Bill C-23 — An Act to Amend the Competition Act and the Competition Tribunal Act

Speaking Notes for
Konrad von Finckenstein
Commissioner of Competition

November 7, 2001

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Introduction

Thank you Madam Chair and members of the Committee for again inviting me to appear on Bill C-23 - an Act to amend the Competition Actand the Competition Tribunal Act. We have followed your proceedings with great interest and listened carefully to the comments. The Committee is to be commended on the excellent work it has carried out in studying the issues raised by the Bill as well as those relating to the subject of private access to the Competition Tribunal.

It would appear that there is a consensus that the provisions contained in Bill C-23 are needed. We are encouraged by the significant and broad support given to the Bill. Comments and concerns raised by members of the Committee as well as witnesses, however, suggest that some changes to the proposed amendments are appropriate.

Deceptive Notices

First, the proposed amendments concerning deceptive notices, based on proposals originally put forward by Ms. Torsney, can be clarified by a technical change to ensure that a legitimate contest promoter conducting a draw is not captured by the provision.

Let me draw your attention to section 53 on page 22 of Bill C-23. Subsection (1) prohibits the sending of a notice which

"gives the general impression that the recipient has won, will win, or will on meeting a condition win a prize or other benefit, and if the recipient is asked or given the option to pay money, incur a cost or to do anything that will incur a cost."

Some concern has been expressed that the phrase "will on meeting a condition win" could capture standard, legitimate contests such as those which essentially say "you have won on the condition that your name is drawn." Replacing the phrase "will on meeting a condition win" at line 10 with the phrase "will on doing a particular act win" eliminates this possibility. As you may recall, both Mr. Musgrove and Mr. Woolford supported this change and indicated that it satisfied their concerns.

The Competition Bureau would also propose qualifying the term "notice or document" on line 8 with the phrase "in any form" to ensure that the provision addresses all forms of deceptive prize notices.

International Cooperation

Evidence Gathering in Civil Competition Matters

Secondly, concerns have been raised in discussions involving the provisions in Bill C-23 related to international cooperation in evidence gathering with respect to:

(a) the absence of specific protection provided under section 29 of the Competition Act for information provided voluntarily; and

(b) the possibility that information in the Competition Bureau's possession, at the time it received a request for evidence, could be provided to a foreign competition authority without going through the formal, judicial authorization process outlined in Part III of Bill C-23.

On the first point, it has always been the Competition Bureau's practice, set out in our information bulletin, to not provide foreign authorities any confidential information that was given to the Bureau voluntarily except under the exceptions contemplated in section 29. Nevertheless, although we do not think any changes to section 29 are needed, the Bar, Business Council on National Issues and many other stakeholders have clearly indicated that they want assurances that this practice will be continued. Accordingly, to reinforce our practice, the Bureau would propose adding to section 29 of the Competition Act, which concerns the treatment of confidential information and specifies the type of information to which the section applies, the phrase:

"(e) any information provided voluntarily pursuant to the Act."

Since there are occasions when the parties providing information voluntarily have no objection to the information being provided or discussed with foreign authorities (complainants who are, for example, victims of international scams), the Bureau also proposes adding to subsection 29(2) which currently reads

"This section does not apply in respect of any information that has been made public."

the words

"or any information the communication of which was authorized by the person who provided the information."

With respect to the second point, involving information already in the possession of the Competition Bureau at the time it received a request for evidence from a foreign authority under a mutual legal assistance treaty, it is our view that the proposed provisions in Bill C-23 implicitly required that this information could only be provided under the judicial authorization process required under the new Part III. Out of an abundance of caution, however, the Bureau would suggest making it explicit and would propose adding a new subsection to Part III after s.30.29 on page 20 of Bill C-23:

"30.291 (1) For greater certainty, any evidence requested by a foreign state under an agreement may be obtained for the purposes of giving effect to the request only in accordance with the agreement and the procedure set out in this Part, even in the case of records or other things already in the possession of the Commissioner.

(2) This section does not apply in respect of any information that has been made public or any information the communication of which was authorized by the person who provided the information."

Interim Orders

A number of witnesses spoke on the subject of the proposed new interim order authority, s. 103.1.

One of the concerns raised was the possibility that an interim order could be sought without the Commissioner having reason to believe that grounds for an order by the Tribunal existed. This is the standard for the Commissioner to initiate an inquiry under s.10(1)(b) of the Competition Act and s.103.1 requires that the Commissioner certifies that an inquiry is being made under section 10. It is, however, also possible for an inquiry to be initiated under s.10 if requested by six residents of Canada or the Minister. It was not our intent to be able to ask for an interim order in those circumstances and the Bureau would propose to make this clear by simply changing the phrase "section 10" in section 103.1, on line 20 on page 27, to "paragraph 10(1)(b)."

Concern has also been expressed that section 103.1 does not specifically require it to find that the relevant conduct is of the type described in subsection 103.1(1) (such as refusal to deal, market restriction and abuse of dominance). While the Bureau views this as an implicit requirement, it would suggest making it explicit by adding to line 27 on page 27:

"order if it finds that the conduct or measures could be of the type described in paragraphs (1)(a) and (b) respectively, and that, in the absence of an ..."

Consent Agreement Process

Concern has also been expressed that subsection 105(2), dealing with the possible terms of a consent agreement between the Commissioner and a person against whom an order from the Tribunal has or might be sought, is too broad. We do not agree with this view. Our intent was to provide a provision that would allow us to address competition concerns in a flexible manner. Nevertheless, because of the concerns that were raised, the Bureau would propose changing subsection 105(2) on page 29 at line 36 so that it only reads:

"The consent agreement shall be based on terms that could be the subject of an order of the Tribunal against that person."

In other words, the rest of the section, "and may include other terms, whether or not they could be imposed by the Tribunal," should be taken out.

In order to make the latter change meaningful, the Bureau would also suggest changes to section 106 which would make it possible for a third party, directly affected by a consent agreement, to apply to the Tribunal for a change to an agreement on the grounds that the relevant terms could not have been subject to an order by the Tribunal. This could be done by adding the following new subsection to s.106 after line 27 on page 30:

"(2) A person directly affected by a consent agreement, other than a party to that agreement, may apply to the Tribunal within 60 days after the registration of the agreement to have one or more of its terms rescinded or varied. The Tribunal may grant the application if it finds that the person has established that the terms could not be the subject of an order of the Tribunal."

Private Access to the Competition Tribunal

The one issue that remains is private access to the Tribunal.

As the Minister has stated, major changes to framework law, such as the Competition Act, require broad support. The Bureau continues to believe that some form of private access is necessary in order to round out enforcement of the Competition Act but whether this is the appropriate time is something that the Committee must consider.

Conclusion

I would like to thank the Committee for this final opportunity to discuss Bill C-23. With the changes that we have proposed, as a result of your hearings, I am convinced that the Competition Act will be significantly strengthened and improved. I would be pleased to answer any questions you may have.