Canada: Competition Bureau

At the Competition Bureau, we promote healthy competition through a balanced approach involving enforcement, advocacy and outreach. We work to ensure compliance with the legislation that we oversee by collaborating with Canadians, including the business and legal communities, to achieve more than we can alone – for the benefit of consumers, businesses and the economy.

This approach is part of a transition we began in 2012–2013. It involves taking opportunities to engage in strategic interventions and encourage competition in regulated sectors; expanding our outreach efforts; and taking an active advocacy role in promoting healthy competition through enhanced collaboration and communication with stakeholders.

We continue to seek out opportunities to advocate for increased competition in areas that have a direct effect on consumers. To support this objective, in 2013 we conducted a public consultation asking Canadians to identify sectors of the economy in which we could play a targeted role in advocating for increased competition. The feedback we received was excellent, including validation that we are focusing our advocacy efforts in the areas that matter most to Canadians, such as the telecommunications sector and regulatory restrictions imposed on competition with professions.

Over the past two years, we have provided submissions to the Canadian Radio-television and Telecommunications Commission (CRTC) on its proposed mandatory code of conduct governing wireless telecommunication service contracts, as well as in connection with its reviews of broadcasting services, wireless roaming rates and wholesale mobile wireless services. We have also provided submissions to the City of Toronto as part of its Taxicab Industry Review and to the Alberta College of Pharmacists as part of its consultation on a proposed prohibition that would prevent pharmacists from offering inducements on the purchase of drugs and profession services. In addition, we have undertaken a review of the restrictions on advertising among pharmacists, dentists and veterinarians. The products and services these professionals provide are critical to the welfare of Canadians. As such, we have a responsibility to promote competition in these areas to ensure that consumers benefit from lower prices, more choices and higher quality goods and services.

Most recently, we have launched a new publication entitled The Competition Advocate, which will be published periodically and will offer our views on industries that may benefit from increased competition. The first issue of The Competition Advocate focused on the taxi industry’s digital dispatch services. We are of the view that these innovative services, which allow customers to use their smartphones to locate nearby drivers, conveniently order their services and arrange payment, have the potential to offer important benefits to consumers through enhanced competition, including lower prices, greater convenience and better service quality.

All of this advocacy work is carried out alongside our ongoing vigilant competition law enforcement to protect Canadians from anti-competitive business conduct. Our investigation involving motor vehicle components has resulted in seven guilty pleas and over C$56 million in fines imposed by the courts since April 2013. We have also obtained resolutions on several cases involving providers of water heaters in Ontario which will ensure that consumers have the freedom to switch and, in turn, the freedom to choose their water heater provider. We are also continuing our efforts to bring increased retail competition in the sale of e-books, and to allow for the emergence of innovative business models in the real estate sector.

With respect to merger review, we have resolved a number of complex mergers during the past year by securing consent agreements that preserved competition in several key sectors. For instance, through significant divestitures or behavioural restrictions on merging parties, we preserved competition in the retail sale of groceries, pharmacy products and drugstore merchandise in Canada. Most recently, we concluded our review of Bell Aliant Regional Communications Inc’s proposed acquisition of Ontera. After we advised the parties of our concerns, Bell Aliant worked cooperatively and constructively with us to address those concerns and agreed to a long-term lease along a significant portion of Ontera’s network to a third-party telecommunications provider. We also recently approved the merger between Tim Hortons and Burger King. After a thorough review, it was determined that the trans­action was unlikely to result in a substantial lessening or prevention of competition. This was due to, among other things, the existence of a large number of competitors and the low barriers to entry in the fast-food industry.

Whether engaging in advocacy to promote competition or taking enforcement actions to ensure compliance with the law, we have worked to establish more developed, diversified and coordinated relationships with its partners and stakeholders, with the goal of increasing our effectiveness in delivering on our mandate. For example, we have signed memoranda of understanding or similar documents to promote collaboration and sharing of information and best practices with a number of departments and regulators in Canada over the past two years, including the CRTC, Public Works and Government Services Canada, the Canadian Intellectual Property Office, the Market Surveillance Administrator of Alberta and the Ontario Securities Commission.

