Canada - Competition Bureau

The year 2015–2016 saw transformational change at Canada’s Competition Bureau (the Bureau).

We navigated a significant transition in direction and approach, which involved a new organisational structure, governance model and strategic plan. These changes are transforming the Bureau into a more open, collaborative and effective agency.

We shifted our operational approach toward collaboration, partnership, advocacy and outreach. This includes a renewed focus on international collaboration with the Asia-Pacific region, as demonstrated by our activities in 2015–2016, as well as specific collaboration targets for 2016–2017.

Activities at a glance

Guided by five strategic objectives, we worked hard to deliver on the commitments made in our 2015–2016 Annual Plan: Protecting and Promoting Competition for the Benefit of All Canadians. As described in the plan, the Bureau is committed to ensuring that Canadian businesses and consumers prosper in a competitive and innovative marketplace.

In the following section, we report on our work in 2015–2016 against five strategic objectives, as follows.

Increase compliance

The Bureau used all available enforcement tools to increase compliance with Canada’s competition laws. We worked diligently to prevent and deter anticompetitive or deceptive conduct that could threaten the health, growth or confidence in the Canadian economy. Enforcement tools used by the Bureau fall into two main categories:

  • facilitating voluntary compliance – encouraging businesses and individuals to take action to comply or to maintain compliance with the Competition Act; and
  • resolutions to non‑compliance – responding to, and resolving, alleged non‑compliance with the Competition Act, through either consent agreements, other consensual means or litigation.

In 2015–2016, the Bureau facilitated voluntary compliance by:

  • establishing a Compliance Unit, which enhanced our ability to promote compliance;
  • updating its Corporate Compliance Programs Bulletin, which is designed to help businesses of all sizes develop credible and effective compliance programmes. The updated bulletin, which was viewed over 3,200 times, pays special attention to the needs of small and medium-sized businesses;
  • delivering 12 compliance presentations to Canadian stakeholders, ranging from law firms, business and trade associations, to academia and government officials. The impact of these efforts was far greater owing to the collaboration of our international and domestic partners. For example, the Bureau:
  • held a joint corporate compliance workshop in partnership with the International Chamber of Commerce; and
  • gave a presentation on bid-rigging and compliance programmes in partnership with the City of Saskatoon and other local procurement authorities;
  • sharing best practices with foreign antitrust agencies and promoting the Bureau as an international corporate compliance leader;
  • extending our reach through the use of new media to deliver pertinent information in a format that is easy to consume, for example:
  • our compliance video was viewed over 8,000 times;
  • our website’s Corporate Compliance Portal offers resources to assist businesses and trade associations to recognise and prevent anticompetitive conduct. The Portal, which was visited more than 3,800 times, also includes information on how to establish an effective compliance programme; and
  • we delivered 64 publications over the course of the year, including information bulletins, videos, position statements and enforcement guidelines; and
  • releasing updated Intellectual Property Enforcement Guidelines (IPEGs), following an exhaustive and unprecedented consultation process that involved experts, stakeholders, other law enforcement agencies (including international partners) and the public. The updated IPEGs clarify our approach to conducting investigations of alleged anticompetitive activities that relate to intellectual property, making it easier for stakeholders to operate within the law. Main revisions to the guidelines include addressing patent settlements, product switching, and the conduct of patent assertion entities and standard essential patent owners.

All of these resources provide businesses and individuals with the tools that they need to understand their obligations under the Competition Act, and to be able to operate productively within the law. The positive response to our efforts to facilitate voluntary compliance in 2015–2016 mitigates some of the requirement for enforcement action by the Bureau. As such, these efforts represent an effective use of Bureau’s resources.

In 2015–2016, the Bureau also took action to address non-compliance by:

  • commencing 299 investigations and examinations;
  • participating in 16 active matters before the Competition Tribunal (the Tribunal) or courts;
  • signing and implementing five consent agreements;
  • participating in 24 alternative case resolutions;
  • referring two matters to the Public Prosecution of Service of Canada;
  • obtaining C$5.75 million in administrative monetary penalties;
  • returning C$7.34 million in restitution to consumers; and
  • as a result of our efforts, obtaining eight guilty pleas in cartel cases.

