Industry Committee on Oct. 31st, 2017

[Mary Ng, Liberal, Markham—Thornhill, ON]

Thank you.

On the private right of action, I'm hoping you can give us some advice. Given your testimony and the experience that the Competition Bureau has around penalties, what I would love to hear about...because we heard from other witnesses that at present what they're worried about, I suppose, is that there's no scalability. A penalty is a penalty, and therefore there's no scalability based on the type of offence.

In your opinion and in your experience, if we're looking at the PRA, does it make sense to have a sliding scale of penalties commensurate with the type of offence? For malicious phishing—terrible—it would be high, with a scale for others. How might we look at that?

[Josephine Palumbo]

On the private right of action, obviously we take the law as it is given to us. The law hasn't come into force. I know there has been a pause on the implementation of this legislation. We have some experience in this area, because private right of action provisions were introduced in the Competition Act in 2002. We know there have been 25 private right of action lawsuits filed with the Competition Tribunal, eight of which have been certified, but to the best of my knowledge, the commissioner has never intervened in any of those private right of action processes.

The current CASL private right of action very much mirrors this process. All I can speak to is the experience we have. The commissioner hasn't intervened. The commissioner would intervene only in exceptional circumstances. We would assess on a case-by-case basis whether to intervene. A number of factors would be considered, including the public interest, whether it's in the public interest for the commissioner to intervene, and the significant competition issues that might come into play. Our experience really falls within the confines of the private right of action in the Competition Act.

[Mary Ng, Liberal, Markham—Thornhill, ON]

So you think that private right of action, in that the tool is there, has been effective at prevention, deterrence?

[Josephine Palumbo]

It has given the opportunity for private litigants to seek redress with respect to certain offences. Our involvement, though, has been minimal; we haven't intervened in any cases. Again, we're looking at competition issues that go beyond the immediate parties that are affected, a wider geographic scope. We're looking at significant issues that could impact the consumer, businesses—

[Mary Ng, Liberal, Markham—Thornhill, ON]

I'm sorry to interrupt you, but just on the sliding scale piece, enforcement commensurate with the type of a potential offence, I'm looking for your perspective. Not around the private right of action, but if you had that kind of sliding scale, would that be effective in the other civil enforcement, as a example?

[The Chair, Liberal, Dan Ruimy]

Very briefly.

[Josephine Palumbo]

As a law enforcement agency, we assess the facts that are brought before us in an investigation. We assess and determine whether or not the law applies, to what extent the law applies, and the appropriate remedies. It's hard to deal in hypotheticals without the facts.

[The Chair, Liberal, Dan Ruimy]

Thank you.

We are mindful of the time. For the next four sets of questions, we'll go for three minutes each.

Mr. Jeneroux, you have three minutes.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

Let the record state my visible and vehement opposition to this muzzling of three minutes for the opposition.

[Voices]

Oh, oh!

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

A misuse of power, Chair.

I've now used up a minute.

On page 7 of your presentation, you talk about the complaints initiated by a number of potential sources, “consumers, businesses, industry associations, the media and stakeholders”. Do you have a percentage breakdown of where those are predominantly coming from?

[Josephine Palumbo]

Again, our work is guided by section 29 of the Competition Act, the confidentiality provisions of the act. Any information we receive, whether it's from the targets of an investigation or a business or any sources of information to a third party, we protect that information, whether it's given to us through compulsion or through compulsory orders or a voluntary process. The only two instances where we would share that information is where we're sharing with another Canadian law enforcement agency or where we're in the administration of the enforcement of the act—for example, if we're filing an application before a court.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

Could you provide even a percentage breakdown?

[Josephine Palumbo]

It'll be difficult for us to go granular in terms of our sources of information. We're an independent law enforcement agency. We have investigative tools we need to use, and individuals and enterprises that come before us expect that we will vigorously protect the information they provide to us.

[Morgan Currie]

Sometimes there are multiple sources, and we also develop our own intelligence. We receive intelligence on fraud, for example, from the Canadian Anti-Fraud Centre. We are part of the joint management team of that organization. Sometimes this information and other sources of intelligence can corroborate other multiple and varying sources provided us.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

Would you say there's a link between the anti-competitive marketing and the circulation of malware through electronic messages?

[Josephine Palumbo]

Malware doesn't fall within our mandate, quite frankly. There are areas where the conduct can overlap, but again we would be looking at it within the confines of false or misleading representations in the material aspect as outlined within our Competition Act.

[Morgan Currie]

Sometimes the lines are blurry between the types of complaints we might see in conjunction with our delivery partners at the CRTC and OPC. For example, there might be a false or misleading representation in the body of the message or in the locator or sender information in a message that's used to distribute malware or, for example, to obtain consent to obtain private information from an individual where we'd be concerned about the representation being made to obtain that consent.

[The Chair, Liberal, Dan Ruimy]

Thank you.

Mr. Sheehan, you have three minutes.

[Terry Sheehan, Liberal, Sault Ste. Marie, ON]

We have heard various testimony about social media and about other forms of communication, such as text messaging. The anti-spam legislation is pretty technology-neutral in its concept. For the record, because we've heard different opinions, does the law apply not only to promotional emails but to text messages, instant messages, or posts on social media?

[Morgan Currie]

Yes, ours does. False and misleading representation by any means will be pursued by us under these provisions.

[Terry Sheehan, Liberal, Sault Ste. Marie, ON]

Thank you very much.

How is commercial activity in CASL different from the business interest in the Competition Act?

[Josephine Palumbo]

The Competition Act talks about promoting a product or a business interest. The test that we apply is that which is “false or misleading in a material respect”. In terms of “material respect”, has it influenced the consumer to purchase a product or to engage in a particular conduct or behaviour? We look at the general impression as well as the literal meaning in assessing whether or not the representation is false or misleading.

[Terry Sheehan, Liberal, Sault Ste. Marie, ON]

In testimony we also heard that CASL does not apply to charities or not-for-profits. For the record, what's your opinion?

[Josephine Palumbo]

We do not have a carve-out for charities; we apply the law as it is. In fact, recently we had an alternative case resolution in a matter of charity bins, where they seemed to suggest they were helping charities and they actually were not. Our law doesn't distinguish that. In fact, it includes charities.