Industry Committee on Dec. 3rd, 2020

[Matthew Boswell]

That's what we clarified to the Canadian public last Friday, that agreements between competitors with respect to things such as wage fixing and no-poach agreements are not captured by our criminal powers, as a result of 2009 amendments to the law that removed the word “purchase” from that particular section of the law. We had legal advice that we couldn't bring those cases criminally.

Of course, as you point out, that puts us out of sync with our biggest trading partner, where the U.S. Department of Justice antitrust division has indicated that those types of agreements—if the agreement is established, which is obviously an important first step in any investigation of that sort—will be prosecuted criminally in the United Stated.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

I note that the FTC also says that mere communication can amount to an agreement in certain circumstances.

I would also note a limitation, in my read of section 90.1. While it could, in theory, apply where an agreement must be “existing or proposed”, in this case it would have been a past agreement, so even there there is a limitation that we might well want to address.

The past commissioner, your predecessor, Commissioner Pecman, recommended expanding the act's purpose beyond protecting consumers to include the fair treatment of labour. You referenced the 2009 change that we could potentially reverse. Do you think our laws ought to be consistent with those of the United States?

[Matthew Boswell]

I think that, for a variety of reasons, convergence of competition laws, certainly within North America, is something that would be beneficial in multiple ways, including beneficial to the business community, because they would understand that the laws they must comply with are the same or nearly the same in both Canada and the United States, so there is value there.

Clearly, as a result of our statement last week, there is now divergence on that particular issue, which, as we pointed out in our statement, is a serious issue for Canadian workers.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

I appreciate that, Commissioner.

We are a country of oligopolies, and there is great inequality of bargaining power in the context of oligopolies. You have noted a couple of times now in your testimony that the Competition Act really does not directly address the inequality of bargaining power, unless it amounts to an abuse of dominance.

We see in Australia a conversation about a code of conduct between news media and platforms using a competition lens to address that inequality of bargaining power. We also see in the U.K. a code of conduct used between national grocers and producers. It's been brought to my attention that we should have a code of conduct like that for our national grocers and producers to address that inequality of bargaining power. That could be a provincial conversation.

Do you think there would be a way, though, to amend the Competition Act to allow for you and your office to impose codes of conduct where you deem it necessary to address that inequality of bargaining power in the case of oligopolies?

[Matthew Boswell]

Well, that's a good question. It's not something that I have a ready answer for in terms of the various issues that might be in play with that in the provincial-federal jurisdiction and those sorts of things. As you point out, a code of conduct in the United Kingdom has been well received.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

Thanks very much.

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

Mr. Lemire, you now have the floor for two and a half minutes.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Thank you, Madam Chair.

Mr. Boswell, earlier, you mentioned your concern about the increase in mergers, particularly in the context of the COVID-19 pandemic and of the impact of market concentration and long-term harm. You are therefore monitoring the impact of these mergers.

Cablevision, which is a subdivision of Bell, does not provide an essential service to the population, under the pretext that the population pool does not meet regulatory requirements. For example, it provides television services at the low price of $25 if there is a pool of at least 20,000 customers. This is not the case, for example, in Amos, in Abitibi.

Have you been made aware of this situation, and can the Bell company, through its Cablevision subdivision, relieve itself of its responsibility in this way?

[Matthew Boswell]

My colleague Mr. Durocher will answer that question.

[Anthony Durocher]

It will be my pleasure.

I'll go back to the first part of the question. The Competition Act includes provisions that require companies to give us advance notice or information before proceeding with a merger. They have to wait a certain amount of time to see if they meet certain financial thresholds. We must be given the opportunity to review merger plans that could affect consumers.

With respect to the business activities of some companies and their decision to be present in certain markets or not, I think that companies make their decisions mainly according to their business interests.

In our view, it is important to ensure that there is no anti-competitive behaviour, no abuse of a dominant position, and no purchase of a competitor that could lessen competition in a market.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

If I understand correctly, there could be inequity in remote areas where the population base is smaller.

One of the main problems in deploying the Internet in the regions is access to the infrastructure, poles and networks of major suppliers. To your knowledge, is it the same across the country?

For example, Hydro-Quebec can provide access to its poles without delay. In the case of Bell, on the other hand, there are often delays. Can you confirm that this is an anti-competitive practice, and have you ever looked into this issue?

[Anthony Durocher]

Thank you for the question.

I cannot comment when we are conducting an investigation on a particular file. We are on the lookout for new developments. If the CRTC is looking into this issue, we will be able to intervene and provide our competitive perspective. Clearly, access to poles, for example, is important to the rollout of 5G across Canada and in the regions. The role of the Competition Bureau is to provide a competition perspective on this.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Thank you very much.

[The Chair, Liberal, Sherry Romanado]

Thank you.

