Canada: Canadian Commissioner Of Competition Announces 2007-2008 Priorities

In a speech at the Canadian Bar Association / International Bar Association Spring Conference in Toronto, Canada on May 3, 2007, the Canadian Commissioner of Competition (the Commissioner), Sheridan Scott, described the competition enforcement and advocacy priorities of the Competition Bureau (the Bureau) for 2007-2008. While broadly consistent with those outlined by the Commissioner in recent years, the Commissioner announced some further specific steps that will be taken to advance the Bureau's objectives.

Enforcement priorities

With regard to domestic cartels and bid-rigging, the Commissioner announced a continued emphasis on utilizing the Bureau's recent increased allocation of resources to its Canadian regional offices to address these two issues. The Commissioner indicated that the Bureau's regional enforcement staff have been developing closer links with local law-enforcement agencies and working to increase public awareness of criminal conspiracy matters in the regions, resulting in an influx of conspiracy complaints and bid-rigging inquiries. By way of example, the Commissioner noted inquiries into gasoline price-fixing in Quebec and the alleged boycott of an internet-based tour operator, as well as prohibition orders to address price-fixing among Alberta autobody shops, and in the Sotheby's auction case. The Commissioner also took pains to emphasize that, while domestic cartels remain the stated priority, the Bureau is in no way signalling a softer stance on international cartel matters and that it will continue its cooperation with foreign antitrust enforcement agencies to target cartels, especially where a difference can be made for Canadians.

In respect of mass-marketing fraud, the Commissioner identified as a "myth" the view that this priority was better left to the police alone, emphasizing that marketing fraud fundamentally undermines the competitive marketplace in Canada that the Bureau is required to support and encourage. The Commissioner cited with satisfaction the Bureau's recent success at the Ontario Court of Appeal in the Benlolo case,¹ in which the Court affirmed both the appropriateness of jail sentences in certain marketing fraud cases and the need for marketing-fraud fines in such cases to be more than a cost of doing business. The Bureau has announced a steady stream of misleading advertising and marketing cases over the past year and provides on its website for the tracking of such cases.

Closely linked to the Bureau's efforts to prosecute mass-marketing fraud is its work in cleaning up the electronic marketplace. Over the past few years the Bureau has been ramping up its capacity to detect non-compliant conduct in electronic commerce, especially with a view to identifying fraudulent and misleading representations and unsubstantiated health performance claims. The Commissioner announced that the specialised scanning software the Bureau recently acquired has vastly improved its ability to detect fraudulent misrepresentations on the Internet.

On the mergers and abuse of dominance fronts, the Bureau continues to focus on clarifying the fundamental principles behind its enforcement activities, consistent with its operating principles of transparency and predictability. In furtherance of this priority, the Commissioner indicated that 2007-2008 would see the Bureau issuing draft revised Predatory Pricing Guidelines, a draft bulletin on "Corporate Compliance" and a bulletin on "Confidentiality."² These publications follow publication by the Bureau over the past year of the Technical Bulletin on "Regulated" Conduct, the Information Bulletin on Merger Remedies in Canada and the Draft - Information Bulletin on the Abuse of Dominance Provisions as applied to the Telecommunications Industry.

The Bureau's competition advocacy priorities for 2007-2008 remain as follows: integrating competition assessment into government policy development (the "competition lens"), health (especially pharmaceuticals), telecommunications and self-regulated professions.

With regard to health-care issues, the Commissioner indicated that the Bureau is continuing to study what appear to be high prices in Canada for generic drugs and will be releasing a draft report on the subject in late Spring, 2007 and a final report in Autumn, 2007.

The Commissioner also indicated that the Bureau is proceeding with detailed examinations of the regulated professions in Canada, including the legal profession, under the belief that Canadian efficiency may be inhibited by overly restrictive regulation of professional services. It plans to publish its professions study in Autumn, 2007.

With respect to telecommunications, the Commissioner noted that the recent federal Cabinet directive to accelerate market deregulation in the local telecommunications market in Canada is rapidly moving telecommunications from the advocacy side to the enforcement side of the Bureau's mandate. She identified that the Bureau has been given additional resources to deal with competition complaints that may arise as the industry adapts, and that the Bureau will intervene if and as required by the market conduct of competitors.

While international work is not part of the Bureau's formal priorities statement for 2007-2008, the Commissioner went on to indicate that in her view it represents the "third leg" of the Bureau's "tripod" of efforts. The Commissioner identified as important the activities of the International Competition Network (ICN), and in particular its work on unilateral conduct. She also noted the Bureau's continued active participation in a number of OECD committees looking at restrictions in the legal profession, and providing effective guidance to businesses about enforcement standards and unilateral conduct, dynamic efficiencies in merger analysis and post-merger review.

1. R. v. Benlolo (2006), 81 O.R. (3d) 440.
2. Currently the Bureau has Predatory Pricing Guidelines dating from 1992, a bulletin titled Corporate Compliance Programs dating from 1997 and a bulletin titled Communication of Confidential Information Under the Competition Act dating from 1995.

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