Annual Report of the Commissioner of Competition for the year ending March 31, 2002

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Interacting with Canadians

Communicating effectively is very important to the Bureau, and is an essential part of its work. Good communication ensures that Canadians know and understand the Bureau's role, and that businesses receive the information they need to comply with the law. The Bureau routinely monitors the marketplace and regularly visits businesses and stakeholders. It also encourages Canadians to come forward with information they may have about suspected anti-competitive activities. The Communications Branch works with other branches to ensure Bureau communications are coordinated and consistent.

Revitalizing Communications with Stakeholders

In the spring of 2001, the Competition Bureau began building new partnerships with business, legal and consumer associations directly affected by its work. These efforts are focussed on improving relationships and raising awareness of the Bureau's operations, and involve strengthening the Bureau's communications and developing an open dialogue with these stakeholders.

Information Centre

Information requests and complaints to the Bureau's Information Centre continue to provide valuable information that the Bureau uses to target education and enforcement activities. Information Centre staff receive requests through a 1-800 line available from 7:30 a.m. to 8 p.m. (eastern time), as well as via the Internet, fax and regular mail. The volume of complaints and information requests continues to be high: 49 587 complaints and requests in 2001-2002, compared to 54 479 in 2000-2001 and 47 975 in 1999-2000. Internet requests increased from 2542 in 1999-2000 to 4261 in 2000-2001 to 6381 in 2001-2002.

A client service benchmarking study, initiated in 2001-2002 and planned for completion in 2002-2003, will help ensure that processes are efficient, that clients receive excellent service and accurate information, and that the Bureau meets the government's Results for Canadians goals, one of which is to improve service by 10 percent by 2004.

The Web Site

The Bureau's main communication tool is its Web site, which features news releases, speeches and information notices. The site also provides users with information about Bureau activities and decisions, as well as quick access to consumer information and warnings, legislation, information on international affairs, policies and guidelines.

The Bureau site also provides easy access to electronic commerce applications for all Canadians. Both businesses and consumers can submit enquiries and complaints on-line, and request and pay for an on-line advisory opinion in the Business Services section of the site. Canadian textile retailers, wholesalers, manufacturers and importers can apply and pay for CA numbers, which identify these businesses, through the site.

The site also features multimedia products on bid rigging (see page 3) and multilevel marketing (see page 12). These easy-to-use tools provide information and promote compliance with the Competition Act.

Presentation on Bid Rigging

The Bureau has developed a multimedia presentation as an educational tool to help detect bid rigging. The presentation explains how to identify the warning signs of bid rigging, provides viewers with information on what to do when they believe they are victims of this practice, and offers suggestions to help prevent bid rigging from occurring. The presentation also includes details on how the Bureau investigates bid rigging, and information for people who may be involved in this type of illegal conduct.

The presentation is available on the Bureau's Web site and CD-ROM. To obtain a copy of the CD-ROM, contact the Bureau's Information Centre (contact information is at the front of this report).

Frequently Asked Questions About the Immunity Program

In September 2000, the Bureau released Immunity Program Under the Competition Act, an information bulletin that outlines the policy on and procedures involved in granting immunity from prosecution for criminal offences under the Competition Act. Since that time, a number of questions have been raised about the application of the program in specific circumstances. The Bureau has posted answers to the most frequently asked of these questions on its Web site.

Speeches

In 2001-2002, Bureau staff delivered speeches on a wide range of topics, including Bill C-23 (now called An Act to Amend the Competition Act and the Competition Tribunal Act), the abuse of dominance provisions of the Competition Act, merger issues, competition policy, competition in the Canadian airline industry, cartels and on-line business. A selected list of speeches can be found on the Bureau's Web site.

Information and Warnings

The Bureau periodically issues news releases or information notices alerting the public to potentially illegal or misleading activities in the marketplace. It also issues guidelines to help consumers and businesses understand specific issues.

Questionable Invoices for Internet Directory Services

In May 2001, the Bureau warned businesses and non-profit organizations to take precautions before paying bills or invoices from the Internet directory YellowBusiness.ca, following the reappearance of questionable invoices sent to Canadian businesses and organizations for Internet directory services.