Most recently, we signed a memorandum of understanding with the Competition Commission of India. This document sets out cooperation parameters, such as keeping the other party informed of significant developments, sharing law enforcement and policy experience, working together on technical cooperation activities, and coordinating and notifying enforcement activities subject to certain parameters. It also has provisions on confidentiality of information. As more business is conducted across global markets, the Bureau is increasingly collaborating with its international counterparts to ensure that markets remain innovative and competitive.

Priorities

In 2014–2015, we will continue our balanced approach to ensuring compliance with the law by pursuing the following priorities:

Apply effective and integrated enforcement and administration of the Competition Act and labelling statutes

We will leverage and integrate all available tools to ensure maximum compliance with the legislation overseen as economically as possible, adopting collaborative approaches to enforcement and continuing to consider the priorities of Canadians in focusing enforcement efforts. In particular, we will take fuller advantage of outreach, communication, advocacy, publications, voluntary compliance mechanisms, suasion and consent. Where appropriate, we will adopt collaborative enforcement approaches by working with other law enforcement agencies or government agencies on specific cases or initiatives so as to better leverage our mutual resources.

Increase competition promotion efforts to advance a culture of compliance and competition advocacy

We will increase competition promotion efforts through advocacy, stakeholder outreach and communication functions. We will complete market studies; broaden awareness of, and support for, competition principles; increase the competition-related advice we offer to other government departments; continue to meet with our stakeholders to address key matters; continue to diversify and strengthen partnerships with key regulators, domestically and internationally; and enhance our participation in multilateral fora, roundtables and workshops.

Align with and deliver on Canadian government priorities

We will align with and deliver on Canadian government priorities. As an independent law enforcement agency, we set and pursue our priorities in awareness of the broader Canadian context, the priorities of the Canadian government, and the interests of the Canadian public as a whole.

Increase organisational synergies through our people, planning and systems

Through greater internal collaboration, we will better integrate our business processes and better utilise our deep, diverse skill sets to ensure fair, healthy competition in Canada as efficiently and effectively as possible.

Delivering on these four priorities will ensure a balanced and integrated approach that will make our impact greater than the sum of our parts and allow us to utilise the full set of tools at our disposal: communication, education, suasion and enforcement. It will also allow us to collaborate with our stakeholders and cooperate with our enforcement partners to strengthen our capacity and broaden our reach. We look forward to advancing our ability to ensure a competitive marketplace, benefiting Canada through increased innovation and economic activity, and delivering more choice and lower prices to consumers.

International engagement

In today’s globalised marketplace, borders are overcome by digital consumers, outsourcing a wide range of services and global value chains. We cannot hope to fulfil our mandate of promoting and protecting competition and competitive markets in Canada or deliver on our priorities without establishing close working relationships with partners abroad.

Enforcement

Across a range of our concerns, enforcement of the law requires close collaboration with competition authorities in markets of interest to Canada and Canadians. Successful enforcement, in turn, requires understanding and trust – of processes, objectives, corporate culture and national legal requirements – between agencies.

Canada’s closest economic relationship is with the United States. We cooperate frequently with the US antitrust agencies, and our laws and processes are well aligned.

We are investing strategically in building strong international relationships because the benefits of successful enforcement cooperation are undeniable.

About a third of our cartel cases have an international dimension, and a quarter of complex merger reviews involve a significant level of cooperation with one or more international counterparts.

There are now approximately 120 jurisdictions worldwide that have instituted some type of competition regime. In today’s globalised and interconnected economy, a merger of international firms can require regulatory approvals in a dozen or more juris­dictions, and cartels in global industries impact multiple jurisdictions, as we are currently seeing in the auto parts matters, for example.

For competition agencies, enforcement cooperation increases the detection of anti-competitive activities, creates opportunities for investigative coordination, and allows agencies to share and compare substantive analysis, ultimately improving investigations.

