PUBLIC CT-2018-005 THE COMPETITION TRIBUNAL
IN THE MATTER OF the Competition Act, R.S.C. 1985, c. C-34, as amended; AND IN THE MATTER OF an application by the Commissioner of Competition for orders pursuant to section 74.1 of the Competition Act regarding conduct reviewable pursuant to paragraph 74.01(1)(a) and section 74.05 of the Competition Act;
BETWEEN: THE COMMISSIONER OF COMPETITION Applicant – and – LIVE NATION ENTERTAINMENT, INC., LIVE NATION WORLDWIDE, INC., TICKETMASTER CANADA HOLDINGS ULC, TICKETMASTER CANADA LP, TICKETMASTER L.L.C., THE V.I.P. TOUR COMPANY, TICKETSNOW.COM, INC., and TNOW ENTERTAINMENT GROUP, INC.
Respondents COMMISSIONER’S MEMORANDUM OF FACT AND LAW (Respondents’ Motion on Commissioner’s Refusals)
ATTORNEY GENERAL OF CANADA Department of Justice Canada Competition Bureau Legal Services Place du Portage, Phase I 50 Victoria Street, 22 nd Floor Gatineau QC K1A 0C9 Fax: (819) 953-9267
François Joyal Tel: (514) 283-5880 francois.joyal@justice.gc.ca
Paul Klippenstein Tel: (819) 953-3888 paul.klippenstein@canada.ca
Ryan Caron Tel: (819) 953-3889 ryan.caron@canada.ca
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THE COMPETITION TRIBUNAL
IN THE MATTER OF the Competition Act, R.S.C. 1985, c. C-34, as amended;
AND IN THE MATTER OF an application by the Commissioner of Competition for orders pursuant to section 74.1 of the Competition Act regarding conduct reviewable pursuant to paragraph 74.01(1)(a) and section 74.05 of the Competition Act;
BETWEEN: THE COMMISSIONER OF COMPETITION Applicant
– and – LIVE NATION ENTERTAINMENT, INC., LIVE NATION WORLDWIDE, INC., TICKETMASTER CANADA HOLDINGS ULC, TICKETMASTER CANADA LP, TICKETMASTER L.L.C., THE V.I.P. TOUR COMPANY, TICKETSNOW.COM, INC., and TNOW ENTERTAINMENT GROUP, INC.
Respondents
COMMISSIONER’S MEMORANDUM OF FACT AND LAW (Respondents’ Motion on Commissioner’s Refusals)
CT-2018-005
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OVERVIEW 1. In the underlying matter, the Commissioner of Competition (“Commissioner”) alleges that the Respondents have engaged in conduct reviewable pursuant to ss. 74.01(1)(a) and 74.05 of the Competition Act 1 (“Act”). More particularly, they have engaged in deceptive marketing practices by promoting the sale of tickets to the public at prices that are not in fact attainable and then supplying tickets at prices above the advertised price, on their online ticketing platforms.
2. The Commissioner has answered some of the questions that are the object of the Respondents’ motion. The Commissioner has properly refused to answer the remaining 18 questions.
3. The remaining refused questions are improper in that: 1. The remaining refused questions grouped as “Issue 1 – Historic Conduct” constitute a fishing expedition into the Commissioner’s enforcement activities Respondents may have relied upon;
2. The remaining refused questions grouped as “Issue 2 – Individual Respondent Allegations” improperly seek to have the Commissioner’s representative categorize the facts which have been identified as belonging to particular elements of the legal test; that is for the trier of fact to decide; and
