On December 3, 2020, the Standing Committee on Industry, Science and Technology hosted a committee briefing on the Office of the Competition Bureau of Canada. The Commissioner of Competition, Matthew Boswell, as well as the Deputy Commissioner of the Competition Promotion Branch, Anthony Durocher and the Associate Deputy Commissioner of the Policy, Planning and Advocacy Directorate, Leila Wright, attended the briefing as witnesses.
The briefing included discussions on a range of topics, including the COVID-19 pandemic, data privacy, the digital economy, cooperation with the Bureau's global counterparts, and potential amendments to the Competition Act (the "Act"). Key takeaways from the briefing include:
- The digital economy remains a significant area of focus for the Bureau, which continues to prioritize enforcement in digital and data-driven markets. The Bureau faces challenges in administering the Act in relation to the digital economy due to the vast amounts of data in these markets.
- Convergence of Canadian competition laws with the competition laws of other countries, particularly the United States, would be beneficial for the Bureau and, in the Bureau's view, companies doing business in Canada.
- The Bureau views the proposed Bill C-11, a new data privacy bill, as having pro-competitive aspects, including the notion of data mobility, the scalability of financial penalties and enhanced information sharing between the federal Privacy Commissioner and the Commissioner of Competition.
- The Bureau continues to dedicate resources to monitoring deceptive marketing practices in relation to the COVID-19 pandemic.
Briefing on the Office of the Competition Bureau of Canada
The briefing began with an opening statement from Mr. Boswell, where he emphasized the importance of competition enforcement during times of crisis. The Bureau has been working with the government at all levels to emphasize the importance of competition in facilitating economic recovery in Canada following the COVID-19 pandemic. Additionally, Mr. Boswell highlighted that competition in the digital economy remains a significant priority for the Bureau.
The remainder of the briefing involved a question and answer period with the three witnesses.
The Digital Economy and "Big Tech"
Throughout the briefing, a number of committee members inquired about the Bureau's approach to competition in the digital economy. Mr. Boswell emphasized that the explosion of data in recent years has made competition enforcement more complex than ever before, and further, that competition agencies around the world have been grappling with how to manage dominant market participants in the digital economy. According to Mr. Boswell, access to data impacts a company's ability to scale, and ultimately, its ability to control the market. As a result, the Bureau remains focused on competition issues related to the control of data, including how such control may create barriers to entry for new market participants.
Mr. Boswell also briefly discussed the difficulties the Bureau faces with respect to administering and enforcing the Act in the digital economy, particularly in relation to "big tech" companies. He emphasized that, while the Bureau is committed to doing as much as it can with the resources it has available, those resources are limited. The heightened complexity that accompanies investigations in the digital economy necessitates an increased need for resources. Mr. Boswell noted that outside organizations, such as the C.D. Howe Institute and the Global Competition Review, have called on Canada to increase the Bureau's resources in order to address these complexities.
International Counterparts and Convergence of Laws
The briefing also involved significant discussion around how the Bureau works with its counterparts in other countries. Mr. Boswell emphasized the vital role that international cooperation plays in competition enforcement, particularly in the digital economy where companies are not restricted by physical borders. The Bureau has entered into numerous cooperation frameworks with partners around the world, including most recently alongside its "Five Eyes" partners (the United States, Australia, New Zealand, and the United Kingdom), the Multilateral Mutual Assistance and Cooperation Framework for Competition Authorities.
The committee also considered whether there was a need for convergence of Canadian competition laws with those of Canada's partners. Mr. Boswell acknowledged that the Bureau's recent guidance – clarifying that buy-side agreements (including employment-related wage-fixing and no-poaching agreements) would not be criminally investigated under the Act – puts Canadian competition law out of sync with comparable legislation in the United States. In that regard, Mr. Boswell stated that convergence of competition laws in North America would be valuable in many ways, particularly for the business community which would benefit from having a similar set of laws to follow in both countries.
Mr. Boswell further discussed the benefit of industry codes of conduct in sectors where there may be an imbalance of bargaining power. For example, following a market study by the United Kingdom's Competition and Markets Authority, the Groceries Supply Code of Practice was enacted which details how designated grocery retailers should manage their relationships with suppliers in order to remain compliant with the Code. While the Bureau is able to conduct market studies, it does not have the same market study power as its UK counterpart to compel information and provide recommendations to the government based on its findings. Mr. Boswell took the position that, when implemented, these codes of conduct have generally been well-received and appear to have assisted in managing any alleged imbalance of bargaining power.
Amendments to the Act
Committee members questioned whether amendments to the Act would better enable the Bureau to carry out its mandate. Mr. Boswell stated that it is always useful to review legislation to ensure the law is fit for its purpose, and a comprehensive review of the Act is worth considering. This comment was made in the context of penalties imposed for non-compliance under the Act, whereby Mr. Boswell took the position that scalable financial penalties that consider the operational size of the company, such as those in the proposed Bill C-11, are likely to encourage greater compliance.
In respect of amendments to the Act, Mr. Boswell also noted that the Minister of Innovation, Science and Economic Development asked the Bureau in May 2019 to review all aspects of Canadian competition law to ensure that it is fit for its purpose. The Bureau is continuing to work on this review alongside ISED policy leads.
The Bureau also provided input to the committee on Bill C-11, the proposed data privacy legislation currently being considered by Parliament. The Bureau welcomes the expanded information sharing abilities between the Office of the Privacy Commissioner and the Bureau under the Bill, noting that this would be an important development for each office to efficiently progress their respective investigations. Additionally, Mr. Boswell noted that there are pro-competitive aspects to the Bill, including data mobility, which would provide consumers with a data portability right to transfer information between service providers. This would increase competition and foster innovation in the respective markets, while empowering consumers with greater control over their personal data. Although the Bureau appears to have a positive view of the Bill, Mr. Boswell noted that it has not undertaken a thorough review of the legislation and was not asked to provide input at the time of drafting.
The Bureau's work in response to the COVID-19 pandemic was also considered during the briefing. At the beginning of the pandemic, the Bureau took the unprecedented step of issuing guidance to the marketplace regarding its willingness to exercise enforcement discretion for competitor collaborations related to maintaining supply chains for critical goods and services. The Bureau also established a dedicated team to monitor the marketplace for deceptive marketing and misleading representations, which saw a two-fold surge in complaints between April and June 2020. At the outset of the pandemic, the Bureau issued warning letters to dozens of companies related to false or misleading representations made in relation to products preventing, treating or curing COVID-19. The Bureau has been and will continue working closely with Health Canada on these pandemic-related advertising concerns.
The committee briefing highlighted that the Bureau remains focused on emerging competition issues in the digital economy. The briefing also provided insight into Parliamentarians' concerns as they relate to the Act and competition more generally, which focused extensively on dominance and dominant firms across a variety of industries, and the tools that the Act affords for dealing with market power.
The author would like to acknowledge the support and assistance of Irma Shaboian, articling student at law.
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