I gave you a little more time so the witness could answer the question.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Madam Chair.

Part of the challenge for a country like Canada is that we've become a branch-plant economy in many respects, aside from a few domestic champions for headquarters here in Canada. A good example is the lack of use of the Investment Canada Act to protect iconic Canadian companies like Rona, for example, which is now owned by Lowe's. Hence, other than companies like Burger King, which wanted to put its headquarters here to evade tax in the United States and put up false offices, really, in Toronto and other regions, we don't have the decision-makers here as much.

How much of a disadvantage is it for us—for example, compared with the United States—not to have greater co-operation amongst our laws, and consistency? For example, in Windsor here, as our minivan, which is a world-class vehicle, is being built, it literally crosses the border back and forth seven times. There's a whole regulatory regime that protects consumers, aside from the aftermarket issue that I raised, with regard to the building of it, the quality and a series of things that are consistent for the consumer.

With a digital economy, how important is it for us to get further co-operation legislatively with the United States to protect consumers?

[Matthew Boswell]

As an enforcement agency, we co-operate and collaborate extensively with our American counterparts. We have deep relationships with them and we share information on cases, or potential cases, on a regular basis in many aspects of our enforcement work, which we believe provides a better result for Canadians and a better result on the U.S. side of the border when we are working together on these matters.

Of course, as I pointed out earlier, there are some areas where our laws diverge. Those areas could be examined if there was a desire by elected officials to bring our laws closer together.

[Brian Masse, NDP, Windsor West, ON]

Would that result in better consumer protections and repercussions in terms of benefits, similar to what Americans get on different cases? For Toyota, for example, it was clearly different what took place, as well as for Facebook and a series of things. Would that help merge those two types of penalties and repercussions?

[Matthew Boswell]

A review of sanctions is something that, obviously, came up following the Facebook resolution in Canada and was commented on extensively.

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

Our next round of questions goes to MP Cumming.

You have the floor for five minutes.

[James Cumming, Conservative, Edmonton Centre, AB]

That's great.

Thank you to the witnesses for being here today.

I want to start off with a discussion around the concentration that's happening with the large, big tech players. You mentioned earlier that you've had a couple of rulings related to Facebook and Amazon, but given the nature of their business and the direction in which it's going, how concerned are you about the market concentration they will have as major players in Canada? What tools do you have in your tool chest to be able to hold them accountable for predatory practices and market dominance?

[Matthew Boswell]

Madam Chair, I thank Mr. Cumming for that excellent question.

This is an issue that competition agencies around the world have been grappling with, how these digital platform markets can be, to a certain extent, winner-take-all markets where the competition is for the market, not in the market. The bureau has been very alive to these issues and working on these issues for several years.

In September 2019, we put out what we refer to as a digital enforcement call-out, where we had a white paper, an issues paper, that explained to the Canadian public the key competition issues in these digital markets, how they could tip to concentration of one or a small number of companies, and what type of anti-competitive practices to be on the lookout for in these markets.

That's similar to our call-out for information earlier this year about conduct in Amazon. That's obviously an ongoing investigation, so I can't get into the details.

These are serious issues that, as I said, our colleagues around the world are grappling with. There has been extensive work done in this area. The bureau is on it and is paying close attention. Where we find the evidence or where the evidence leads us to bring a case, we'll bring a case.

[James Cumming, Conservative, Edmonton Centre, AB]

I completely agree with you. It's a significant issue, and actually made far worse with the pandemic. Given that market dominance, it has increased significantly.

Has your department spent much time reviewing the provisions within Bill C-11 on data privacy and some of the data regulations? Are the definitions strong enough? Have you done a thorough review? Can you share with us any opinions you might have, either right now or by following up with something in writing?

[Matthew Boswell]

Madam Chair, thanks again for the question.

We haven't done a deep dive on the bill before Parliament. What I can say, though, is that there are certainly aspects in the bill that we view as positive, including giving the Office of the Privacy Commissioner greater ability to share information with the bureau, and a small amendment to the Competition Act to provide for sharing between the bureau and the Privacy Commissioner. That we view as positive.

There is also the notion of data mobility, which is set out in the bill, to be expanded upon, I guess, with more detail to come in regulations to follow. Data mobility, to my mind, is synonymous with data portability, which can have tremendous competitive benefits in the economy. It allows for greater switching between services in multiple different sectors.

We have, of course, looked at the bill. As I said, we haven't done a deep analysis, but on our initial review there are elements that we view as positive for our work and for our ability to work with the Privacy Commissioner, because more and more there's a great intersection between competition and privacy.

[James Cumming, Conservative, Edmonton Centre, AB]

Were you not asked to provide input prior to the drafting of the bill? This bill is very strongly connected to the work you do.

[Matthew Boswell]

It wasn't a situation where we were asked for input.