, terms or conditions alleged should, for that reason, be accepted in Canada; and

(b) the desirability of maintaining a reasonable balance among the teams or clubs participating in the same league.

Application

(3) This section applies, and section 45 does not apply, to agreements and arrangements and to provisions of agreements and arrangements between or among teams and clubs engaged in professional sport as members of the same league and between or among directors, officers or employees of those teams and clubs where the agreements, arrangements and provisions relate exclusively to matters described in subsection (1) or to the granting and operation of franchises in the league, and section 45 applies and this section does not apply to all other agreements, arrangements and provisions thereof between or among those teams, clubs and persons.

1974-75-76, c. 76, s. 15.

(emphasis added)

S. 45, of course, is the general "conspiracy" provision of the Competition Act.

The Minister said:

“We have a competition bureau and we have a competition tribunal in this country and if someone was of the view that the competition laws of Canada were being violated those would be the avenues to follow,'' he told reporters after a speech in Hamilton.

Mind you, he did say this in Hamilton, which may explain at least something.

But, meanwhile, where has the Competition Bureau been while Bell Canada has swallowed up Virgin's cell phone operation in Canada? Or on Ticketmaster, where Industry Minister Tony Clement had to place a wake up call to the Bureau?

HK

Google Deadlines Delayed & Enter Antitrust

The Google settlement deadlines have just been delayed by about four months for the opt out and for the final fairness hearing.

Here's part of the press release:

NEW YORK, April 28 /PRNewswire/ -- The federal court overseeing the Google Book Search Copyright Settlement today extended the Opt-Out Deadline in the case from May 5, 2009 to September 4, 2009 (the "Extended Opt-Out Deadline"). The Extended Opt-Out Deadline is the new date by which class members must decide whether to remain in the Settlement Class and receive the benefits of the Settlement, object to the Settlement, or opt out of the Settlement.

The change in the Opt-Out Deadline has caused the Final Fairness Hearing date to be rescheduled, from June 11, 2009 to October 7, 2009. This is the new date of the hearing for the court to consider whether to grant final approval of the settlement. All other deadlines and key dates in the case remain the same, including May 5, 2009 as the date on or before which a book must have been scanned in order to be entitled to a Cash Payment.

PS:

The antitrust folks at the the US Department of Justice ("DOJ") have entered the fray, announcing, today, to nobody's great surprise, that they have begun an inquiry into the antitrust implications of Google’s settlement. According to the NY Times, there was a turf war (yet again) between DOJ and the Federal Trade Commission as to who would handle this. The DOJ prevailed - to nobody's surprise.

In Canada, we rarely have such competitiveness in antitrust matters between agencies. It could arise between the Competition Bureau and the CRTC - but rarely if ever has - because neither is very interested in antitrust enforcement in the telecom or broadcasting industries. Nor has the Competition Bureau ever exercised its mandate to become involved in Copyright Board matters. The Competition Bureau in Canada has basically taken a pass in recent years on anything involving intellectual property.

HK

More on Ticketmaster

The issues around Ticketmaster may be a bit more complicated that the press has been reporting lately.

The Wall Street Journal is reporting today, March 11, 2009 that:

Ticket reselling -- also known as scalping -- is an estimated $3 billion-a-year business in which professional brokers buy seats with the hope of flipping them to the public at a hefty markup.

In the case of the Neil Diamond concerts, however, the source of the higher-priced tickets was the singer, working with Ticketmaster Entertainment Inc., which owns TicketExchange, and concert promoter AEG Live. Ticketmaster's former and current chief executives, one of whom is Mr. Diamond's personal manager, have acknowledged the arrangement, as has a person familiar with AEG Live, which is owned by Denver-based Anschutz Corp.

And it seems that Cohen's current World Tour is being promoted by the above mentioned AEG Live.