3. The remaining refused question under “Issue 3 – Industry Practices” is improperly vague and far-reaching.
4. The Respondents’ motion should be dismissed, with costs in the cause. 1 Competition Act, RSC 1985, c C-34 [Act].
beyond any representations the
I. FACTS 5. On 25 January 2018, the Commissioner filed a Notice of Application (“Application”) for orders pursuant to section 74.1 of the Act, in respect of conduct reviewable pursuant to paragraph 74.01(1)(a) and section 74.05 of the Act. 2 6. The Commissioner alleges that the Respondents have engaged in deceptive marketing practices by promoting the sale of tickets to the public at prices that are not in fact attainable (“Price Representations”) and then supplying tickets at prices above the advertised price. The Price Representations are made to and target the public in Canada on "ticketmaster.ca", "ticketweb.ca", and "ticketsnow.com" and their mobile applications (“Ticketing Platforms”). 3 7. On 12 March 2018, the Respondents filed their Response, and on 26 March 2018, the Commissioner filed his Reply. 4 8. The Respondents examined the Commissioner’s representative on 31 January 2019 and 1 February 2019. On 1 March 2019, the Commissioner provided responses to approximately 57 undertakings 5 and 5 questions that had previously been refused. 6 9. On 28 March 2019, the Commissioner provided responses to additional questions that had previously been refused. 7 10. The remaining refused questions are set out in Schedule A. 2 Notice of Application dated 25 January 2018, Motion Record of the Respondents, at tab 2 [Notice of Application]. 3 Ibid, at para 3. 4 Response, dated 12 March 2018, Motion Record of the Respondents, at tab 3 [Response]; and Reply, dated 26 March 2018, Motion Record of the Respondents, at tab 4 [Reply]. 5 Commissioner’s Responses to Undertakings, Motion Record of the Respondents at tab 5E [Response to Undertakings]. 6 Commissioner’s Responses to Certain Refused Questions, Motion Record of the Respondents at tab 5F [Response to Refusals]. 7 Affidavit of Melanie Dubeau, affirmed 28 March 2019, Exhibit “C”, Motion Record of the Commissioner, at tab 2, [Dubeau Affidavit].
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II. THE POINT IN ISSUE 11. The issue on this motion is whether the remaining refused questions are proper and ought to be answered.
III. SUBMISSIONS A. APPLICABLE LEGAL FRAMEWORK 12. A person being examined for discovery must answer, to the best of the person’s knowledge, information and belief, any question that is relevant to the unadmitted facts in the pleadings. 8 13. The scope of permissible discovery will ultimately depend on the “factual and procedural context of the cases, informed by an appreciation of the applicable legal principles”. Determining whether a particular question is permissible is a “fact-based inquiry”. 9 14. In determining the propriety of a particular question posed at an examination for discovery, the test is whether it is reasonable to conclude that the answer to the question might fairly lead to a train of inquiry that might either advance the party’s case or damage that of its opponent. Such questions may seek to elicit admissions as to relevant facts, information about the existence of relevant documents, or seek production of relevant documents that have not been produced. 10 15. Questions may be objected to where the answer is privileged; the question is not relevant; the question is unreasonable or unnecessary; or it would be unduly onerous to require the person to make the inquiries referred to in Rule 241 of the Federal Courts Rules. 11 8 Federal Courts Rules, SOR/98-106, r 240 [Federal Courts Rules]. 9 Canada v Lehigh Cement Limited, 2011 FCA 120, at para 24 [Lehigh Cement]; and Commissioner of Competition v Vancouver Airport Authority, 2017 Comp Trib 16, at para 46. 10 Lehigh Cement, supra note 9, at para 34. 11 Federal Courts Rules, supra note 8, r 241 and 242.
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16. Similarly, questions that ask a witness to testify on questions of law or to provide argument as to what is relevant in order to prove a given plea. 12 17. Even where relevance is established, the Court retains discretion to disallow a question. The exercise of this discretion requires a weighing of the potential value of the answer against the risk of abuse. The Court might disallow a question where responding to it would place undue hardship on the answering party, where there are other means of obtaining the information sought, or where the question forms part of a fishing expedition of vague and far-reaching scope. 13 B. THE RESPONDENTS SEEK PRODUCTION OF IRRELEVANT INFORMATION
18. The reviewable conduct that the Competition Tribunal (“Tribunal”) is to determine in this proceeding arises under paragraph 74.01(1)(a) and subsection 74.05(1) of the Act. The information the Respondents seek is irrelevant to the issues the Tribunal will have to determine pursuant to these provisions.
i) LEGISLATIVE PROVISIONS AT ISSUE 19. The central issues to be adjudicated on the merits by the Tribunal are whether the Respondents have made, and continue to make, representations to the public that are false or misleading in a material respect about the price consumers in Canada must pay to buy tickets, and whether the Respondents supply tickets at prices higher than the advertised prices.
