Governments and competition agencies around the world, including those in Canada, the United States and Europe, are reviewing their competition policies to assess whether they are capable of addressing novel and complex issues arising in today's fast-paced and ever-changing digital economy. These issues arise because the digital economy, unlike traditional markets, is often charactered by, among other things, platform-based business models, multi-sided markets, network effects, economies of scale, rapid technological change and disruptive innovation.
Preceding Minister of Innovation, Science and Industry François-Philippe Champagne's announcement last week that the Canadian government would engage in a review of its competition laws, Senator Howard Wetston initiated a consultation on Canada's competition policy framework and the Competition Act (the "Act") in particular. To contextualize the consultation, Senator Wetston commissioned Professor Edward Iacobucci to prepare a discussion paper examining whether digital markets have distinctive features that would necessitate changes to Canada's competition laws. Professor Iacobucci's paper, titled "Examining the Canadian Competition Act in the Digital Era", was published on September 27, 2021. Subsequently, on October 27, 2021, Senator Weston invited interested stakeholders to participate by submitting their own responses.
In response to his consultation invitation, Senator Wetston received comments from more than 25 stakeholders, including a detailed submission from the Competition Bureau (the "Bureau"). The Bureau's submission includes 35 wide-ranging recommendations that, if implemented, would fundamentally reshape competition enforcement in Canada. Significantly, while Senator Weston's consultation is focussed on the digital economy, the Bureau's recommendations are, for the most part, more general in nature - applying equally to the digital economy and traditional markets. According to the Bureau, its recommendations are intended to "[modernize] the Act so that Canadian consumers and businesses can prosper in a competitive and innovative marketplace" and provide the Commissioner of Competition with "the right tools to ensure that individuals and companies comply with the Act across a wide range of economic activity".
Given the growing calls for reform to Canada's competition policy, it is imperative that businesses carefully consider how the Bureau's recommendations may affect their future operations in Canada. Failure to comply with the Act could result in criminal and civil penalties, including lengthy Bureau investigations and costly proceedings before the Competition Tribunal or the courts, as well as fines, damaged reputation and class action exposure.
To help businesses better understand the impact of the Bureau's recommendations, we will, over the course of the next five weeks, be publishing a series of blog posts discussing the recommendations on a topic-by-topic basis. These blog posts will focus on the following five topics: (1) merger review; (2) abuse of dominance; (3) competitor collaborations ; (4) consumer protection / deceptive marketing; and (5) litigation.
In the meantime, if you have questions concerning the Act or the recommendations in the Bureau's submission - whether related to the digital economy or otherwise - you can reach out to any member of Fasken's Competition, Marketing & Foreign Investment group. Our group has significant experience advising clients on all aspects of Canadian competition law.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