There's no suggestion that Cohen has a comparable arrangment to that of Neil Diamond referred to above. But the WSJ story provides addtional insight into how the secondary or resale market works - and doesn't work. This is a very interesting WSJ story and really worth reading.

Let's hope that Competition Bureau does a good job on this one. As I mentioned earlier, they initially didn't see any issue until Minister Tony Clement stepped in and told them to investigate.

HK

Amazon Caves on Kindle

Without a shot being fired, other than some over the bow over the top op-ed rhetoric by the Authors Guild possibly based upon a fanciful and far-fetched "derivative works" theory, Amazon has caved in to the Guild on its useful new Kindle technology to "read aloud" an electronic version of a book using computer synthesized speech.

Larry Lessig is scathing and makes a comparison to the Google books settlement. One of the problems with that that comparison is that that Amazon has settled here without even seeing a claim filed.

Perhaps the reason can be found in the AP story thhat notes that Amazon admits that it, too, has an interest in audio books:

Amazon said in a statement that it, too, has a stake in the success of the audiobook market, and pointed to its Brilliance Audio and Audible subsidiaries, which publish and sell professionally recorded readings.

"Nevertheless, we strongly believe many rights holders will be more comfortable with the text-to-speech feature if they are in the driver's seat," the company said.

Once again, questions of cross ownership, vertical integration, voluntary stifling of innovation and almost forgotten anti-trust basic principles and near comatose antitrust enforcement come to mind.

This is tough luck for the blind, for all consumers and for innovative technology. Amazon owes a better explanation.

If there indeed is a "Kindle Swindle" underway here, it's the public interest that appears to be the most obvious victim at this point.

HK

McCullagh on MacBride

Declan McCullagh has a story on President Obama's appointment of a senior BSA enforcer to a senior position at the Deaprtment of Justice:

For his vice president, Barack Obama chose Joe Biden, a senator with a long history of aiding the Recording Industry Association of America. Then Obama picked the RIAA's favorite lawyer, Tom Perrelli, for a top Justice Department post.

Now, as one of his first official actions as president, Obama has selected the Business Software Alliance's top antipiracy enforcer and general counsel, Neil MacBride, for a senior Justice Department post. Among other duties, MacBride has been responsible for the BSA's program that rewarded people for phoning in tips about suspected software piracy...

Is there a pattern emerging here? If there is, will be soon see a balanced pattern?

There is some speculation that antitrust enforcement could stiffen up - which could help to establish balance.

HK

ISPs and Content Providers Playing Footsie....

Anyone who wonders about why ISPs are degrading internet service - except for content that they they like - might want to look at the program for this conference coming up in the UK.

For example:

Day Two of the Summit will kickstart with an ISP-rights holder panel analysing consumer awareness on content online. Summit participants will then explore how an agreed self-regulatory model might work before discussing the feasibility of filtering technologies to prevent unlawful content and maintain clear and running networks, and the viability of other decryption and digital rights technologies.

Meanwhile, in the USA, where some people still believe in antitrust law and an open internet, a bill has been introduced that would treat interference or content-blocking as violations of antitrust law.

HK

EU Court Upholds Microsoft Competition Ruling

From the EU Court of First Instance ruling today upholding Commission's large fine and its finding of abuse of dominant position regarding IP:

It is only when it is accompanied by exceptional circumstances such as those hitherto envisaged in the case-law that such a refusal can be characterised as abusive and that, accordingly, it is permissible, in the public interest in maintaining effective competition on the market, to encroach upon the exclusive right of the holder of the intellectual property right by requiring him to grant licences to third parties seeking to enter or remain on that market. It must be borne in mind that it has been established above that such exceptional circumstances were present in this case. (para. 691)

Here's a good article from the IHT.

Here's the CFI decision itself and the Court's press release.

And here's the response from Microsoft's top lawyer and Senior VP, Brad Smith.

It will be interesting to see if antitrust/competition law enforcement in intellectual property ever gets back on track in Canada.

HK