Annual Report of the Commissioner of Competition for the year ending March 31, 2004

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Chapter 7: How We Do It All

Communications helps to ensure that Canadian consumers, businesses, government agencies and the international community are aware of the Bureau's crucial contribution to competition in the marketplace and to the growth of the Canadian economy.

As described below, the Bureau communicates with Canadians in a variety of ways: through the media, publications such as information bulletins, guidelines, handbooks and pamphlets, warnings to consumers, the Web site, the Information Centre, stakeholder consultations, speeches and seminars, and other initiatives.

Media Relations

The media play an important role in the democratic process, and the Bureau increasingly reaches Canadians through the media. In 2003-2004, the Bureau issued 20 news releases and 25 information notices, describing the benefits of its activities for Canadians and the economy. Staff also responded to hundreds of enquiries from journalists in Canada and abroad. Senior managers at the Bureau were accessible to the media and acted as spokespeople on key issues. This resulted in 2069 stories mentioning the Bureau, an increase of 78 percent from the previous year.

An independent analysis of the media coverage revealed that the Bureau is portrayed as a multi-faceted organization and is being covered by more media outlets. In addition to stories about merger review, stories appeared about Bureau investigations into various anti-competitive practices by businesses. Coverage also focussed on consumer issues, moving Bureau stories from the national businesses pages into other sections of the newspaper. The amount of radio and television coverage also increased from previous years. Broadcast stories reached small, regional communities, where people may not previously have been exposed to Bureau messages.

Information Bulletins, Guidelines, Handbooks and Pamphlets

The Bureau views publications as an important tool to promote competition activities. From time to time, it publishes information bulletins, guidelines, handbooks and pamphlets to clarify its position on issues that raise questions among members of the public and on matters in which the interpretation of the Competition Act is not easily understood.

Information Bulletin on Private Access to the Competition Tribunal

On September 18, 2003, the Bureau released the Information Bulletin on Private Access to the Competition Tribunal. This bulletin outlines and clarifies the Bureau's role in private access matters and discusses the circumstances in which the Bureau intervenes in these proceedings. Private access was made possible by the amendments to the Competition Act that came into force in June 2002. Private parties are now allowed to apply for leave to bring a matter before the Competition Tribunal when they are directly and substantially affected by the conduct of another party. Private access is available only for conduct reviewable under the refusal to deal, exclusive dealing, tied selling and market restriction provisions of the Competition Act (i.e. sections 75 and 77). The private access provisions were added to complement the Bureau's enforcement role and increase the deterrent effect of the Act.

When a private party applies for leave to bring a matter before the Competition Tribunal, the Bureau must be notified. The Bureau certifies to the Tribunal whether the matter is currently under inquiry or whether it was the subject of an inquiry that was discontinued following a settlement. Once the Tribunal receives the Bureau's certification, it notifies the applicant and any person against whom the order is sought whether it can hear the application. Before the Tribunal makes its decision, parties to the application and the Bureau may make written representations to the Tribunal. It is unlikely that the Bureau will make a written representation at this stage, except in exceptional circumstances, when the intervention can have a significant impact on the Tribunal's decision to grant leave. If leave is granted¹ and an application filed with the Tribunal, the Bureau could intervene at any stage of the proceedings. It could also intervene in a private proceeding, when a consent agreement is reached between private parties.

When deciding whether to intervene, the Bureau considers a variety of factors, including, most importantly, whether the matter gives rise to significant competition concerns and whether intervention is in the public interest. The Bureau may also consider whether the impact on competition is circumscribed by the private and local character of a dispute, or whether it applies to a wider geographical area. The impact on consumers, the business community and the Canadian economy also affects the decision.

Draft Guidelines: Deceptive Notice of Winning a Prize Provision

On August 26, 2003, the Bureau released the Draft Guidelines on the Deceptive Notice of Winning a Prize Provision (Section 53 of the Competition Act) and invited the public to submit comments and suggestions. The guidelines were released to provide a better understanding of the Bureau's approach to enforcing section 53 and on elaborating the various elements of the provision. Comments and suggestions received in the course of the consultations have been reviewed and will be considered when finalizing the guidelines.

Canadian Guidelines with Respect to the Sale and Marketing of Diamonds, Coloured Gemstones and Pearls: Revised Edition 2003

On August 11, 2003, the Bureau endorsed a set of guidelines to help the Canadian jewellery industry provide consumers with consistent, accurate and meaningful product information. The guidelines were first developed in 1994 by a Jewellers Vigilance Canada special committee that included industry members and a Bureau representative. The guidelines were revised in 2003 to reflect amendments to the Competition Act, as well as changes to Canadian jewellery definitions, to ensure they remain consistent with international standards.