In addition, the Bureau completed 221 merger reviews, including 65 complex reviews, and met the service standards for timely review in 85 per cent of complex review cases and 96 per cent of non-complex review cases.

As these statistics show, the Bureau continues to ‘punch above its weight’ with the volume of work that it has done in 2015–2016 to increase compliance with Canada’s competition laws. But the results extend further than that, and include benefits to the broader community of stakeholders in competition law in Canada.

The Bureau’s work on the E-books case, for example, resulted in improved guidance on the Tribunal’s consent agreement process. An e-book retailer, Kobo, had challenged a consent agreement between the Bureau and four major e-book publishers, which raised questions about the Tribunal’s jurisdiction to rescind or vary consent agreements upon request by third parties. To gain clarity on this issue, the Commissioner of Competition (the Commissioner) filed a reference question with the Tribunal. After considering the issue, the Tribunal issued a reference decision, concluding that its jurisdiction to assess challenges by third parties is limited. This decision provides clarity not only to the Bureau, but to other stakeholders involved in competition law in Canada.

The Bureau also participated in its first-ever mediated settlement with the Tribunal in the Parkland Fuel Corporation (Parkland) and Pioneer Energy (Pioneer) merger. Parkland is an oil and gas company that operates or supplies close to 700 retail gas stations in Canada under the Fas Gas Plus, Race Trac Gas and Esso brands. The company had proposed to acquire an additional 181 corporate gas stations from Pioneer, and 212 supply agreements in Ontario and Manitoba. When the Bureau reviewed this proposed merger to assess the effect on competition, it concluded that the parties’ post‑merger market shares in these communities would be between 39 per cent and 100 per cent, and as these markets become more concentrated, the likelihood of price coordination between remaining retailers increases. The Bureau, therefore, sought an injunction requiring that Parkland preserve and operate the acquired Pioneer assets independently in these communities until the Tribunal reached a decision on the matter.

To resolve this complex matter, the Bureau agreed to negotiate with Parkland via mediation. The Bureau welcomes mediation as an additional tool for reaching mutually agreeable resolutions that achieve desirable competitive outcomes in an efficient manner. The move was also well received by the broader stakeholder community, with lawyers commenting that mediation could be a useful tool that quickly resolves disputes that threaten to delay merger closings and speculating about whether mediation could be the way of the future when it comes to merger challenges under the Competition Act. The consent agreement between the Commissioner and Parkland is the first of its kind reached through mediation.

Empower Canadians

The Bureau undertook a greater number and variety of awareness and outreach activities to empower Canadians in 2015–2016. The aim of these activities was to support an environment of competitive prices, greater product choice and informed decision-making.

In 2015–2016, the Bureau worked to empower Canadians by:

  •  attracting more than 695,000 visits to the Bureau’s website, demonstrating its value to Canadians as a central resource on competition matters;
  • increasing the visibility of the Bureau’s work with an expanded social media presence that included:
  • 981 tweets, up 61 per cent compared to 2014–2015;
  • twice the number of Twitter followers compared to 2014–2015; and
  • 13,880 social media hits in total;
  • releasing 86 announcements, including four consumer advisories; and
  • delivering 135 presentations to stakeholders.

Promote competition

The Bureau actively promoted and advocated for a more competitive marketplace in 2015–2016, emphasising smart regulation that does not unduly limit – or even restores – competitive forces in markets while achieving legitimate regulatory objectives.

In 2015–2016, the Bureau worked to promote competition by:

  • leading and participating in 25 advocacy initiatives;
  • delivering four formal submissions to regulators on:
  • a wholesale code to govern commercial arrangements between television service providers – cable and satellite companies – and television channel owners;
  • a service model that allows consumers to purchase online video‑on‑demand services without also being required to purchase additional services, such as a TV service or an internet connection, from a specific service provider;
  • encouraging competition for new and innovative payment methods in Canada’s retail payment systems; and
  •  modernising regulation in the taxi industry to enhance competition and choice, and lower prices for consumers. Many of the recommendations contained in the Bureau’s white paper were cited in and employed by a number of municipalities, including the cities of Ottawa, Edmonton, Toronto and Calgary in the development of their respective taxi regulations.

