Remarks by Melanie L. Aitken, Commissioner of Competition

Keynote Speech at the Canadian Bar Association 2011 Fall Conference

Hilton Lac-Leamy, Quebec

October 6, 2011

(Check against delivery)


Introduction

Good afternoon, and thank you for inviting me to participate today. Although I regret that I can't be with you in person, I am sure that, as always, this year's Annual Fall Competition Law Conference will be an engaging and informative event.

In my remarks today, I would like to outline my current priorities, and highlight some of our recent enforcement activity.

Priorities

When I began my term as Commissioner, I outlined three priorities, about which I have spoken to this audience on a number of occasions. Those three priorities are naturally evolving as we move forward, but can be summed up to a large extent by: "we must stay the course".

We have done a significant amount of work to smoothly and successfully implement the 2009 amendments to the Competition Act by talking to you, our stakeholders, realigning our processes, and developing and revising our guidance documents.

At the same time, to support our renewed enforcement work, we have been building our internal capacity by ensuring that we focus our efforts, allocate our resources according to our priorities, and attract new additions to our strong team with the skills and experience we need.

None of this work will stop — it is a process, one with momentum — but we are now moving into the next phase as we continue to put that work into practice through the consistent, responsible enforcement of the Act.

Accordingly, our priorities reflect, and are informed by, our ongoing and principal commitment to enforcement. They are:

  • first, continuing to achieve results for Canadians through active, targeted and principled enforcement;
  • second, applying our competition laws in a progressive and transparent way that keeps pace with a changing marketplace; and
  • third, cultivating our strong and agile enforcement capacity to deliver results that matter.

I believe that through both our words and our actions to date, our message is being heard: we, at the Bureau, will not hesitate to act to promote competition in the Canadian marketplace. We will hold to account companies that take advantage of Canadians.

In the last 2 years, we have brought forward a number of important cases and demonstrated that, where there is a clear violation of the law, we will not hesitate to use the tools available to us to investigate and prosecute the offenders. To my mind, a consistent, principled enforcement strategy is the best deterrent of all — bar none.

We are very pleased, owing to the amendments of this government, that we are now operating under a coherent framework, and can move forward to seek the certainty that comes from Court and Tribunal decisions.

Our successes to this point, of which I am very proud, would not have been possible without the dedication and professionalism of the staff at the Bureau.

I am also grateful to you at the Bar for your contributions and cooperation. I am very pleased that our organizations have worked together constructively and collegially, and I hope that we can maintain that relationship moving forward.

The work being done at the Bureau, which I will now talk a little about, flows from our three priorities, and from my overarching goal to ensure, to the greatest extent we can, transparency, certainty and predictability for our stakeholders.


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Mergers

A word about our Merger work.

Consistent with this goal, our Mergers Branch has issued a number of new guidance materials this year, including most recently an interpretation guideline on waiting periods for hostile transactions, and guidance on "no action" letters in merger reviews.

We have also consulted widely on revisions to the Merger Enforcement Guidelines (the MEGs) to reflect our current practice, and I am pleased to announce the publication of the revised MEGs this week.

As you know, Paul Collins will be speaking in more detail about the changes to the MEGs during tomorrow afternoon's session.

We are also working to revise the Remedies Bulletin and consent agreement template, informed by the conclusions of our Merger Remedies Study and our experience over the past couple of years in developing consent agreements that have implemented the robust remedies we have been securing, and done so, increasingly effectively.

In addition, we are making changes to the Merger Review Process Guidelines based on our experience with the two–stage merger review process over the past two and a half years.

In the Mergers area, as elsewhere, we will continue to assess our guidelines to ensure that they are as constructive and practical as possible, and reflect our actual practice.

Among other initiatives, I am pleased to announce that, following the recommendations of an internal working group on transparency, we intend to publish more position statements that describe the Bureau's analysis of complex merger cases, and to establish a merger register — a list of all closed merger reviews, updated on a monthly basis.

In practice, our Mergers Branch has been quite busy, both in terms of the number of filings, and the size and complexity of transactions. Since the amendments came into force, we have issued thirteen supplementary information requests and finalised ten consent agreements. There have been 104 filings so far this fiscal year, which is on par with the number of filings received at this time last year.

As for our enforcement approach, we are determined to take action as required with respect to mergers that will have a significant anti–competitive effect, regardless of their size.

To that end, we are proactively monitoring closed and non–notifiable transactions, and recently challenged our first transaction since 2005, a completed merger in the hazardous waste industry in British Columbia.

In June, we applied to the Tribunal to block a joint venture between Air Canada and United Continental. We concluded that, if allowed, the proposed joint venture would monopolize ten important routes between Canada and the United States, and substantially reduce competition on an additional nine routes, leading to increased prices and reduced consumer choice on key transborder routes of enormous importance to Canadian consumers and business travellers.

