Yesterday, the Minister of Industry announced that the Canadian
Government had introduced Bill C-49 (Price Transparency
Act) which would grant the Commissioner of Competition (the
"Commissioner") enhanced powers to investigate
unjustified cross-border price discrimination. This legislation is
part of the Harper government's "consumer first"
agenda, which included a commitment to address the Canada/US price
differential, in particular where it flows from a company's use
of country-specific pricing strategies (i.e., where a company
charges higher prices in Canada than in the US and the higher
Canadian prices are not associated with the costs of doing business
More Powers to the Commissioner?
The Price Transparency Act, if passed, would enhance
the Commissioner's formal investigative powers (e.g., the
ability seek court orders to compel the production of confidential
evidence relevant to the differential pricing between Canada and
the US). The legislation would also allow the Commissioner to
compel witnesses for examination, the production of records and
written returns of information (which could include internal
strategic documents and e-mails). Additionally, the expanded
investigative powers would apply to Canadians and non-Canadian
affiliates of the company being investigated by the Commissioner.
While the Commissioner currently has the ability to compel
information from the foreign affiliates of Canadian companies
(including foreign parent companies), the attempt to do so has
raised jurisdictional issues and it is unclear whether the proposed
language addresses this issue.
While the Price Transparency Act provides the
Commissioner enhanced investigative powers, it does not provide for
any enforcement mechanisms. The proposed bill simply requires the
Commissioner to issue a public report on the findings of his
investigation – he does not have the ability to issue any
administrative monetary penalties ("AMPs"), seek a court
order requiring a company to cease price discrimination practices
or to otherwise compel a business engaged in unjustified geographic
price discrimination to cease the practice.
The Price Transparency Act clearly signals that price
differences between Canada and the US is a priority issue for the
Harper government and a key piece in its "consumer first"
We anticipate that, if the bill is passed in its current form,
the Commissioner will look to conduct an investigation into sectors
where there appears to be a significant difference in Canada/US
pricing that does not appear to be justified - meaning the higher
Canadian price is not related to any increased costs of doing
business in Canada. The results of this initial price-gap
investigation will likely determine whether the Canadian Government
believes it is appropriate to add some remedy provisions to the
Competition Act or take other steps to address a
Canada/US price gap that is found by the Commissioner to be
While it is too early to tell what impact the proposed bill will
have (assuming it is passed), companies who sell into both Canada
and the US and who employ a country pricing strategy (in particular
in sectors where there is a large differential between Canadian and
US pricing) should consider how best to develop and document their
Canadian pricing strategy. While there are no proposed
enforcement mechanisms, the results of any price-gap
investigation will be made public and that companies found to have
engaged in geographic price discrimination will face significant
reputational harm and possible consumer backlash.
The Commissioner of Competition addressed innovation, enforcement and policy initiatives at the Competition Bureau in his keynote speech, "Strengthening Competition: Innovation, Collaboration and Transparency."
Used car listing website operator CarGurus Inc.'s attempt to force rival Trader Corporation to supply it with vehicle listing data has encountered a dead end as the Competition Tribunal denied it leave to commence a private application under several provisions of the Competition Act.
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