The Bureau also focused on increasing its outreach efforts to promote and increase compliance with Canada’s competition laws and to facilitate greater awareness and understanding of our work. This includes an increase in the number of presentations to corporate stakeholders across Canada, and educational presentations on bid-rigging to provide procurement authorities with the tools necessary to prevent and detect bid-rigging and other cartel activity. Statistics are provided above, under ‘Empower Canadians’.

The Bureau played a leadership role in the prevention of fraud in Canada and internationally through its role as chair of the Fraud Prevention Forum, a group of more than 125 private sector firms, consumer and volunteer groups, government agencies and law enforcement organisations committed to fighting fraud. The group hosts Fraud Prevention Month each year. This year’s campaign, ‘Recognize, Reject and Report Fraud!’, featured a series of events and a multimedia communications blitz aimed at equipping Canadians with information they need to be informed and confident consumers. The Bureau used both traditional and new media to reach consumers and businesses, and leveraged its partners and their contacts to reach new audiences. For example:

  • the ‘Too Good to be True’ (#2G2BT) Twitter chat provided consumers with information and tips on how to avoid becoming the victim of subscription traps, free trial scams and other types of common scams;
  • a short YouTube video, presented jointly by the Bureau and the Ontario Securities Commission, highlighted some of the most common investment scams; and
  • the third annual Anti-Cartel Day, held during Fraud Prevention Month, helped businesses to detect and prevent price-fixing and bid-rigging.

As a result of these efforts, the Bureau had the highest number of contacts with consumers in the six years of Fraud Prevention Month.  The Fraud Prevention Month hashtags, #FPM2016 (English) and #MPF2016 (French), were used more than 14,000 times by more than 4,500 participants on Twitter, which resulted in more than 56 million impressions for all tweets and retweets.

Collaborate with partners

International cooperation and multilateral fora are tremendously important in today’s open, increasingly globalised and digital economy.

Given the growing economic links between Canada and the Asia-Pacific region, and its importance in the global economy, the Bureau has been focused on developing strong ties with its counterparts.

The Bureau’s active collaboration with international partners in the Asia-Pacific region and elsewhere contributes to promoting and protecting a competitive global marketplace, addressing cross-border anticompetitive activity and promoting internationally accepted best practices.

The Bureau now has cooperation instruments in place with seven jurisdictions in the Asia-Pacific region: Australia, India, Japan, New Zealand, China, Taiwan and Korea.

Of these, two separate memoranda of understanding (MOUs) with Chinese antitrust authorities came into effect in 2015–2016: with China’s National Development and Reform Commission and China’s Ministry of Commerce. An MOU with China’s State Administration for Industry and Commerce was also signed in March 2015.

In addition, negotiations with the New Zealand Commerce Commission during 2015–2016 resulted in the signing of the Bureau’s first ‘second generation’ MOU, which will enhance co-operation in cross-border competition enforcement through information sharing and investigative assistance on international matters.

The Bureau builds strong relationships by meeting regularly with other competition authorities, and working closely with them through multilateral organisations such as the International Competition Network, the Organisation for Economic Cooperation and Development and Asia-Pacific Economic Cooperation. The Bureau met with a number of its Asia-Pacific counterparts in 2015–2016, including hosting a delegation from the Vietnam Competition Authority this year to share experiences on investigative processes and the handling of electronic evidence, among other things.

On the domestic front, the Bureau also actively collaborates to promote competition and to expand opportunities for Canadian participation in world markets. Domestic partners include the Canadian Intellectual Property Office (CIPO), the Canadian Radio-television and Telecommunications Commission, the Director of Public Prosecutions, the Market Surveillance Administrator of Alberta, Ontario Government Consumer Services, the Ontario Provincial Police, the Ontario Securities Commission (OSC), the Privacy Commissioner, Public Services and Procurement Canada and the Royal Canadian Mounted Police. Agreements with CIPO, the OSC and the Ontario Government Consumer Services came into force in 2015–2016.

In 2015–2016, the Bureau’s collaboration with international partners in the Asia-Pacific region and elsewhere was demonstrated by:

  • collaborating with international partners on 19 investigations;
  • meeting with competition authorities on 15 occasions to collaborate on competition law and policy issues; and
  • participating in 17 meetings and workshops organised by international organisations.