International Guidelines for Co-operation Against Cross-border Fraud and Deceptive Commercial Practices

On June 17, 2003, the Bureau announced its participation in the adoption of the Organisation for Economic Co-operation and Development's (OECD) OECD Guidelines for Protecting Consumers from Fraudulent and Deceptive Commercial Practices Across Borders.

For years, cross-border scammers have hidden behind national boundaries to evade law enforcement authorities. These guidelines provide OECD member countries with a list of recommendations, including broad principles for international co-operation as well as specific provisions covering notification, information sharing and assistance with investigations. The guidelines also cover issues regarding the authority of law enforcement agencies, encourage private-sector co-operation and set the stage for future work on consumer redress.

The guidelines were prepared by the Committee on Consumer Policy of the OECD. The Bureau, along with the Office of Consumer Affairs, represents Canada on the committee. The Bureau is involved in implementing the guidelines in Canada

Fee and Service Standards Handbook

The Bureau made a number of changes early in 2003-2004 to enhance client service and reduce the regulatory burden for merging parties involved in small transactions. The Fee and Service Standards Policy and the Fee and Service Standards Handbook, which came into force on April 1, 2003, can be found on the Bureau's Web site (www.competitionbureau.gc.ca/eic/site/cb-bc.nsf/eng/01249.html).

In December 2003, the Bureau made minor revisions to the handbook as a result of stakeholder feedback and Bureau experience during the first six months of the revised policy. These amendments include the following:

• clarifying the definition of a very complex merger;
  
• clarifying when and how the Bureau seeks consent from parties to publish a written opinion on its Web site;
  
• clarifying when the Bureau may exercise its discretion not to provide an opinion with respect to certain multi-level marketing plans;
  
• clarifying the information requirements for requesting a written opinion under paragraph 74.01 (1)(b) (representations not based on adequate and proper tests); and
  
• removing the following from section 74.06 (promotional contests) as an information requirement for requesting a written opinion: "The legality of the promotion under other applicable legislation such as the Criminal Code."

The handbook applies to merger notification filings and advance ruling certificate requests related to merger review, written opinion requests and photocopies of documents.

Pamphlets

On October 28, 2003, the Bureau published updated pamphlets on refusal to supply, exclusivity and abuse of dominant position. These pamphlets provide an overview of the respective provisions of the Act and set out the tests the Bureau uses when determining whether concerns arise under the Act. The new information reflects recent amendments to the Act (Bills C-23 and C-26).

Other Publications

In addition to the Bureau's official publications, Bureau staff published academic papers related to competition policy or sectors in which competition policy is a concern (see Appendix II).

Warnings to Consumers

The Bureau periodically issues warnings to alert consumers to potentially illegal or misleading activities in the marketplace. In 2003-2004, the Bureau warned consumers on four occasions, as described below.

Lawn Care Services

On May 16, 2003, consumers were urged to do their homework before purchasing lawn care services that claimed to be green, environmentally friendly, ecologically friendly, organic or safe. With the public's mounting concerns about pesticide use, the market for safe lawn care services is expanding. Many companies offer exclusively chemical-pesticide-free services, while others have added chemical-pesticide-free or "organic" services to their list of offerings. However, since services differ from company to company and from program to program, the advertising can be confusing and potentially misleading. The Bureau has developed a list of questions consumers should ask before signing a contract.

Invention Promotion Firms

On November 7, 2003, the Bureau issued a warning about "all-in-one" invention promotion firms that promise to evaluate, develop, promote, patent and market inventions. The Bureau cautioned that, while most invention promotion firms are legitimate, some unscrupulous firms can prey on an inventor's enthusiasm and make false or exaggerated claims about the market potential of an invention. Once hired, these firms often do little or nothing to earn their fees. To protect against such exploitation, the Bureau suggested taking various precautions.

Bait and Switch Advertising

On November 27, 2003, the Bureau issued a warning to consumers and businesses to look out for "bait and switch" advertising, particularly over the holiday season. The warning was the result of the significant increase in the number of complaints the Bureau received about advertisers and retailers promoting a variety of products -- including computers, home electronics, hardware and small appliances -- and services, especially those sold in conjunction with consumer products. Under the Competition Act, companies are prohibited from advertising bargain prices for products that they do not have available in reasonable quantities. Retailers that contravene the law may be ordered by the Competition Tribunal to stop the conduct, publish a corrective notice, and/or pay a significant administrative monetary penalty.

