Canadian Competition Bureau Rules on COD Pact

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Canadian Competition Bureau Rules on COD Pact


The Canadian Gamers Organization (CGO) got a phone call from the Canadian Competition Bureau this afternoon with the results of their investigation on the Call of Duty (COD) pact between Microsoft and Activision.  Basically XBOX users are receiving additional game content ahead of PS3 users.  This situation also applies to the Call of Duty Elite premium memberships in which Canadian consumers spend extra money for premium content.  CGO’s initial investigation found that this practise is called “tied selling” under the competition act and may have adverse effects on competitors in the market.  CGO initiated a complaint with the Canadian Competition Bureau to further investigate any negative market effects on competition in the market as a result of this tied selling.

The Competition Bureau agreed with CGO’s interpretation of the pact between Activision and Microsoft being an example of tied selling as defined in the Competition Act. As a result a team was assigned almost immediately after the complaint was received to further investigate any potential market effects on competitors.

The investigation conducted by the Competition Bureau was extremely extensive. I personally was pretty shocked to see the amount of work they did investigating this over the past week and a half. They conducted series of in depth market analyses that was explained to find that no market impact was observed as a result of the tied selling of the COD downloadable content. They also took a look at the sales of all the consoles XBox, Playstation, and Wii and found that the sales of all 3 consoles were very close in Canada, with sales of XBox and the PS3 pretty much tied. They also found no evidence that consumers where purchasing an XBox to have the COD content packs first, and there was also no evidence in the Canadian market of a swing in that direction.

Due to the definitions set out in the act on tied selling, the team assigned to this investigation brought this matter before the Competition Tribunal to discuss whether or not the Bureau would get involved. The tribunal ruled that in order for the act to apply in this case and further involvement by the Bureau there would have to be a significant impact through sales and the market, none of which the team found evidence of or was observed after an extensive investigation and market analysis.

The team at the Competition Bureau did state that CGO was justified under the act to file a complaint due to our interpretation of tied selling, and the fact these are two major players in the gaming market. They thanked CGO for bringing this to their attention. The team also stressed the point that they do not decide any actions that might be against civil laws and/or consumer protection laws.

CGO was quite impressed with the level of speed, professionalism, dedication and in depth analysis of this complaint by the Canadian Competition Bureau. We accept these findings, however we will be consulting our membership as to whether or not to pursue an investigation to ensure consumer protection laws have been respected.

Jason Koblovsky
Canadian Gamers Organization (Co-Founder)

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