The battle over the Rogers – Shaw merger has continued to escalate in recent days with TekSavvy filing an application with the CRTC on the wholesale access implications of the deal, a campaign to urge ISED Minister François-Philippe Champagne to reject the transaction, and a forthcoming Industry committee hearing on the situation. The merger heads for what may be its final legal showdown this week as the Federal Court of Appeal conducts its hearing on the Competition Bureau’s appeal of a recent decision from the Competition Tribunal that rejected its opposition to the proposed merger.
Jennifer Quaid is an Associate Professor and Vice-Dean Research in the Civil Law Section at the University of Ottawa, Faculty of Law. She is an expert on competition law and has been vocal throughout the Rogers-Shaw merger drama. She joins me on the Law Bytes podcast to unpack the legal arguments in the case, provides her prognostication on a potential outcome at the Court of Appeal, and offers insights into potential future competition law reforms in Canada in light of a national consultation on the issue.
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The Competition Tribunal has granted leave to Stargrove Entertainment, the Canadian music label that has published public domain recordings from the artists such as the Beatles, to pursue a Competition Tribunal complaint against some of the giants of the music industry. The complaint targets the Canadian Music Reproduction Rights Agency (CMRRA), Universal Music, Sony Music, and several music publishers. I wrote earlier about Stargrove’s complaint and noted the backroom lobbying campaign that succeeded in obtaining a copyright term extension in Canada for sound recordings.
Despite strong opposition from the music industry, the Tribunal granted leave to pursue a complaint of price maintenance in violation of the Competition Act. The Tribunal concluded:
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Earlier this year, I wrote about the secret campaign by major record labels and publishers to stop the release of public domain recordings, most notably Beatles records that outsold the offerings from major label records at retail giant Wal-Mart. The campaign included extensive lobbying for an extension in the term of copyright for sound recordings. The government included the extension in the April 2015 budget, with Prime Minister Stephen Harper writing personally to the Graham Henderson of Music Canada to inform him of the change. The reforms were a gift to the recording industry, with the result that Canadian consumers now face higher prices and less choice.
Stargrove Entertainment, the company behind the public domain Beatles releases, has found that the industry is still blocking attempts to bring works in the public domain to market. As a result, this week it filed a complaint with the Canadian Competition Tribunal, claiming that major record labels such as Universal Music and Sony Music, music publishers, and CMRRA are violating Canadian competition law by refusing to deal, engaging in illegal price maintenance, and exclusive dealing. The company is seeking an order requiring the companies to provide a mechanical licence so that it can continue to produce and sell public domain records. The complaint (CT-2015-009) should be posted on the Tribunal site shortly.
The complaint tells a fascinating behind-the-scenes tale, with the recording industry doing everything in its powers – including posting false reviews and pressuring distributors – to stop the sale of competing records. The complaint notably identifies Universal Music Canada as a key player in the alleged activities, including former President Randy Lennox, who last week jumped to Bell Media.
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