20. Paragraph 74.01(1)(a) of the Act states: A person engages in reviewable conduct who, for the purpose of promoting, directly or indirectly, the supply or use of a product or for the purpose of promoting, directly or indirectly, any business interest, by any means whatever,
12 Apotex v Pharmascience 2004 FC 1998, at para 19. 13 Lehigh Cement, supra note 9, at para 35.
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(a) makes a representation to the public that is false or misleading in a material respect;
21. The term “make” in paragraph 74.01(1)(a) of the Act includes permitting a representation to be made. 14 22. In determining whether a representation is false or misleading in a material respect, subsection 74.03(5) of the Act requires the trier of fact to consider the “general impression” conveyed by a representation as well as its literal meaning. 15 23. Subsection 74.05(1) of the Act states: A person engages in reviewable conduct who advertises a product for sale or rent in a market and, during the period and in the market to which the advertisement relates, supplies the product at a price that is higher than the price advertised.
24. Subsection 74.05(3) of the Act states: For the purpose of this section, the market to which an advertisement relates is the market that the advertisement could reasonably be expected to reach, unless the advertisement defines the market more narrowly by reference to a geographical area, store, department of a store, sale by catalogue or otherwise.
ii) [ISSUE 1 – HISTORIC CONDUCT] THE RESPONDENTS SEEK TO USE THEIR ESTOPPEL PLEA TO JUSTIFY A FISHING INVESTIGATION INTO THE COMMISSIONER’S ENFORCEMENT ACTIVITIES
25. The Respondents improperly seek to use their estoppel plea to justify a fishing expedition into the Commissioner’s enforcement activities. These questions are improper and not relevant to the Respondents’ defense. 16 Moreover, requiring answers to such questions is unreasonable, unnecessary and unduly onerous in comparison to the likely value of the answer.
14 Act, supra note 1, s 52(1.2). 15 Act, supra note 1, s 74.05. 16 The Director of Investigation and Research v Southam (1991), 38 CPR (3d) 68, pp 10-11.
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26. In 2009 and early 2010, the Commissioner examined whether Ticketmaster was making materially false or misleading representations to the public on its website by redirecting consumers from the primary market to the secondary marketplace without their knowledge. The Bureau also became aware of confusion regarding a cash back incentive offered to Ticketmaster customers. 17 The examination did not involve the issue of drip pricing. 18 27. The Respondents plead that the Commissioner is estopped from bringing this application concerning the Price Representations because the Commissioner did not raise this issue at the time of his 2009-2010 examination into consumers being redirected from the primary to the secondary ticket market. 19 28. The Commissioner pleads that: 1. The Respondents have not identified any positive action on the part of the Commissioner that could properly give rise to an estoppel;
2. The application of estoppel would interfere with the positive obligations set out in the Act; and
3. The Respondents engaged in the reviewable conduct based on their own independent business assessment and the benefits flowing from that conduct rather than out of reliance on any inaction by the Commissioner. 20 29. The Commissioner also pleads that the Respondents did not seek any advisory opinion as was open to them under section 124.1 of the Act.
17 Letter dated January 8, 2010, Motion Record of the Respondents, at tab 5J, pp 534-5. 18 Response to Undertakings, supra note 5, p 502: undertaking 26 in response to question 556. 19 Response, supra note 4, at paras 82-86. 20 Reply, supra note 5, at paras 31-33.
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30. In their motion materials, while the Respondents plead that questions regarding the conduct of the Commissioner’s investigations are relevant to their estoppel defence and remedy, they have not referred to any applicable legal principles to ground their position. The Respondents have not established how the remaining refused questions are relevant to the elements of their estoppel defence.
