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Competition Bureau Update

Published in the November 2006 issue of Transportation Notes - View Article

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On September 28, 2006, the Canadian Commissioner of Competition delivered a speech outlining the Competition Bureau’s priorities for the remainder of the year.

The Commissioner reinforced the Bureau’s top enforcement priority of fighting cartels. Accordingly, the Bureau has increased the Criminal Branch’s budget by about 50% over the last three years and strengthened the capacities of the regional offices. The Commissioner referenced last January’s case against certain paper merchants in Ontario and Quebec which resulted in the parties agreeing to pay fines of $37.5 million and to remove or demote key personnel. The Commissioner also cited the recent criminal charges of obstruction relating to the destruction of documents against an employee of a ventilation company in Laval, as an example of the Bureau’s zero tolerance policy towards obstruction in its cartel investigation. Further, the Commissioner cited the Bureau’s active search teams, including the recent obtaining of search warrants in the investigation of certain tour operators. The Bureau is currently in the process of updating its Immunity Program.

A second enforcement priority is combating mass marketing fraud, including the targeting of online activities. To that end, the Bureau will consider better ways to enforce the Competition Act (“the Act”) in the electronic marketplace. A final enforcement priority includes the area of abuse of dominance. The Bureau intends to define more clearly the boundaries the abuse of dominance provision in the Act.

In addition to enforcement, the Commissioner highlighted the Bureau’s focus on advocacy, namely the Bureau’s role to advocate the benefits of competition in markets throughout Canada. The Commissioner singled out the pharmaceutical industry and the Bureau’s review of higher generic prices in Canada in relation to comparator countries. The telecommunications sector and the self-regulated professions sector were also singled out as areas for advocacy of competition. The Commissioner specifically stated that it will review legislation with a “view to limiting government intervention to the least intrusive means”. Such legislation forms the basis for the “regulated conduct defence” to charges of anti-competitive behaviour, which basically provides a form of immunity to persons in conduct that is directed or authorized by other validly enacted legislation.

Section 96 of the Act stipulates that when the Bureau is considering the anti-competitive effects of a merger or proposed merger, it must also consider the possibility of efficiency gains. The Bureau has the issue of the appropriate analysis of efficiencies under review and it is anticipated that it will release further guidance documentation in the reasonably near future. At this point, the Commissioner has stated that the Bureau does not anticipate seeking amendments to the legislation but will attempt to clarify its interpretation of its mandate in the view of existing statutory language and case law.

The Bureau is also conducting an internal assessment of performance management, which includes reviewing past remedies, in order to keep itself in line with foreign jurisdictions such as the European Commission and the Federal Trade Commission.