November 30, 2022
On November 17, 2022, Canada’s federal Minister of Innovation, Science and Industry (the “Minister”) released a Statement from Minister Champagne on the launch of the Competition Act review (the “Statement”), which discusses a comprehensive review of potential fundamental changes to improve and reinforce Canada’s federal Competition Act.
This new government consultation follows the implementation earlier in June 2022 of what the Minister referred to as “targeted improvements” to the Competition Act. For more information about these earlier amendments, which largely came into force on June 23, 2022, see: Sweeping Canadian Competition Act Amendments Passed.
This newly announced federal government public consultation process is intended to achieve what the Minister describes as “broader changes” to the Competition Act and to “identify the best ways to modernize Canada’s competition framework”. These potential amendments, if passed, would represent the most significant overhaul of the Competition Act since 2009 when many of the cornerstone provisions of the Act were amended. The potential areas of amendment being considered by the government are set out in its discussion paper entitled The Future of Competition Policy in Canada.
Some of the key areas identified by the government for potential further Competition Act amendments include the following:
1. Reconsidering the merger efficiencies defence (under section 96 of the Competition Act), with a number of potential options being considered. These include limiting the application of the defence to where there is no harm to consumers or suppliers, treating efficiencies as one factor and not a complete defence to clear a merger, implementing a “consumer surplus” standard or removing the efficiencies defence altogether from the Competition Act.
2. Revising the pre-merger notification thresholds under the Competition Act for notifiable transactions to better capture particular types of mergers (e.g., in relation to the digital economy).
3. For non-notifiable mergers, extending the current one-year limitation period for Competition Bureau review (e.g., to three years) or tying it to voluntary merger notification filing.
4. In assessing civil abuse of dominance under section 79 of the Competition Act, better defining and capturing situations of de facto joint dominance (e.g., when firms may not be dominant themselves alone but collectively may have substantial anti-competitive influence on a relevant market).
5. Making it easier to deem or infer agreements under the civil competitor collaboration provision of the Competition Act (section 90.1) to reflect the realities of emerging technologies (e.g., potential coordination through algorithms).
6. Broadening or strengthening section 90.1 (e.g., by allowing review of past conduct, introducing monetary penalties and not requiring collaborations only between direct competitors).
7. Reintroducing buy-side cartel prohibitions under section 45 of the Competition Act (criminal conspiracy agreements) or making buy-side collusion subject to per se treatment under the civil competitor collaboration provision (section 90.1 of the Competition Act). These potential new prohibitions would go beyond the labour market specific wage fixing and no-poaching offences passed on June 23, 2022 and which will come into force on June 23, 2023. Such changes, if passed, would re-align the current criminal conspiracy offences with those under the former section 45 before it was amended in 2009 to apply only to downstream cartel agreements. For more information on the recently passed new employer wage fixing and no poaching cartel offences, see: New Proposed Competition Bureau Guidance on Wage-Fixing and No-Poaching Agreements.
8. Introducing further Competition Act amendments to better define false or misleading representations, particularly in relation to digital marketing. In this regard, new specific provisions were added to the Competition Act in June 2022 to prohibit drip-pricing, which has been an ongoing issue for the Competition Bureau, particularly in the car rental, airline ticket and event ticket industries.
9. Allowing private parties to seek compensation for damages suffered from civilly reviewable (non-merger) conduct.
10. Pursuing a “reasonable path” to facilitate information gathering by the Competition Bureau for market studies conducted by the Bureau.
Canadians that are interested in participating in the government’s Competition Act amendment consultations can make written submissions online up until February 27, 2023. For more information, see: Consultation on the future of competition policy in Canada.
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