Canadian COMPETITION LAW

October 25, 2013

Canada’s new Commissioner of Competition, John Pecman, spoke in Toronto yesterday and delivered remarks that, as in recent speeches, included an emphasis on trade association compliance.  In this, his second speech since becoming Commissioner, the Commissioner signaled that trade and professional associations were once again on the Competition Bureau’s radar.

In his trade association related remarks, the Commissioner said that three issues that would likely pique the Bureau’s interest in relation to associations and competition/antitrust issues were the following:

1.  Sanctioning or discriminating against members that do not adhere to recommended fee guidelines or other rules with respect to competitively important considerations.

2.  Using association rules to establish prices, mandate levels of service, restrict advertising, or to exclude viable competitors from the market.

3.  Making materially false or misleading representations to the public in promoting the business interests of the association’s members.

In addition to the above cautions, the Commissioner also made several compliance recommendations for Canadian trade and professional associations.

These included avoiding the exchange of competitively sensitive information through associations; adopting a credible and effective competition law compliance program; and getting legal advice around issues that may raise competition law issues.

This is not the first time the Commissioner has spoken about competition law issues and associations.  In remarks last fall while Interim Commissioner, Mr. Pecman set out a number of other types of association related issues that would likely cause concern for the Bureau, including: restricting the types of professional service practice offerings; limiting the number or range of members or the ability of members to compete (e.g., through fee guidelines or adoption of discriminatory product standards); or that reduce incentives to compete (e.g., through information sharing agreements).

Also, in one of the Bureau’s most detailed statements on associations to date, in 2008 the Commissioner (then Senior Deputy Commissioner of the Bureau’s Criminal Matters Branch), discussed a range of association and competition issues in detail, including information sharing, agendas and meetings, membership, fee guidelines, association discipline, codes of conduct and compliance programs.  While trade and professional association activities are not inherently anti-competitive, nor does the Bureau take this position, they are a common (and historic) source of criminal and civil competition law risk both in Canada and internationally.

Some basic competition law best practices for trade associations include:

1.  Adopt and maintain a credible and effective compliance program.

2.  Adopt agendas and minutes for all association meetings.

3.  Use conduct of meeting guidelines.

4.  Perform periodic compliance audits or reviews.

5.  Conduct competition compliance orientations for new association staff.

6.  Get legal advice for initiatives that may raise competition issues.

7.  Avoid informal or “off the record” meetings.

8.  Generally review all association activities through a “competition lens”.

For more on Canadian competition law and associations see: Competition Law and Associations.  For more about competition law compliance programs see: Competition Law Compliance Programs.

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