ARIEL KATZ ASSOCIATE PROFESSOR INNOVATION CHAIR, ELECTRONIC COMMERCE

June 15, 2011 Mr. Gilles McDougall Secretary General The Copyright Board of Canada 56 Sparks Street, Suite 800 Ottawa, Ontario K1A 0C9 Dear Mr. McDougall, Re: Applications to:

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(1) Extend the Time for Responding to the AUCC Application regarding Transactional License; and (2) Invite the Commissioner of Competition to Intervene in this Case In response to the Board’s decision from June 9, 2011, I wish to request an extension for responding to the AUCC application from June 8, 2011. I also wish to request the Board to solicit the opinion of the Commissioner of Competition, as an intervener or otherwise as the Board may see fit. The reasons for these requests are the following: As you will know, I have to respond to Access Copyright’s interrogations by June 17, and respond to the AUCC Application by June 16. As a practical matter, responding to both at the same time creates a serious difficulty for me. Not less important is the fact that the AUCC’s allegation suggest that many of the concerns that I raised in my objections to the Interim Tariff have indeed materialized despite the Board’s efforts to mitigate them. Naturally, I take these issues very seriously. Nevertheless, I am not completely persuaded that amending the Interim Tariff to require Access Copyright to grant transactional licenses on a per copy basis—as the AUCC requests—is necessarily the optimal remedy for these issues. In fact, I am concerned that ordering Access Copyright to grant transactional licenses might actually—under some circumstances—aggravate the problem. In order to develop an informed opinion, it would also be highly beneficial for me to read and consider Access Copyright’s response, including its proffered justifications for the alleged change in its licensing practices. I would also add that if true, the AUCC’s allegations amount not only to “bad faith”, “misconduct” and “gross abuse of the collective administration of copyrights” as AUCC counsel writes, and not only an “improper use of collective monopoly power” in some general sense.
Faculty of Law, 78 Queens Park, Toronto, ON, Canada M5S 2C5 Tel: 416-978-8892 Fax: 416-978-2648 ariel.katz@utoronto.ca www.law.utoronto.ca/faculty/katz

2 Indeed, the conduct complained of may as well constitute an “abuse of dominant position” or other type of restrictive trade practice within the meaning of the Competition Act. Moreover, to the extent that Access Copyright and its member/affiliate copyright owners or some of them have agreed or otherwise arranged that they would refrain from licensing their works independently, such conduct may amount to an offence under section 45 of the Competition Act, to which the immunity under section 70.5(3) of the Copyright Act will not apply. Alternatively, such conduct could at least be subject to an order under section 90.1 of the Competition Act. Determining whether or not the AUCC’s complaint involves conduct that is illegal or reviewable under the Competition Act requires not only a deeper and more thorough analysis than the one I can undertake given the current record and time frame. Moreover, it may require some preliminary ruling regarding the application of the Competition Act to matters before the Board, since one could reasonably predict that Access Copyright would argue for broad immunity from the provisions of the Competition Act. In light of the above, I respectfully request to extend the deadline for replying to the AUCC’s Application, and permit me to reply within two weeks after Access Copyright files its response. In addition, given the intimate relations between the conduct underlying the AUCC’s complaints and the Competition Act, I would strongly encourage the Board to request the participation of the Commissioner of Competition pursuant to s. 125 of the Competition Act. Parliament explicitly recognized in this provision that the Commissioner of Competition may provide important insights in the context of other regulatory proceedings, and signaled clear intention to integrate competition law and policy considerations into regulatory proceedings. Furthermore, in sections 70.5 and 70.6 of the Copyright Act Parliament envisaged a specific dual role for the Commissioner and the Board in overseeing collectives’ behaviour, even when there is no direct regulatory oversight of their conduct in the form of a tariff-setting hearing. In the present case, adequate response to the AUCC’s Application involves issues of fact and law that are not normally within the expertise and experience of the Copyright Board, and may require the Board to rule in a way that may have direct impact on the harmonious interpretation of two important statutes: the Copyright Act and the Competition Act. It would therefore be prudent for the Board to solicit the opinion of the Commissioner of Competition, who has the expertise and mandate not only to enforce the Competition Act but also to provide her perspectives in other regulatory proceeding, such as this one. Yours respectfully,

Ariel Katz

Faculty of Law, 78 Queens Park, Toronto, ON, Canada M5S 2C5 Tel: 416-978-8892 Fax: 416-978-2648 ariel.katz@utoronto.ca www.law.utoronto.ca/faculty/katz

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