We are also challenging three existing "coordination agreements" between those airlines, our first challenge under the new civil competitor collaboration provision, section 90.1. These agreements, which were in place prior to the announcement of the joint venture, but not fully implemented, allow Air Canada and United Continental to coordinate key aspects of competition including joint pricing and scheduling, as well as revenue sharing. If Air Canada and United Continental pursued these agreement terms, as with the Joint Venture, the North American operations of the airlines would effectively be merged, to the significant detriment of Canadian travellers.

Civil

Turning to our work in the conduct area.

We have brought forward a number of important cases in our Civil Matters Branch this past year, including those against the Canadian Real Estate Association, the Toronto Real Estate Board, and Visa and MasterCard.

As you are maybe aware, the Bureau reached an agreement with the Canadian Real Estate Association late last year that fully addressed our concerns, and we are seeing positive change in the market for real estate services.

This remedy has really made a difference for Canadians, and in a very important transaction in their lives. I am very proud of what we achieved in this case.

In December 2010, the Bureau filed an application with the Competition Tribunal under the price maintenance provisions of the Act, challenging the restrictive rules that Visa and MasterCard impose on merchants who accept their credit cards.

We initiated our investigation in response to concerns raised by merchants and their associations regarding substantial increases in the fees that merchants pay for credit card acceptance. The case is now before the Tribunal, with the hearing scheduled to begin in April 2012.

Last May, we filed an application against the Toronto Real Estate Board (TREB), seeking to prohibit restrictions placed on realtors that dictate how they distribute MLS information to their clients.

Under these rules, real estate agents can share important MLS data with their clients, but only if they do so by hand, fax, or e–mail — they are prevented from sharing the very same information over the internet through password–protected websites, also known as Virtual Office Websites.

These restrictions are denying consumer choice and the ability of real estate agents to introduce innovative real estate brokerage services through the internet.

Ultimately, and unfortunately, we felt it necessary to seek a legally binding order from the Tribunal to ensure greater competition and increased innovation in the market for real estate services in Toronto.

This is perhaps an appropriate place to note that, while we always have a strong preference for consensual resolutions, when parties resist effective remedies, we are left with no option but to seek compulsory relief from the courts or the Tribunal. This commitment to see matters through has already had a positive effect.

Parties are increasingly working with us cooperatively to resolve concerns effectively and in an expeditious way — a very welcome outcome and hugely positive for all of us.


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Criminal

In our Criminal work, we continue to concentrate on the, admittedly, lengthy process of 'changing the game'— reorienting our approach at the Bureau, our processes, and our mindset to a more appropriately aggressive stance to respond, as we must, to our new more powerful criminal provisions.

As we move forward with our new criminal regime, consistency, consistency, and consistency is our focus.

There will be no arbitrary relaxing of standards under the Bureau's watch — a practice that can only impair predictability and fairness in enforcement. Further, we will use our investigative tools such as searches, wiretaps and section 11 orders.

Cartels and bid–rigging continue to be our focus, given the seriousness of this conduct, and its unambiguously harmful nature. We are committed to advancing cases that matter to Canadians, doing so in a timely manner, and following them through to the end.

For cartels, while it will necessarily take some time before we bring our first case under the new section 45, we do have a number of 'hybrid' cases underway that will give us experience with the new provisions.

Unfortunately, large global cartel cases continue to be common, and we maintain close working relationships with key partners, so that we can take coordinated action to effectively combat these pernicious cartels.

In both cartel and bid–rigging cases, we will be appropriately aggressive when dealing with individuals. To date, 38 individuals have been charged in the Quebec Octane case, and last December, five individuals were accused of rigging bids for private sector contracts in residential highrise buildings in the Montreal area.

Our commitment to a consistent approach will also extend to our dealings with cooperating parties. Our goal is to move our investigations along in a timely way and, to that end, we will insist that all leniency applicants engage in settlement negotiations very shortly after applying for leniency.

Whatever may have been your experience in the past, this is under the Bureau's control, and we do intend to require compliance with our clearly stated policy. No one has a right to retain the leniency privilege without delivering on their end of the bargain.

We are encouraged that our colleagues at the PPSC increasingly understand how critical this dogged commitment is to consistency for effecting change in our criminal programme, and the effectiveness of the laws we are responsible to enforce.

The Immunity and Leniency Bulletins specify that information must be proffered within 30 days to qualify for immunity or a fine reduction. We have begun to revoke markers where there has not been a sufficient proffer of information within that specified time. To be very clear, we expect, and will require, cooperating parties to fulfill their obligations in a timely way.

Fair Business Practices

Moving then to talk about our Fair Business work. Misleading representations continue to be an area of concern for the Bureau, as consumers need accurate information in order to make informed choices. It's very simple — don't mislead the public by hiding charges or conditions in fine print, or by making claims you can't back up.

In such cases, where appropriate, we are also seeking restitution for consumers, as we are in the Rogers Chatr and Nivea cases. We want tangible results for Canadians.

Most recently, in June, we signed a consent agreement with Bell Canada under which Bell agreed to stop making misleading representations about the prices offered for its services.

We had determined that, since December 2007, Bell had charged higher prices than advertised for many of its services, including home phone, Internet, satellite TV and wireless.

