Evidence of meeting #44 for Industry, Science and Technology in the 40th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was bureau.
A recording is available from Parliament.
4:15 p.m.
Deputy Commissioner of Competition, Civil Matters Branch, Competition Bureau
We're totally at arm's length. In fact, they're totally independent of us.
4:15 p.m.
Conservative
Mike Wallace Conservative Burlington, ON
Secondly, you are, for lack of a better word, a witness or a contributor to the Competition Tribunal's review of the situation. You could rule that it's bad for competition that they get their consent order, but it doesn't stop them from applying and still trying to get it. Is that correct?
4:15 p.m.
Deputy Commissioner of Competition, Civil Matters Branch, Competition Bureau
That's absolutely correct. Anybody can apply to the Competition Tribunal during the hearing to make their views known—the CFIB, the Retail Council of Canada, or any other party. The test is whether they are affected or likely to be affected by a change.
4:15 p.m.
Conservative
Mike Wallace Conservative Burlington, ON
I just don't know the history of it, to be perfectly honest, but have you as a bureau taken a position on any other Competition Tribunal application where you were opposite to what the application was and have lost?
4:15 p.m.
Deputy Commissioner of Competition, Civil Matters Branch, Competition Bureau
Yes, we have. We've also won some. It's hard to say whether we've won more than we've lost. I don't have those numbers.
4:15 p.m.
Conservative
Mike Wallace Conservative Burlington, ON
Okay, but it's a process that happens; it's ongoing. I appreciate that.
Do I understand from your submission that there are two reviews going on, one on the credit side and one on the debit side? Are you able to actually separate them out? I know there's the issue of merchant fees on the one, but are we concerned that what they can do on one side will affect whether they're able to be in the debit market and vice versa?
Can you answer that question for me?
4:15 p.m.
Deputy Commissioner of Competition, Civil Matters Branch, Competition Bureau
Yes, there are two inquiries. This is something I have to say. It's under subsection 10(3) of the act. It's really important that you understand this, because we don't want to appear to be obfuscating, but section 29 and subsection 10(3) prevent us from disclosing anything when we're on inquiry. It's obvious why we wouldn't want to do that, but it is worth reiterating so you don't think I'm ducking all your questions. We don't want to let people know what we're up to, because we don't want the other side to know who we're talking to, etc.
To get back to your question, Mr. Chairman, they are two separate inquiries. They are quite different, but there is the possibility of this crosswalk, and that would be a third examination, if it happened.
4:20 p.m.
Conservative
Mike Wallace Conservative Burlington, ON
It has been mentioned by our friends across the way about maybe having you back later, but let's use, for argument sake.... I'll use my own example.
Let's say I'm in favour of Interac getting the opportunity to compete in the marketplace and lose their not-for-profit status and be able to compete. Let's say your study agrees and it goes to consent, and they get it; I don't think we need to see you again. But if it doesn't, is all that information you have gleaned in your study made public? Can we have you back and talk to you about why you decided those things? I want to know how much is public and how much we can debate.
4:20 p.m.
Deputy Commissioner of Competition, Civil Matters Branch, Competition Bureau
Mr. Chairman, I think the question is, if we oppose, how much of our material would be public? If we oppose and the tribunal goes to a hearing, all of it will be public except what the tribunal deems is commercially sensitive information, which will be expunged from the record by the court in the public transcript.
4:20 p.m.
Conservative
4:20 p.m.
Deputy Commissioner of Competition, Civil Matters Branch, Competition Bureau
They have not applied yet, so we don't know.
4:20 p.m.
Conservative
Mike Wallace Conservative Burlington, ON
So we really couldn't see you and ask you why you're opposed until the tribunal is set, until that evidence is public. Is that correct?
4:20 p.m.
Deputy Commissioner of Competition, Civil Matters Branch, Competition Bureau
Yes. If we did oppose it, I think we'd have great difficulty in providing other than some general comments, because we would want to be able to go to the tribunal with our case and the other side not knowing what our case is. If we signalled to them what our experts say, what our data and our econometrics and our analysis show, they could.... There is a process to disclose that evidence before the court in a certain timed fashion. You have to show your case, but how much of that gets published is up to the tribunal.
To answer your question, likely a lot of it would be made public. Some of it wouldn't, because I'm certain there'd be some very sensitive commercial data we would have that they would not want to share.
