Annual Report 1995/96 - Economics Issues/Bureau Activity on the International Scene/Compliance and Education Activities/Looking Ahead

Economics issues another Bureau focus

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Within the Bureau, economists of the Enforcement Economics Division provide advice and analysis regarding economic issues in a number of enforcement areas, including cases, interventions and enforcement policy. In total, Branch economists were involved in some 40 cases and regulatory interventions over the year. In one of these, Sugar Dumping, a Branch economist appeared as an expert witness for the Director.

Issues raised by network economics, particularly in respect of telecommunications, were an important area of research and policy development over the course of 1995/96. In particular, the Bureau hosted the Telecom and Antitrust Symposium in November 1995, which brought together leading antitrust, economic and telecommunications experts to reflect on competition policy and regulation. The discussions also stressed the importance of network economies and vertical integration issues for competition policy's application to the telecommunications sector.

Independent economic research continues to form an integral part of enforcement economics within the Bureau. Economists within the Bureau undertook research in a number of areas including the empirical analysis of past resale price maintenance cases, exclusive contracting, and horizontal concentration in the central Canadian cement industry.

Compliance and Education Activities are Bureau priorities

Our programs to encourage compliance with the Competition Act continue to be a key activity of the Bureau.

In October 1995, the Bureau published an Information Bulletin entitled Strategic Alliances Under the Competition Act. We undertook wide consultations in the preparation of a Bulletin on Corporate Compliance Programs which will be published during the next year.

We continue to emphasize the importance of compliance and education with a particular emphasis on our Public Education Initiative (PEI). The PEI program, in cooperation with several other agencies, issued a four-part video called "Scam Alert!" designed to help consumers and businesses protect themselves against fraudulent and deceptive activity conducted over the telephone and through the mail. The PEI program publishes a series of informative pamphlets on the Bureau, and on various aspects of its work. It also arranges for participation in trade shows, as well as seminars to business and consumer organizations.

The Director and other Bureau officials regularly address business and professional gatherings both in Canada and abroad, on various topics related to Canadian competition law and the Competition Bureau's activities.

Significant Bureau activity on the International scene

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Internationally, the growing number and complexity of cross-border cases, especially with the U.S., highlight the international dimensions of the Bureau's enforcement activities and underline the need for enhanced international cooperation, consultations, coordinated enforcement actions where appropriate, and conscious efforts at dispute avoidance. As part of regular bilateral consultations, the Director and Bureau officials met with the Assistant Attorney General, United States Department of Justice, Antitrust Division, and the Chairman of the Federal Trade Commission, twice during the year. The discussions focused on ways and means to enhance bilateral cooperation on enforcement matters within the framework of the Mutual Legal Assistance Treaty and the August 1995 Canada-US Agreement on the Application of their Competition and Deceptive Marketing Practices Laws.⁽¹⁾

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Bilateral meetings were also held during the year with the Directeur Général of France's Direction générale de la Concurrence, de la Consommation, et de la Répression des Fraudes (DGCCRF), the President and other officials of Mexico's Comisíon Federal de Competencia, the Director General and other senior officials of the UK's Office of Fair Trading, the head of the Directorate General IV in the European Union (responsible for competition policy in the European Union), and with competition officials from Japan, Venezuela and Chile. Discussions are continuing on developing a Canada-European Union competition accord on cooperation and coordination.

At the case level, there continued to be a significant number and complexity of notifications and requests for assistance and other interactions between the Bureau and foreign competition authorities. During the fiscal year, the Bureau received 23 notifications from foreign competition authorities and sent 9 notifications to foreign authorities or governments under the Canada-US Agreement and the Revised OECD Recommendation. The majority of the notifications were with the United States.

Multilaterally, the Bureau continued to participate actively in the work of the OECD's Competition Law and Policy and Trade Committees, focussing on the interrelationship between trade and competition policies, on competition and regulation and on international cooperation. As well, it participated actively in the Intergovernmental Group of Experts on competition policy of the United Nations Conference on Trade and Development (UNCTAD).

The Bureau has also been providing technical assistance for many years, both bilaterally and in support of UNCTAD and OECD multilateral programs. During the past year, technical assistance was provided to Venezuela, Vietnam, China, Malaysia, Ukraine, Lithuania, Latvia, and Estonia.

1. More detail on this Agreement can be found in CompAct Issue 3.

Looking Ahead

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Following the completion in March 1996, of the Report by the Consultative Panel on Amendments to the Competition Act, we anticipate that further consultations with stakeholder groups will be undertaken to discuss a number of issues it raises. Recommendations will then be provided to the Minister who may decide to introduce legislation in the House of Commons leading to an amended Competition Act.

The Bureau is becoming increasingly concerned by the fraudulent and deceptive use of telemarketing, which deprives legitimate companies of the use of an effective marketing tool. The growth in electronic commerce on the Internet also opens a vast new arena for less ethical marketers.

The globalization of business activity, advances in technology, and greater potential for international deceptive marketing practices, means that cooperative international approaches to enforcement become increasingly necessary. Our close cooperation with the U.S. authorities following the signing of the August 1995 agreement will continue as we jointly deal with these issues.

For the Bureau, there will be a continuing challenge to maintain an effective presence in all areas of the Director's mandate. This will take place in an environment of ever tightening resources. We are actively pursuing the implementation of cost recovery for some of our services, such as pre merger notification filings.

The trend towards increased deregulation in sectors such as Telecommunications, Energy and Finance shows every indication of continuing, and indeed accelerating.

Thus, the Bureau's active program of compliance initiatives will continue to play a key role: the Public Education Initiative will reach out to the small business community with its information programs; our quarterly publication of Bureau news, called CompAct, will enhance the transparency of our operations; and, we are preparing a bulletin setting out the Bureau's views on the essential elements that should be part of corporate programs designed to ensure compliance with the Competition Act.

Note:

The Director of Investigation and Research, George N. Addy, resigned from the Canadian Public Service effective June 30, 1996. Until his successor was named on January 29, 1997, Francine Matte occupied the post on an acting basis.