Canadian Government Announces Intent to Review Potential Changes to the Competition Act | Stikeman Elliott LLP

After years of debate over whether the competition law should be changed, the Canadian government announced plans to “carefully assess potential ways to improve its operation,” citing several concerns previously identified by the competition commissioner.

In one Press release on February 7, 2022, the Honorable François-Philippe Champagne, federal Minister of Innovation, Science and Industry, announced plans for a review of the competition law to improve its operation. There have been discussions and debates for some time about possible amendments to the Act. Most notably, Matthew Boswell, the Commissioner of Competition, argued for a full review of the law in a “call to action”. speech he gave at the Canadian Bar Association’s Fall Competition Law Conference in October 2021. However, prior to Minister Champagne’s announcement, there was not much noticeable public activity on the subject from the federal government as a whole.

In the press release, Minister Champagne highlighted six areas where the Canadian government will consider possible amendments to the Act:

  • Address gaps that allow harmful behaviors: The minister’s announcement did not specify the types of loopholes the government will close, and whether they are technical (as the word suggests) or substantive. However, in a interview with the Toronto Star (paywalled) he indicated that a review of the “efficiency defense” would be part of a broader review of the Act. The Commissioner and the Competition Bureau have long advocated the removal of the efficiencies defence, which permits mergers that the Bureau otherwise considers anti-competitive if the anti-competitive effects are outweighed by efficiencies. Whether the efficiencies defense should be understood as a “loophole” is a contentious issue, however. It is an explicit defense that has been enshrined in the Act since 1986 and that Canadian courts, including the Supreme Court of Canada, have upheld and even reinforced in case law over many years. In any event, it is unclear whether changes to the efficiencies defense will be considered as part of the review.
  • Dealing with drip pricing more clearly: Drip pricing is a deceptive marketing practice that occurs when the price a consumer pays for a product or service ends up being higher than the advertised price due to additional fees being added later in the process. of sale. In recent years, misleading advertising has been an enforcement priority of the Competition Bureau and it has reached numerous settlements with companies regarding marketing practices related to fee disclosure. Therefore, it is not immediately clear if or what legislative changes might be required to address the drip pricing issues.
  • Tackling wage-fixing agreements: Unlike other jurisdictions, “buyer” agreements between competitors are not subject to a criminal prohibition in Canada, as Parliament explicitly removed buy-sell agreements from the cartel provision in amendments to the Act in 2009. The Standing Committee on Industry and Technology called for these agreements to be added to the Act’s criminal cartel prohibition in a report released in June 2021 and the Commissioner noted that the exclusion of agreements from The purchase of the cartel provision is a loophole in the law. Anticompetitive purchase agreements may be subject to the civil provision of the Competitor Collaborations Act, but no such cases have been brought since 2009.
  • Increase access to justice for those harmed by harmful behavior: During the Commissioner’s speech in October 2021, he identified the lack of private enforcement tools for certain provisions of the Act, including abuse of dominance, as a concern affecting meaningful enforcement measures for the protection competition in Canada. Other reviewable matters under the Act, such as refusal to deal and price maintenance, already allow limited private rights of action with leave of the Competition Tribunal, which are almost never used. .
  • Adapt the law to today’s digital reality to better address emerging forms of harmful behavior in the digital economy: Adapting to the digital economy is a key theme of the Competition Bureau report Strategic vision for 2020-2024 and protecting competition in the digital economy has been an enforcement priority under Commissioner Boswell. At the end of 2019, the Competition Bureau issued a call out market participants with information on potentially anti-competitive behavior in the digital economy in order to better understand digital markets and how certain characteristics affect competition
  • Modernize the sanctions regime to ensure it serves as an effective deterrent against harmful business conduct: In his October 2021 speech, the commissioner called the maximum criminal fines and civil penalties available “weak” and asserted that they do not significantly deter anti-competitive behavior or promote compliance. To illustrate, the maximum civil penalty available in Canada is $10 million (or $15 million for subsequent violations), while the US Federal Trade Commission was able to fine Facebook $5 billion. Americans for violating privacy (the Competition Bureau obtained a fine of $9 million against Facebook for the same behavior).

The last major changes to the Act were implemented in 2009. It appears that the appetite for major changes has returned across the Canadian government and is listening carefully to concerns expressed by the Commissioner in 2021. and practitioners in Canada and abroad should pay close attention to these developments, as they could have significant implications for how businesses interact with Canadian competition laws.