Bogus Jewellery Appraisal Values

On February 5, 2004, the Bureau warned consumers to watch out for jewellery retailers using inflated appraisal values as a selling tool around Valentine's Day. Consumers are often deceived into believing that they are getting a bargain by purchasing items at a price significantly lower than the appraised value, and subsequently finding that the discounted cost of their purchase is actually the price other retailers charge.

The Web Site

The Bureau's Web site (www.competitionbureau.gc.ca) continues to be a valuable source of information. The site features an automatic e-mail distribution list that sends subscribers information updates. More than 2300 people have subscribed to this service.

Information notices, news releases, speeches, warnings and the most recent versions of all publications are available on the site. Consumers and businesses also have access to electronic commerce applications, such as the CA Number Database.

Over the past year, the site has been updated to embrace the latest technology and now includes a new and powerful search engine, allowing stakeholders to easily access valuable information. Features include a search function in each section of the Web site, percentages to represent the compatibility of results with the keywords entered, and a detailed description of the content of these results.

The Bureau also conducted an online poll to find out about users' experience browsing the site. The site will be redesigned to reflect those comments as well as information gathered during personal interviews with key stakeholders.

Information Centre

The Information Centre is the primary gateway into the Bureau for Canadian and international consumers, businesses and other organizations. In 2003-2004, eight employees at headquarters handled 58 038 requests for information and complaints -- four percent more than in the previous year (see the following chart for additional information).

The information gathered by the Centre is essential to helping the Bureau shape its public awareness and enforcement activities.

The public can contact the Centre in several ways:

• through its toll-free line (1-800-348-5358) from 7:30 a.m. to 8:00 p.m. (EST);
  
• online: Enquiries/Complaints
  
• through an electronic complaint form available on the Bureau's Web site (www.competitionbureau.gc.ca);
  
• by facsimile (819-997-0324); and
  
• by mail (Competition Bureau, 50 Victoria Street, Gatineau QC K1A 0C9).

With the growth of electronic commerce and the Bureau's increased accessibility and profile through media coverage and Government On-Line, the Centre has seen a 5.9 percent increase in contacts via the Internet over last fiscal year (2002-2003) in addition to the 53 percent increase since 2001-2002.

Stakeholder Consultations

The Bureau's new Commissioner has made it a top priority to hear the views of stakeholders across Canada to ensure that Canadians continue to enjoy the benefits of a fair and competitive economy, competitive prices, product choice and quality service. Consequently, between January and March 2004, the Commissioner held consultations in every province with consumer and public interest groups, private sector organizations, members of the legal and academic communities and provincial government and law enforcement officials.

Feedback Cards

The Bureau encourages stakeholders to comment on service provided for merger notification filings, requests for advance ruling certificates and written opinions through feedback cards, which were revised this year. It is anticipated that the new forms, which target specific services and provide more space for comments, will encourage more clients to respond. Ninety-one percent of those who have responded indicated that service from the Bureau was either good or excellent.

Speeches and Seminars

Speeches and seminars have become an increasingly important mechanism for promoting competition. These key communication tools are strong pillars of the Bureau's Conformity Continuum in support of its advocacy and education efforts. Speeches and seminars are primary vehicles for promoting a pro-competitive marketplace and developing competition policy and legislation. They also enable the Bureau to inform consumers and businesses about how the Bureau enforces the law and the actions it takes to promote and preserve competition in the Canadian marketplace. The Commissioner is often invited to speak at and participate in conferences and other events both within Canada and abroad. In addition, the Bureau regularly invites experts in the antitrust field to present their latest findings and to review the most recent developments in antitrust literature relevant to the Bureau's work. See Appendix III for more information.

Other Initiatives

Special Constable Status for Competition Law Officers

Special constable status was granted to 10 competition law officers from the Bureau's Ontario Region and eight from its Prairie and Northern Region, allowing them to serve summonses and subpoenas while fulfilling their duties under the Competition Act, the standards-based statutes and the Criminal Code. The Bureau now has officers with special constable status in Nova Scotia, Prince Edward Island, Quebec, Ontario, Manitoba, Saskatchewan, Alberta and British Columbia.

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Footnotes

¹ Leave has been granted in two cases (see chapter 3, page 23).