Emerging Trends and Recent Developments

Executive Summary

In recent years, the financial services sector has seen the emergence of new business models and services, including in areas like Internet payments and intermediary platforms. At the same time, the financial services sector has emerged as a key area of focus for potential advocacy initiatives and enforcement by the Competition Bureau.

In recent years, the financial services sector has seen the emergence of new business models and services, including in areas like Internet payments and intermediary platforms. At the same time, the financial services sector has emerged as a key area of focus for potential advocacy initiatives and enforcement by the Competition Bureau.

How
has the financial sector been impacted?

  • Emerging technologies, such as those based on blockchain and third-party payment platforms, offer new opportunities and increased functionality but present potential risks from a competition law standpoint.
  • "Big Data" has emerged as a revolutionary concept that presents novel competition issues as a strategic business asset that may give industry players a competitive edge over their rivals.
  • Competition and other regulatory investigations may lead to civil actions, including class actions.
  • Large-scale, multi-jurisdictional investigations have resulted in global financial firms entering guilty pleas and paying unprecedented levels of fines.

What
has the financial sector been impacted? do financial institutions need to do?

Senior management needs to ensure compliance programs are adequate in light of new developments. Firms should:

  • Review and strengthen competition compliance programs.
  • Implement new or enhanced training and professional development programs to educate staff on issues around restrictive trade practices, collusion and other areas of recent focus.
  • Consider new areas of potential concerns being identified by regulators, including in payment processing, intermediary platforms and blockchain technology.
  • Foster a culture of compliance by ensuring senior management buy-in through their active participation in the compliance program and their holding highly visible roles in its promotion.
  • Conduct periodic audits to confirm the effective and proper implementation of the compliance program

Where
has there been a direct impact in Canada?

  • As early as 2011, the Competition Bureau, in conjunction with foreign agencies, investigated alleged collusive conduct in setting Yen LIBOR (the Bureau's investigation was discontinued in 2014 due to lack of evidence)
  • Canadian class actions were launched in 2015 alleging FX manipulation and gold price manipulation
  • Emerging technologies, while offering new opportunities to increase competition and promote innovation, are also attracting increased scrutiny from competition and antitrust authorities.
  • Antitrust enforcement in the digital economy continues to be a top priority for the Competition Bureau, which has shown increasing interest in the financial services sector in recent years.
  • There has been growing concern in Canada and abroad over concentration in the digital marketplace, which has led some to criticize antitrust agencies for failing to stop acquisitions of smaller tech companies dubbed by many as "killer acquisitions".
  • The Competition Bureau's Competition Promotion Branch has been particularly active in recent years advocating for various initiatives in the financial services sector, including open banking and FinTech.
  • The Competition Bureau will continue to work with foreign antitrust agencies, which is important for cross-border sectors like financial servic

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