As a practical example, where appropriate, we will consider the enforcement actions of other jurisdictions during our investi­gations. In 2013, we issued a no-action letter following our review of the acquisition of Life Technologies Corporation by Thermo Fisher Scientific Inc, after concluding that the proposed transaction would not substantially lessen or prevent competition in Canada as a result of, among other things, a remedy obtained by the European Commission. Also, in 2014, we issued a no-action letter in respect of Continental AG’s proposed acquisition of Veyance Technologies after concluding that the parties’ settlement agreement with the United States Department of Justice would adequately resolve compe­tition concerns in Canada.

Consistent and coordinated remedies help avoid potential friction stemming from situations where a remedy in one jurisdiction may not be acceptable in another, and can lead to more efficient and effective resolution than would be attained through independent enforcement action.

These tangible outcomes improve our ability to deliver on our domestic mandate in a cost-effective manner by working together with our international counterparts to tackle issues of mutual concern.

As the world grows ever-more interconnected, we will continue our investment to ensure that we develop the relationships to effectively enforce the Competition Act in matters with a global dimension.

Convergence

The continued march of globalisation is making the world a smaller place. Traditional economic relationships are increasingly complemented by new networks of trade and cooperation. Not all of the our new partners have the same level of knowledge, experience or capacity as our traditional partners.

The Canadian government has prioritised markets in Asia and Latin America for the expansion of trade relations, and has embarked upon an ambitious agenda of bilateral and multilateral trade negotiations to solidify these new networks. Canada has negotiated free trade agreements with Colombia, Peru and Korea, has ongoing negotiations with India, Japan and Singapore, and is a part of the multilateral Trans-Pacific Partnership talks.

As free trade agreements lead to increased economic activity, we have aligned our international engagement with government economic priorities to support and complement those goals.

Accordingly, in addition to maintaining strong connections with traditional Asia-Pacific partners, such as Japan, Korea, Australia, New Zealand, the US and Mexico, Canada is building new relationships with competition authorities in countries such as China, India, Colombia, Peru and Ecuador.

Canada uses tools, such as cooperation instruments, to solidify these bilateral relationships and lay the foundation for future cooperation, whether it is through staff exchanges, technical cooperation, regular meetings or enforcement work.

International organisations like the Organisation for Economic Co-operation and Development (OECD) Competition Committee and, more recently, the International Competition Network (ICN), have done a significant amount of work to articulate best practices in competition law enforcement and to encourage worldwide convergence in areas such as due process, transparency and the analysis of competitive effects.

This has gone a long way towards minimising inconsistencies in the analysis of competitive effects, and the application of national and regional competition laws.

The work contributes directly to our ability to cooperate with key international counterparts, and supports the effective enforcement of our laws.

We are engaged in both the OECD Competition Committee and the ICN and we hold key roles in both organisations, including:

• sitting on the executive of both the OECD Competition Committee and the ICN;
• acting as the ICN Secretariat and the ICN-OECD Coordinator; and
• being a co-chair of the ICN Mergers Working Group.

OECD and ICN work has resulted in a high level of convergence among jurisdictions by reviewing and commenting on national competition laws, by developing best practice recommendations, and by producing practical tools for new agencies. For example, the ICN has developed a thorough best practices handbook as well as video training modules in specific areas of analysis and investigation.

However, as the OECD recently noted in a 2014 report on international cooperation in competition law enforcement, the worldwide proliferation of competition regimes over the past 25 years brings challenges along with economic benefits (eg, conflicting decisions, repetition of investigative steps, etc).

As more and more jurisdictions adopt competition laws, it is not surprising that different approaches have emerged. After all, each country has its own cultural, political, economic and legal context.

This should not lead us to conclude that these differences are irreconcilable, however. The conversation is a two-way street – sharing experiences developed over time, but also considering new and innovative ways of doing things. We all have the same goal – the effective enforcement of our competition laws and regulations for the benefit of our economies and citizens.