Annual Report 1997/98 - Proposed Amendments Seek to Modernize Canada's Competition Legal Framework

Bill C-20, an Act to amend the Competition Act and to make consequential and related amendments to other Acts, received second reading on March 17, 1998, and was referred for study to the Standing Committee on Industry. On March 30, the committee held its first hearing and invited both the Honourable John Manley, Minister of Industry, and the Competition Bureau to appear. The Committee called numerous witnesses later, including members of the Canadian Bar Association, academics, and representatives from across Canada of national seniors' groups, telemarketing associations, consumer organizations and the business community. The bill drew a large base of support for modernizing the law on an incremental basis and in a timely fashion.

Once enacted, the amendments will deal with the growing problem of deceptive telemarketing by defining it as a new crime. They will: allow law enforcement officials to use judicially authorized interception of private communications without consent (wiretap) to gather tangible evidence in cases of deceptive telemarketing as well as bid-rigging and conspiracy to fix prices or allocate or share markets; improve the process for resolving misleading advertising and deceptive marketing practices; revise and clarify the law on price claims at the retail level; and improve the administration of the merger prenotification process and related regulations.

In tabling these amendments, the Bureau sought to modernize Canada's competition law framework and to update its investigative and enforcement tools. These updated tools should prove more effective within the conformity continuum approach adopted by the Competition Bureau.

Should these amendments receive Royal Assent and come into force, Canada will have a competition framework legislation that can respond quickly and efficiently to the rapidly changing face of Canadian and other world economies.

Specifically, in the area of deceptive telemarketing, the amendments will:

• create a new criminal offence in a situation where illicit interactive telephone communications are used for promoting the supply of a product or a business interest;
• require telemarketers to disclose certain information during telephone calls with consumers;
• prohibit deceptive practices such as demanding payment prior to the delivery of products that are offered at prices grossly in excess of their market value;
• expand the responsibility of corporations and their officers and directors for ensuring compliance with the law; and
• make it easier for the courts to issue interim injunctions to stop operations of suspected fraudulent telemarketers.

In dealing with misleading advertising and deceptive marketing practices, the amendments seek to remedy the concern that criminal sanctions are an effective method of reducing the incidence of these offences. The proposed addition of a civil option will change the focus from punishment to quick and efficient conformity with the law. However, a criminal sanction will remain in place to deal with serious misleading advertising cases.

The amendments improve the merger prenotification law. Among other things, the new provisions give the Director more flexibility to shorten waiting periods for the completion of merger transactions, and afford easier access to interim orders from the Competition Tribunal. The provisions also provide for authority to define the information requirements on prenotification by way of regulation.

A comprehensive information package issued at the time of tabling, including the speeches that were delivered before the Parliamentary Committee by the Minister and the Director, is available on the Bureau's Web site or by calling the Information Centre toll free at: 1-800-348-5358.