31. The essence of estoppel is representation by words or conduct which induces detrimental reliance. 21 The conduct or promise on which the party alleging estoppel relies must be unequivocal. 22 32. While the Commissioner pleads that the doctrine of estoppel is unavailable to the Respondents, 23 the Commissioner has nevertheless answered the Respondents’ proper questions. The Respondents’ proper questions are those that relate to the words or conduct that the Respondents could allegedly have relied on, such as correspondence to or meetings with certain Respondents and their representatives. 24 33. The remaining refused questions on this topic do not relate to any alleged representations made by the Commissioner, nor to whether the Respondents relied to their detriment on any such representations. In particular, the following questions are not relevant to the issues before the Tribunal:
21 Scotsburn Co-Op. Services v. W.T. Goodwin Ltd., [1985] 1 SCR 54, at para 26. 22 Canada (Attorney General) v. Lamothe, 2008 FC 411, at para 72. 23 Notice of Application, supra note 2, at paras 31-33. 24 The issue has been covered, for example, in the Commissioner’s Responses to Undertakings reproduced in the Motion Record of the Respondents, at tab 5E, p 502 (response to undertakings 24, 25, and 26), 503 (response to undertakings 27 and 31) and p 504 (response to undertaking 32), as well as in response to question 500 which was initially refused at the examination, which appears in the Motion Record of the Respondents, at tab 5F, p 522.
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1. Whether or not the Commissioner decides to investigate or take any enforcement action in response to a particular complaint received by the Bureau; 25 2. The timing of the Commissioner’s decision to open an investigative file or to take any particular enforcement action; 26 3. Whether any particular investigative steps were taken in an investigative file; 27 4. The point in time at which the Commissioner reaches a particular conclusion in an investigative file; 28 5. What Bureau officials meant by certain phrases in internal emails exchanged in the conduct of an examination ten years ago. 29 34. With respect to Question 679, the Commissioner has answered the similar Questions 647-650, but maintains that Question 679 is impermissibly vague and far-reaching.
iii) [ISSUE 2 – INDIVIDUAL RESPONDENT ALLEGATIONS] THE COMMISSIONER HAS PROVIDED THE KNOWN FACTS WITH RESPECT TO INDIVIDUAL RESPONDENTS AND THE REMAINING QUESTIONS IMPROPERLY CALL FOR LEGAL INTERPRETATION
35. The Commissioner has identified Respondents’ involvement in the representations at issue. The Respondents cannot require the Commissioner’s representative to offer a legal
25 Schedule A, Question 1199. 26 Schedule A, Questions 678; 685. 27 Schedule A, Questions 461; 462. 28 Schedule A, Question 677. 29 Schedule A, Question 463. See Exhibit 114 to the Examination of Lina Nikolova, Dubeau Affidavit, supra note 7, Exhibit “B”, at tab 4.
facts related to individual
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interpretation as to whether those facts apply to a particular element of the legal test. That is for the trier of fact to decide.
36. The Commissioner pleads that the Respondents’ parent company, Live Nation Entertainment, Inc. describes itself and the businesses it controls as the world’s leading live entertainment and ticketing sales and marketing company. 30 The Commissioner pleads that the Respondents work together and/or individually to make or permit the Price Representations and supply tickets to consumers in Canada. 31 The Commissioner further pleads facts specific to each Respondent’s involvement in the Price Representations. 32 37. The Respondents plead that some Respondents but not others control the websites in issue, 33 but do not otherwise plead any facts in support of their position.
38. At examination for discovery, the Commissioner’s representative can properly be asked of the facts. Indeed, the Commissioner’s representative provided facts that relate to the involvement of individual Respondents with respect to the representations in dispute. 34 39. However, it is not permissible to ask the Commissioner’s representative to select facts upon which she relies in order to support a given allegation. 35 The Commissioner’s representative does not have to provide a legal interpretation as to which facts relate to the “making” of as opposed to the
30 Notice of Application, supra note 2, at para 2. 31 Ibid, at para 9. 32 Ibid, at paras 10-17. 33 Response, supra note 4, at paras 12-13. The Respondents advised at the examination for discovery that in fact there was an error in their pleadings.
Motion Record of the Respondents, at tab 5B: Live Nation Entertainment, Inc, pp 113-113 (Transcript, pp 31-51); Live Nation Worldwide, Inc, pp 166-169 (Transcript, pp 84-87); TM Canada Holdings ULC, pp 134-149 (Transcript, pp 52-67); VIP Tour Company Inc, pp 149-160 (Transcript, pp 67-78); and Ticketsnow.com Inc, pp 160-164 (Transcript, pp 78-82). 35 Apotex v Pharmascience 2004 FC 1998, at para 19.
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“permitting” of the representations to be made. This would require the Commissioner’s representative to characterize those facts as relating to a particular component of the legal test as sought by the Respondents.