Champion excellence

The Bureau focused on continuous improvement and tangible results in 2015–2016, and promoted a culture of excellence founded on openness, collaboration and engagement.

In 2015–2016, the Bureau championed excellence by:

  • streamlining its eight branches into four and implementing a new governance structure;
  • building a new performance measurement framework to capture and reflect the results and outcomes of our work;
  • developing a talent management framework; and
  • contributing to departmental and government-wide initiatives related to information technology, information management, finance and human resources.

Looking forward to 2016–2017

The 2016–2017 fiscal year will build upon the changes that were implemented in 2015–2016 and continue the agency’s evolution toward a more open, collaborative and effective agency.

Guided by the five strategic objectives and the 2016–2017 Annual Plan: Strengthening Competition to Drive Innovation, the Bureau identified 10 areas of focus for the coming year, as follows.

Increase compliance

  • Support innovation in the digital economy by deterring anticompetitive conduct that impedes new entrants, products and services and by stopping deceptive marketing practices in e-commerce.
  • Raise awareness throughout the Canadian procurement community and among potential bidders about bid-rigging related to infrastructure spending, given increasing public-sector investment by:
    • delivering a minimum of 30 bid-rigging or compliance presentations to targeted audiences; and
    • using data-screening mechanisms to detect potential bid-rigging.
    • Increase small and medium-sized businesses’ awareness of the importance of complying with the statutes administered by the Bureau by:
    • leveraging membership networks of small and medium-sized businesses associations to expand reach; and
    • engaging in targeted outreach with small and medium-sized businesses across the country to promote the adoption of corporate compliance programmes.

Empower Canadians

  • Provide timely and accurate warnings to reduce the risk of Canadian consumers being victims of civil and criminal deceptive marketing by:
    • partnering with domestic enforcement agencies to develop a Consumer Deceptive Marketing Advisory System; and
    • increasing the Bureau’s use of social media and other digital engagement capabilities.

Promote competition

  • Foster innovation through a pro-competitive approach to regulation by:
    • undertaking a market study of technology-led innovation and emerging services in the Canadian financial services sector;
    • completing three competition promotion or advocacy pieces pertaining to new forms of competition.
  • Strengthen our analytical frameworks and address competitive implications through workshops with stakeholders by:
    • addressing markets impacted by innovative technologies, services and business models by hosting a workshop that examines emerging competition issues; and
    • hosting a workshop related to Anti-Cartel Day.

Collaborate with partners

  • Facilitate more transparent interaction with other domestic regulators and enhance our ability to effectively administer labelling statutes by concluding additional memoranda of understanding.
  • Enhance and strengthen our network of international partners to address anticompetitive activity and deceptive marketing practices that cross borders and to promote convergence in competition law policy by:
    • supporting trade liberalisation efforts of the government by engaging in competition-related cooperation with competition authorities in the Asia-Pacific region and other regions, as well as at least two technical cooperation and capacity-building projects;
    • fulfilling Canada’s free trade treaty obligations by advancing negotiations of competition-related cooperation instruments; and
    • informing and advancing competition policy by focusing our participation in multilateral international fora on topics related to efficiencies, innovative business models, the digital economy, market studies and the evaluation of the impact of competition authorities’ activities.

Champion excellence

  • Deliver a talent management strategy focused on planning, attracting, growing, engaging and retaining talent at all levels of the organisation
  • Undertake concrete actions to build and sustain a healthy, respectful and supportive work environment and improve internal communications focused on continuous engagement by:
    • implementing activities in the Bureau’s Action Plan in response to the 2014 Public Service Employee Survey;
    • building a respectful, healthy and inclusive workplace and mental health awareness through ongoing dialogue; and
    • fostering a strong culture of diversity and inclusiveness and commitment to the use of both official languages through ongoing activities and new initiatives.

With the Bureau’s priorities and objectives for 2016–2017 publicly available, the alignment between the Bureau’s annual activities and its strategic vision has never been more transparent. This includes the agency’s commitment to continuing to focus on strengthening ties with the Asia-Pacific region to ensure that businesses and consumers prosper in a competitive and innovative global marketplace.

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