Competition Bureau releases recommendations for changes to law

The Competition Bureau Wednesday released its recommendations regarding changes to Canada’s competition law. The voluminous filing is in response to government initiatives seeking to overhaul the Competition Act. There are 50 suggestions scattered throughout the document. The Bureau is concerned about gaps in merger notification rules “Section 2.7 of the Bureau’s 2022 Submission cites evidence that nearly half of the top 30 Canadian public merger transactions by deal size over the past five years were not subject to pre-merger notification in Canada, and that only five acquisitions made by the largest tech firms—Google, Apple, Amazon, Facebook and Microsoft—were notified under the Act over the past decade,” the paper states. “The submission goes on to make a number of recommendations for strengthening the notification rules under the Act.” The agency wants sales into Canada to be considered when assessing mergers. At present, only sales in or from the country are considered. Pre-notification rules should be strengthened to better capture mergers of interests. Parties should be required to file transaction-sized data in their merger applications, the bureau said. The revised Act should mandate sworn testimony in supplementary information requests (SIR). This would be an expansion of the powers currently allotted to the bureau. A changed Act should clearly define the phrase “significant interest” when mergers are proposed, the agency put forth. Mergers should likewise be subject to a longer limitation period. The bureau suggests a three-year term would be appropriate. Standards should be reworked in situations where the bureau is seeking an injunction. “The Act should provide more workable standards to temporarily pause the completion of a merger pending the outcome of proceedings before the Tribunal,” the paper recommends. When it comes to the significant lessening or prevention of competition (SLPC), the bureau wants to shift the burden to the applicants to show why a merger would not lessen or prevent competition. Standards for assessing SLPC should focus on the harm being done to the competitive process. The filing recommends the Commissioner of Competition have sufficient time and information to assess merger remedy proposals before their closing. Again, the parties themselves should bear the brunt of proving the effectiveness of the merger. The efficiencies defence, one of the factors in the current Rogers Communications Inc.-Shaw Communications Inc. takeover, should be repealed, the document states. The defence is no longer supportable, the Bureau believes, and leads to anti-competitive harm in the marketplace. The recommendation echoes previous recommendations the bureau has made on reform of the Competition Act. Speaking before the House of Commons Industry committee in the weeks after the announcement of Rogers' and Shaw's plans to merge, Boswell told MPs that the efficiencies defense is "controversial both inside and outside of Canada." "Certainly from the perspective of the person who administers and enforces the act, I think it would be worthwhile in this country to discuss this particular section of the act, and that’s for parliamentarians,” Boswell said at the time. The test for abuse of dominance should be simplified, the agency maintains. Changing it would put the Canadian law into harmony with regulations in other jurisdictions. Assessment of competitive harm should concentrate on the competitive process. The application also calls for the streamlining of the process for obtaining interim relief. The duration of interim orders should be extended, it adds. The Commissioner should be allowed to apply for any sort of relief simultaneously through different avenues. “The remedies provided for competitor collaborations are insufficient,” the filing notes. “Prescriptive remedies aimed at restoring competition and administrative monetary penalties should be available in appropriate cases.” The paper also wants an overhaul of the investigation into deceptive marketing practices. Advertisers should bear the burden of proof rather than the investigators, the bureau believes. There should be greater flexibility in the investigation of deceptive marketing. There should also be a wider range of remedies to fix the situation, the document maintains. The courts should prohibit deceptive advertising campaigns while the Bureau is investigating, it states. The courts’ powers to seize assets should also be expanded. The paper similarly wants changes to the provisions under Canada’s Anti-Spam Legislation (CASL). Remedies for false advertising using electronic means should be expanded. The Act’s civil and criminal CASL provisions should be harmonized. The study concludes with a section on administration and enforcement. Among the recommendations are the streamlining of civil information gathering powers, barring targets of investigations from examinations, and changing the solicitor-client privilege provisions. Corporations facing criminal charges should face trial by jury to avoid bifurcation, the report says. –Reporting by Paul Park at ppark@thewirereport.ca and editing by Michael Lee-Murphy at mleemurphy@thewirereport.ca

Competition Bureau releases recommendations for changes to law

News | March 15, 2023

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Competition Bureau releases recommendations for changes to law

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