4:20 p.m.
Conservative
Mike Wallace Conservative Burlington, ON
I have one final really quick question, in terms of timing. Regarding the two investigations that you're doing, do you expect them to be completed at approximately the same time?
4:20 p.m.
Deputy Commissioner of Competition, Civil Matters Branch, Competition Bureau
No. The Interac one will be in the coming weeks. A decision will be made. As to the credit cards, I think I said that in the coming weeks we'll decide on a course of action.
4:20 p.m.
Conservative
The Chair Conservative Michael Chong
Thank you very much.
To clarify, there are two inquiries going on. One is with respect to Interac's wish to convert to a for-profit entity is more of a negotiation that has gone on about what they want to do and more of a situation where the bureau is going to come up with a position on a hypothetical situation if they were to convert, whereas the other inquiry is an actual investigation of whether or not there are anti-competitive behaviours going on in the credit card market.
4:20 p.m.
Deputy Commissioner of Competition, Civil Matters Branch, Competition Bureau
Yes, Mr. Chairman, I think that's correct.
To add one thing, I think the Interac one is more about what will be the effects of changing the order and whether it will cause the order to be ineffective and lead to a concern on lessening of competition. So the order has worked; it has been in place and has worked effectively. We don't take these matters lightly and we don't change orders. In fact, we don't change orders, the courts do. A court order is a court order. If you violate it, then there's a section of the act that makes it a criminal offence. So the order has to be taken seriously. We have to do our work. We have to get into the facts. We have to know what we're doing. We cannot be swayed because there has been a bunch of things said in the press. We have to do our homework and get it right.
November 18th, 2009 / 4:25 p.m.
Bloc
Robert Vincent Bloc Shefford, QC
Thank you, Mr. Chairman.
I carefully listened to your speeches. Something surprises me. Your brief states that the rate is 1.9% in the United States. Let's suppose that all cards, MasterCard, Visa and debit cards, have the same 1.9% rate and that one year later there is a 2.5% increase for all three, and I call you to say that all three have taken advantage of their dominant position to increase their rates at the same time. According to the Competition Bureau, there must be a certain degree of competition, which means that they're playing with rates. However, if the rates are always equal, there's no competition.
In that kind of case, who am I to turn to? Who am I to talk to for there to be an investigation at the Competition Bureau so that there isn't always a systematic increase or a systematic decrease? What do I have to do to trigger an investigation?
4:25 p.m.
Deputy Commissioner of Competition, Civil Matters Branch, Competition Bureau
You can call me at (819) 997-2209.
4:25 p.m.
Bloc
Robert Vincent Bloc Shefford, QC
I like your answer, Mr. Taylor, because I did it in the case of gasoline. I telephoned the Competition Bureau to request an investigation. In response, I was asked whether I had any convincing, significant evidence so that the bureau could conduct an investigation. No. If I had significant evidence, I wouldn't go to the Competition Bureau. I would go to the police station, sir.
So I would like to know what actual power you have at the Competition Bureau to trigger an investigation. Do you need something decisive or can you simply conduct an investigation into a complaint?
In my riding, I asked about 10 constituents to phone the Competition Bureau to ask it to conduct an investigation into gasoline prices. However, the answers that I received from my constituents in response to those calls were that the bureau couldn't conduct an investigation because there wasn't any evidence.
Could you tell me how we can trigger an investigation if we don't have any evidence? As citizens, we think it's up to the Competition Bureau to conduct those investigations, not to us.
4:25 p.m.
Deputy Commissioner of Competition, Civil Matters Branch, Competition Bureau
We conduct investigations all the time and we examine all complaints. However, under section 10 of the Competition Act, we have to have reasons to believe that, for example, prices are the same for gasoline.
In the area of gasoline, we're talking about an identical product. So if prices are the same in a market, that's not enough to allow us to get an authorization to conduct a search. However, in cases in which we have investigated, we have found testimony confirming that prices were the same and that price increases had been caused by a conspiracy.
4:25 p.m.
Conservative
The Chair Conservative Michael Chong
Thank you, Mr. Vincent.
Thank you very much, Mr. Taylor and Madame Dagenais, for your testimony today. We'll eagerly await the actions you'll take, both with respect to Interac and with credit cards in the next number of weeks. We thank you for taking the time to come in front of us today.
This meeting is adjourned.