The invoices appeared to be a continuation of unsolicited mailings sent in 2000 by YellowBusinessPages.com and Yellow Business Directory.com to businesses and charities for listings in Internet directories. Criminal charges of making false or misleading representations were laid in November 2000, specifically because the mailings looked like invoices when they were in fact solicitations. Criminal charges were laid against YellowBusiness.ca in May 2001 for similar activities.

In July 2001, the Competition Bureau issued a warning to Canadian consumers and businesses to think carefully before paying apparent invoices from the Internet Registry of Canada for the registration or re-registration of their domain names. Complaints received by the Bureau indicated that the mailings from the Internet Registry of Canada implied that it was affiliated with the Government of Canada or had official status as an agency registering domain names in Canada. In fact, the Internet Registry of Canada is not associated with any government agency and has no official status to register domain names.

Draft Guidelines

Environmental Labelling and Advertising

In July 2001, the Bureau published a notice of consultation to seek public comments on its intention to adopt new guidelines on environmental labelling and advertising (green marketing). The Bureau is currently analyzing the submissions received, which are posted on the Bureau's Web site.

The Bureau will use the new guidelines when assessing environmental labelling and advertising claims under the Competition Act and the Consumer Packaging and Labelling Act.

The guidelines will help businesses ensure that their representations are not misleading and conform to the law. The guidelines will also benefit consumers, who will be able to make better informed decisions when shopping for products or services that make environmental claims on their packaging or in their advertising.

Abuse of Dominance in the Airline Industry

In February 2001, the Bureau released a draft version of Enforcement Guidelines on the Abuse of Dominance in the Airline Industry. The draft guidelines cover anti-competitive acts in the airline industry, as defined by legislation and regulations, including the following:

• operating or increasing capacity at fares below avoidable costs
• exclusionary conduct, such as pre-empting airport take-off and landing slots
• the use of essential facilities and services for anti-competitive purposes
• anti-competitive conduct involving frequent flyer programs
• travel commission overrides and corporate discount programs.

As part of the consultation process, which ran until May 2001, the Bureau received more than 25 submissions, which are posted on the Bureau's Web site. However, since the Commissioner has filed an application against Air Canada with the Competition Tribunal that raises a number of issues affecting the new airline legislation and regulations enacted in 2000 following the restructuring of the Canadian airline industry, the Bureau decided not to finalize the guidelines until after the Tribunal's decision. Once the Tribunal renders its decision, the Bureau will then consider what changes it should make to the proposed guidelines in light of the decision, comments from stakeholders and additional consultations.

Abuse of Dominance Provisions as Applied to the Retail Grocery Industry

In December 2001, the Bureau released a draft version of Enforcement Guidelines: The Abuse of Dominance Provisions (Sections 78 and 79 of the Competition Act) as Applied to the Retail Grocery Industry for public comment and consultation. These draft guidelines were issued to clarify the Bureau's approach to enforcing the abuse of dominance provisions in the Canadian grocery industry. Five interested parties and stakeholders submitted written comments. Following consultations with commentators, the Bureau will release a revised final version of the guidelines.

Illegal Trade Practices

In March 2002, the Bureau released a draft version of Enforcement Guidelines for Illegal Trade Practices: Unreasonably Low Pricing Policies for public comment and consultation. These draft guidelines were issued to update the Bureau's approach to investigating unreasonably low pricing policies in Canada. It is intended that, following consultations, these guidelines will replace the Predatory Pricing Enforcement Guidelines, first issued in 1992. Comments from interested parties were requested by June 2002.

Draft Guide on Internet Advertising

The Bureau has developed a draft guide to explain its approach to applying the Competition Act to on-line advertising. Entitled Staying "On-side" When Advertising On-line: A Guide to Compliance with the Competition Act When Advertising on the Internet, the guide is designed to help businesses make sure their on-line representations conform to the Competition Act. It is also intended to remind advertisers that the rules for business practices and advertising also apply to on-line promotional activities, and to clarify the responsibilities of people publishing representations on the Internet. On May 28, 2001, the Bureau asked industry stakeholders and other interested parties for their comments on the draft guide. The Bureau is currently analyzing the submissions received, which are posted on the Bureau's Web site.