Canadian COMPETITION LAW

December 5, 2012

In interesting and wide ranging comments given earlier today in Vancouver, as a prelude to published remarks, the Interim Commissioner of Competition John Pecman discussed current Bureau priorities, some key enforcement trends and gave some indication of future policy direction at the Bureau.

Perhaps appropriately, the Interim Commissioner began his remarks by noting that today, December 5^th, has been designated by the Indian based NGO CUTS International as “world competition day” (with this year’s topic being designated by CUTS as the impact of cartels on the world’s poor).

Some highlights from the Interim Commissioner’s remarks included:

Enforcement.  An overarching theme of today’s discussion in Vancouver was a continued focus on enforcement and an unwavering willingness by the Bureau to commence litigation (though underscored throughout the talk by a message that the Bureau continues to be interested in collaboration and dialogue).  While the Interim Commissioner said that the Bureau’s default is generally to work collaboratively, the Bureau will continue not to hesitate to litigate.  The Interim Commissioner also spoke about a desire to return to some of the “bread and butter” priorities of the Bureau in both the criminal and deceptive marketing areas.  Interestingly, the Interim Commissioner indicated that despite recent Federal budgetary cuts, the Bureau was working toward enhancing its internal litigation capabilities.

Consultations & New Guidelines.  The Interim Commissioner indicated that the Bureau would be commencing consultations with the competition bar in Canada in the new-year, as well as stakeholders, business groups and procurement groups to amplify and clarify several key areas, including the Bureau’s Immunity and Leniency Programs and electronic document production.  The Interim Commissioner also indicated that the Bureau would be working towards issuing new price maintenance guidelines, FAQs for unilateral conduct and new general guidelines on Bureau enforcement.  The Interim Commissioner also suggested a desire by the Bureau to move away from issuing advisory opinions in individual cases toward a focus on published materials (i.e., guidelines).

Maxzone.  With respect to the recent decision by Chief Justice Crampton in the Maxzone case, the Interim Commissioner indicated that the decision both sends a strong message that serious white-collar crime conduct akin to fraud should be appropriately punished (including by increasing recommendations for prison sentences) while other aspects of the decision were less workable practically, for example Chief Justice Crampton’s suggestion that defendants should work to achieve restitution with plaintiffs prior to plea agreements (which can delay criminal investigations).  In this regard, the Interim Commissioner commented on the existing partition between private actions and criminal enforcement, saying there already existed a mechanism for restitution (section 36 of the Competition Act – the provision under which private civil actions in Canada are commenced).  Overall, however, Mr. Pecman described the ongoing shift of Canadian courts toward sterner sentencing and recent Criminal Code sentencing amendments eliminating conditional sentences for cartel and bid-rigging offences as a “sea change” to how competition law offences are treated in Canada.

Immunity and Leniency Programs.  The Interim Commissioner spoke at several stages earlier today in relation to efforts by the Bureau to amplify and clarify its Immunity and Leniency Programs.

International efforts and cooperation.  The Interim Commissioner spoke highly of the Bureau’s participation in international enforcement fora, including the ICN and ICPEN (a multi-national consumer protection enforcement agency network) saying that the hard costs were minimal with significant learning and relationship benefits (i.e., fostering more cooperation between competition/antitrust agencies).

Advertising & Fair Business Practices Branch.  With respect to the Bureau’s Fair Business Practices Branch, responsible for administering the misleading advertising and deceptive marketing provisions of the Competition Act, the Interim Commissioner and other officers attending today discussed their ongoing participation in cross-border enforcement efforts (including work with the U.S. FTC and ICPEN), recent online enforcement sweeps, increased scrutiny in the digital and telecom spaces and briefly discussed the ongoing telecom cases in Canada.  The Interim Commissioner and other Bureau officials today also indicated that they were looking for more files in the digital media area, highlighting a desire for better disclosure (at one point referred to as “the best disclosure possible” for consumers).  At the same time, the Bureau officials today also said that there were many other issues regularly occurring in traditional advertising, including telemarketing, direct mail and Internet based fraud.  The Bureau officials today also said that the e-commerce area was “ripe for more work”.

Regulated conduct.  Interestingly, the Interim Commissioner and other officers attending today indicated a focused appetite to increase efforts in the regulated sector and, while not entirely precise, suggested that industries that the Bureau may be looking at included government retailing (e.g., liquor retailing in Canada).  These comments follow a recent C.D. Howe Institute report recommending that the Bureau increase its focus on regulated sectors and the regulated conduct defence.

Individual liability.  In a discussion about individual liability, following the recent Maxzone case and Criminal Code amendments eliminating conditional sentences for some competition law offences in Canada, the Interim Commissioner indicated that in most cases where Immunity is unavailable (or individual defendants have not been negotiated out under the Bureau’s Leniency Program), the Bureau would seek imprisonment.  In this regard, the Interim Commissioner indicated that the Code amendments eliminating conditional sentencing didn’t really alter the Bureau’s mandate to enforce the Act.  At the same time, the Interim Commissioner said that sentencing recommendations were highly fact specific, while at the same time saying that Parliament has given the Bureau “clear direction” to increasingly seek imprisonment in criminal competition law matters.

All in all, I would like to share my Competition Policy Roundtable colleagues in Vancouver’s sentiments by thanking the Interim Commissioner and fellow officers for taking the time to discuss the Bureau’s policies and enforcement priorities with us today.

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