Under the terms of that consent agreement, which Bell entered into to its credit with no need for the Bureau to commence litigation, Bell also agreed to pay an administrative monetary penalty of $10 million dollars, the maximum amount allowed under the Act, and Bell agreed to modify all of its non–compliant advertising within 60 days.

It's pretty easy: when a price is offered to consumers, it better be accurate. Including a fine–print disclaimer is no licence to advertise prices that are not available.

It is important for you to know that we are investigating several industries where we are concerned that Canadians have been taken advantage of, in this or related ways.

All I can say at this point is: stay tuned.

I should also note that we are also taking firm steps to communicate the seriousness with which we expect parties to view consent resolutions. We will not allow messages to the public to be diluted or compromised.

For example, in September, we reached a consent agreement with Beiersdorf, the maker of Nivea products, over what the Bureau concluded were false or misleading performance claims.

Following the settlement, the company asserted in the media and on its own website — directly contrary to our conclusions — that its performance claims were based on independent research and complied with Canadian requirements and guidelines.

These assertions were not in accordance with the consent agreement, as Beiersdorf had agreed that it did not contest the Bureau's conclusions. After being advised by the Bureau that it was required to adhere to the letter and spirit of the commitments it made, Beiersdorf complied, and removed the offending statement from its website.

As in this case, we will continue to be vigilant in monitoring consent agreements, and should a violation of one occur, we will not hesitate to take further enforcement action as warranted. Indeed, we have a contempt proceeding in the works right now, with respect to another consent agreement and have even searched the non–compliant party in that proceeding.

Unfortunately, misrepresentations, and in particular, fraudulent misrepresentations, continue to ensnare consumers, and new technology is only making it easier for perpetrators to export scams to other countries. To that end, international cooperation is very important in enforcement, and there are huge benefits to piling on enforcement action in multiple jurisdictions at the same time. We are working closely with our committed colleagues at the ACCC, in the U.K. and at the FTC.

We recently coordinated to shut down a business directory scam that has targeted thousands of businesses in Canada and other jurisdictions.


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Building Capacity

Finally, back to the home front to the Bureau itself and how we are adjusting ourselves to meet the enforcement commitment, we are attracting top talent to our Senior Management with a variety of backgrounds to add to our already strong team.

Over the last year, we have attracted a number of talented individuals from other federal departments and central agencies, strengthening our links with the rest of government, as well we have attracted folks from the private sector, with prosecutorial, defence, and business experience.

Many of you know Vicky Eatrides from her previous work at the Bureau. Those who know her will understand why she is perfect for a recently created Deputy Commissioner position in the Commissioner's Office.

The Deputy Commissioner is my primary liaison with Bureau managers, Industry Canada, the Bar, the business community, and other antitrust authorities, and deals with many of the daily issues that arise in the Bureau.

Pierre Leduc joined the Bureau as Deputy Commissioner of the Public Affairs Branch in March. He comes to us with nearly two decades of experience in strategic communications planning, and media relations in both the private and public sectors, including as Press Secretary in the Ontario Premier's Office.

Jeanne Pratt has taken on a new and permanent role as Assistant Deputy Commissioner of the Criminal Matters Branch. Jeanne was my Special Legal Advisor on loan from McCarthy's and has worked on a variety of complex and high profile matters since joining us at the Bureau.

And, just last month, David Wingfield joined the Bureau as Executive Director of Competition Bureau Legal Services and Senior General Counsel.

David is a highly experienced litigator who brings enormous energy, expertise, and court sense to the Bureau.

David has been named one of Canada's leading cross border and corporate commercial and securities law litigators and practises internationally in association with Fountain Court chambers, the leading London commercial set. A partner at WeirFoulds, David joins us through the Interchange Canada Program for a two–year assignment.

We are very fortunate to have him join us, as he is improving our internal support capacity in this area, essential of course for a law enforcement agency.

In addition, we have further enhanced our litigation capacity with new hires from the private sector including Nicholas Cartel and Tara DiBenedetto, who both joined the Competition Bureau Legal Services in August.

Conclusion

At this point, I will just say: Technology is terrific and I am certainly glad to be able to report and share my reflections with you today in some manner. But I won't test your eyes and patience further.

The message I would like to leave you with is as follows: as I've stated many times, my aspiration from day one has been that legitimate businesses will know what is and is not acceptable conduct, and those considering anti–competitive activity will know that there are consequences for crossing those lines.

Significantly, Canadians will know that we are prepared to act.

This renewed focus of ours on enforcement — what I consider the essence of our mandate — has obvious benefits. Through our principled, direct and clear approach, we intend to continue to effect compelling positive change on the Canadian economy — more important than ever, given today's economic challenges.

I am very proud of what the Bureau has accomplished so far. However, by no means can we let up now. The success of this approach very much depends on dedication and consistency.

I'm sorry I couldn't be there in person with you today to answer your questions, but I do look forward to seeing you in the coming weeks and months. Thank you for your attention and I hope you enjoy the rest of the conference.

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