In November 2020, the Competition Bureau hosted its first annual Digital Enforcement Summit, which saw the Bureau and its international counterparts discuss strategies and tools for adapting to emerging competition enforcement issues in the digital economy.
The Digital Enforcement Summit focused on enforcement issues faced by competition agencies from the pre-investigation stage of potential anti-competitive activity to the resolution stage. Notable highlights from the discussions include:
- Enforcement agencies are leveraging technologies like cloud computing and natural language processing to gather evidence in response to difficulties in detecting anti-competitive activity in digital markets;
- Changes to competition laws and regulations are perceived as necessary to give competition agencies the tools necessary to address complex conduct in the digital economy;
- Enforcement agencies are hiring staff outside the traditional disciplines of lawyers and economists, including data scientists, behavioural scientists, and IT analysts, to address competition issues in the digital economy; and,
- Consent agreements and market study powers were identified by panelists as effective tools to remedy anticompetitive conduct outside of the adjudicative process.
The Digital Enforcement Summit
In February 2020, the Bureau published its Strategic Vision for 2020-2024, which noted an increased focus on proactive enforcement and the Bureau's plan to position itself as an agency at the forefront of the digital economy. As part of this plan, the Bureau committed to hosting an annual Digital Enforcement Summit to foster open dialogue and collaboration with domestic and international stakeholders on the challenges and opportunities of competition enforcement in the digital era.
The first Digital Enforcement Summit was held in October and November 2020, consisting of four expert panel discussions featuring members of competition enforcement agencies from around the world. Each panel focused on issues central to the enforcement of competition in the digital economy over the course of an investigation, and more specifically:
- The role of digital intelligence in the pre-investigative stage and advances in the process of evidence gathering;
- How enforcement agencies adapt major case management and team composition for digital investigations;
- Innovative investigative strategies, including artificial intelligence and predictive coding in document review; and
- Emerging approaches to case resolution and litigation in the digital economy, including evolving evidentiary burdens in court.
Digitally Oriented Competition Agencies
According to the panel, the growing digital economy and continuous corporate accumulation of data has led to an increased need for updates to competition law as well as the structure of enforcement agencies. To keep pace with data-focused corporations and to effectively pursue data-intensive investigations, panelists viewed the adoption of inter-disciplinary teams that include data and behavioural scientists, as well as intelligence and IT analysts, as critical for enforcement agencies. The panel said that they expect ongoing developments in digital regulations to allow competition agencies to address complex conduct in the digital economy, with a particular focus on information gathering powers, natural language data processing, and algorithmic analysis.
Detecting Anti-Competitive Behaviour
The initial stage of an investigation requires an enforcement agency to first detect potentially anti-competitive behaviour and then collect necessary evidence to support that allegation.
The panelists noted that detecting anti-competitive activity has become an increasingly data-intensive process, as corporate decision-making has become more sophisticated and automated within digital platforms. Additionally, the panelists noted that digital markets evolve rapidly, which in turn has tested the ability of enforcement agencies to detect anti-competitive activity, as it may exist only for a short period of time before adapting to new market conditions. In response to these issues, panelists noted that agencies should continuously evolve how they leverage data in their investigations and should engage in proactive detection using digital detection tools. One such digital detection tool noted by the panel is bid-rigging screening, where enforcement agencies use algorithms to sift through electronic bidding data for possible signs of collusion. The panel also noted that natural language processing, an emerging artificial intelligence technology that allows agencies to parse digital evidence and understand contextual information in real time, can also be an effective detection tool.
Investigative Tools in the Digital Age
The panel discussed the tools available to enforcement agencies that allow them to target strategic sectors within the digital economy. Data analytics and algorithmic screening were noted as useful tools to detect suspicious behaviour, while social media was recognized as a useful, although less traditional, resource to collect information.
The use of cloud computing was identified by the panel as an innovative way to process large data sets faster in order to improve evidence analysis and review. Additionally, predictive coding and artificial intelligence were described as useful tools to efficiently collect and analyze large amounts of data, particularly during document reviews. While recognizing the benefits of these tools, panelists also noted that the increase in digital evidence analysis has presented challenges for agencies' resources and investigation timelines. According to the panel, the increasing use of ephemeral messaging - messages which disappear after being viewed - and self-destructing encrypted data present additional challenges for evidence collection.
Given the fast-paced nature of technology, some of the panelists argued that existing competition enforcement tools are not well-suited for digital markets, due to the time it takes to build an investigation and implement appropriate interventions, during which some digital platforms may be able to gain substantial, entrenched market power.
Case Resolution Strategies
The panelists also considered how specialized tribunals and courts have adapted in response to digitization. Particularly, these adjudicative bodies have adjusted their operations to allow disclosure obligations to be met electronically and have allowed virtual hearings. Consent agreements were also recognized as an effective tool for remedying conduct outside of a formal adjudicative process. The efficiency of market study powers was also discussed, with some panelists taking the position that inquiries into digital platforms allow for significant intervention early on in important markets.
The Digital Enforcement Summit highlighted the approaches that agencies are using to tackle emerging enforcement issues and the efforts they take to keep pace with changes in the digital economy. Despite the dynamic nature of the digital markets, there was consensus among the panelists that the core of competition enforcement agencies' work remains unchanged.
The author would like to acknowledge the support and assistance of Irma Shaboian, articling student at law.
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