40. Further, certain of the Questions grouped under Issue 2 were asked and answered at the examination for discovery. In response to Questions 276-277: the Commissioner’s representative answered several times that she “was not aware of any facts” associating VIP Tour Company with ticketmaster.ca. 36 The Commissioner also responded to an undertaking to the same effect. 37 Those Questions have been answered. iv) [ISSUE 3 – INDUSTRY PRACTICES] THE REMAINING QUESTION IS IMPROPERLY VAGUE AND FAR-REACHING
41. Question 1277 effectively asks the Commissioner to disclose the sum total of any information he may have about the market for online sales or resales of tickets in Canada. This question on its face is vague and far-reaching in scope and was properly refused.
42. The remaining Questions grouped under Issue 3, as well as the one Question under Issue 4, have been answered. 38 36 See for example, the Motion Record of the Respondents, at tab 5B: pp 152-3 (Q 265 and Q266), p 156 (Q 278 and 280), at pp 157-158 (Q 285) and the Motion Record of the Respondents, tab 5E, p 498 (Undertaking 10, Q 290). 37 Response to Undertakings, supra note 5, p 498: Undertaking 10, Question 290. 38 Dubeau Affidavit, supra note 7, Exhibit “C”, at tab 5.
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IV. THE ORDER SOUGHT 43. In light of the foregoing, the Respondents’ motion should be dismissed, with costs in the cause.
RESPECTFULLY SUBMITTED THIS MARCH 28, 2019.
"Original Signed by Counsel for the Commissioner of Competition"
ATTORNEY GENERAL OF CANADA Department of Justice Canada Competition Bureau Legal Services Place du Portage, Phase 1 50 Victoria Street, 22nd Floor Gatineau QC K1A OC9 Fax: (819) 953-9267
François Joyal Tel: (514) 283-5880 francois.joyal@justice.gc.ca
Paul Klippenstein Tel: (819) 934-2672 paul.klippenstein@canada.ca
Ryan Caron Tel: (819) 953-3889 ryan.caron@canada.ca
Counsel to the Commissioner
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V. LIST OF AUTHORITIES Legislation 1. Competition Act, RSC 1985, c C-34 2. Federal Courts Rules, SOR/98-106, rules 240 - 242
Jurisprudence 3. Canada v Lehigh Cement Limited, 2011 FCA 120. 4. Commissioner of Competition v Vancouver Airport Authority, 2017 Comp Trib 16. 5. Apotex Inc v. Pharmascience Inc, 2004 FC 1198. 6. The Director of Investigation and Research v. Southam (1991), 38 CPR (3d) 68. 7. Scotsbur Co-Op. Services v. W.T. Goodwin LTD., [1985] 1 SCT 54. 8. Canada (Attorney General) v. Lamothe, 2008 FC 411.
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PUBLIC CT-2018-005 THE COMPETITION TRIBUNAL
IN THE MATTER OF the Competition Act, R.S.C. 1985, c. C-34, as amended;
AND IN THE MATTER OF an application by the Commissioner of Competition for orders pursuant to section 74.1 of the Competition Act regarding conduct reviewable pursuant to paragraph 74.01(1)(a) and section 74.05 of the Competition Act;
BETWEEN: LIVE NATION ENTERTAINMENT, INC., LIVE NATION WORLDWIDE, INC., TICKETMASTER CANADA HOLDINGS ULC, TICKETMASTER CANADA LP, TICKETMASTER L.L.C., THE V.I.P. TOUR COMPANY, TICKETSNOW.COM, INC., and
Respondents COMMISSIONER’S MEMORANDUM OF FACT AND LAW (Respondents’ Motion on Commissioner’s Refusals)
ATTORNEY GENERAL OF CANADA Department of Justice Canada Competition Bureau Legal Services Place du Portage, Phase I 50 Victoria Street, 22 nd Floor Gatineau QC K1A 0C9 Fax: (819) 953-9267
François Joyal Tel: (514) 283-5880 francois.joyal@justice.gc.ca
Paul Klippenstein Tel: (819) 934-2672 paul.klippenstein@canada.ca
Ryan Caron Tel: (819) 953-3889 ryan.caron@canada.ca
THE COMMISSIONER OF COMPETITION Applicant – and – TNOW ENTERTAINMENT GROUP, INC.