No River too Wide, No Mountain too High: Enforcing and Promoting Competition in the Digital Age

Remarks by Commissioner of Competition Matthew Boswell
Canadian Bar Association Competition Law Spring Conference 2019
May 7, 2019
Toronto, Ontario
(As prepared for delivery)

Thank you everyone.

Thanks to the Canadian Bar Association and Oliver Borgers, the Chair of the Competition Law Section, for inviting me to speak today at your annual Competition Law Spring Conference.

Thanks, as well, to Chris Naudie the chair of today’s event, for your hard work in bringing this all together.

At the Bureau, we deeply value our relationship with the CBA, and we appreciate your willingness to engage with us.

We will continue to collaborate, through consultations and discussions—formal and informal—and through important events like this one you’re hosting today. We know that we won’t always agree, but the dialogue is mutually beneficial and leads to better outcomes for all concerned.

Introduction

When I last had the honour to speak to you, at the Fall CBA conference, I was Interim Commissioner of Competition.

And I talked to you about how the Bureau was in a time of transition.

I drew a metaphor, and I asked you all to imagine the Bureau team expertly navigating across a river full of eddies and currents.

Last fall, we were mid-river.

This spring, I’m proud to say that the Bureau team has skillfully piloted our boat to the other side of that crossing.

And now, here I stand on the opposite shore, surveying the land as Canada’s Commissioner of Competition.

And the view is a good one, but it features some potentially challenging terrain.

There’s no doubt we’ve got a mountain to climb to achieve our vision for the Bureau.

We have developed priorities for 2019-2020 to see us through the next year—this work will get us to our base camp.

Over the remaining four years of my term as Commissioner, we will break out the ropes and the grappling hooks, and we will make our way up that mountainside. And we’ll draft a four-year plan to guide our longer-term strategy. This will be our path to the peak to achieving our vision.

We may not get to the peak before my term is over.

But, make no mistake, that’s our goal. We will strive toward it with all of our combined determination which I assure you, is considerable.

We will have many specific goals and targets to achieve along the way. And we will make investments to help us achieve those goals and targets.

It has been said that the mark of good public administration is the willingness to plant trees whose shade you will never enjoy.

We intend to plant trees as we climb our proverbial mountain.

So that the Bureau is well positioned and ready to uphold and promote the laws we are mandated to oversee and to take action to stop those who would break them—no matter what new and complex challenges the future will bring.

The odds are very good that there will be some course corrections, but I have no doubt that we’ll arrive as an organization that is better placed to tackle all the challenges that lie ahead.

I know this not because I can see the future, but because of what I can see in the present.

And what I see is a team of intelligent and dedicated professionals.

A team of people that bring passion, curiosity, and humility to their work every day, and a dogged determination to follow where the evidence leads.

And a robust team to support that work—from evidence handling and analysis to advocacy and international collaboration.

Canadians are very fortunate to have such an incredible team working in the public interest day in and day out, and it is, without a doubt, my great honour to work alongside all of them.

The good work they are doing gives me tremendous confidence in our future.

Of course, we’ll add a few new team members along the way, and we’ll need some new gear to get us there.

But we’re off to a great start, and I for one am excited about the journey ahead.

130 Years of Competition Law in Canada

I will speak more about our vision and our plans, but first, I hope you’ll indulge me in a quick look back.

I want to turn your attention to the past because 2019 is an important year in our history.

2019 marks the 130^th anniversary of competition law in Canada.

The Act for the Prevention and Suppression of Combinations Formed in Restraint of Trade received Royal Assent on May 2^nd, 1889.

2019 also marks the 10-year anniversary of important amendments to the Act in 2009.

And, this year is also the 15^th anniversary of the Bureau-led Fraud Prevention Month initiative.

So, 2019 is a big year for competition law and the enforcement of those laws in Canada. This is something we should all celebrate.

Back in the 1880s, many legislators in Canada and the United States were increasingly concerned that companies were forming combines and trusts, to the detriment of consumers and the economy.

In fact, the Wallace Report of 1888, one of the key pieces of Parliamentary work that led to Canada’s original competition law, focussed in part on a cartel among grocers.

The House Select Committee, chaired by M.P. Wallace, found that:

“This Grocer’s Guild, with its several combinations, is obnoxious to the public interest ... in limiting competition, in enhancing prices, and tending to produce and propagate all the evils of monopoly.”

The language is antiquated, but the message still resonates today.

In 2019, we are once again investigating an alleged cartel among grocers with our bread-price fixing investigation.

So, back in the 1880s, while concern was brewing in both countries, the Canadian Parliament acted swiftly, and established the first antitrust law in the world.

In the early 20^th century, the law was administered by fewer than 10 people, with a budget of less than 50,000 dollars a year and the Act remained quite brief.

To be certain, many things have changed over 130 years.

But, there has been continuity as well.

Over the years, challenge has been our constant companion as we have carried out our work in the public interest.

In fact, another look back at history shows we’ve taken on tremendous challenges in the public interest. Let me give you an example:

In 1976, we were given statutory authority to advocate for competition in regulated sectors.

The timing could not have been more right.

Over the next 20 years, tightly regulated sectors like transportation, telecommunications and energy gradually opened up to greater competition for the benefit of Canadians and the Canadian economy.

During this time, the Bureau made 208 regulatory interventions, on matters from long-distance telephone services to private trucking licensing, to domestic airfare policy.

These interventions laid the groundwork for our competition advocacy program, which continues to this day, and is a very important part of our work.

As you can see, we have always faced challenges and disruption. But now, we face them in the context of a rapidly changing and disruptive digital economy.

We will be hiking up this mountain, pushing toward our vision, at a time when many around the world are questioning traditional competition law frameworks, tools and approaches. So, as we climb, we will regularly assess them in the context of the world’s fast-changing, disruptive, data-driven economy.

We are proud of our history and we will celebrate it this year. But, our history also reminds us that we have faced significant challenges before and have tackled those challenges with a view to the future.

Our Vision

What, then, is the vision for the Bureau over the coming years? What does the summit of the mountain look like in my mind’s eye?

Big picture—the vision is for the Bureau to be among the world’s leading competition agencies in terms of how we do all aspects of our work in the digital economy. We will prioritize our work to vigorously enforce and promote competition in sectors of the economy that matter to Canadians.

In my time as Commissioner, active enforcement will be an area of primary focus, and the Bureau will not hesitate to take appropriate action to safeguard Canadians against anticompetitive conduct.

We will use all of the tools at our disposal to address what we believe to be problematic conduct. This will include increased consideration of the use of tools such as injunction applications in our work.  Moreover, we will use these tools more frequently, as resources permit, to interrupt or halt the conduct in question, pending a full hearing.

We will renew our ranks, reaching outside the fields of economics and law, to invigorate our team with wide-reaching expertise and varied perspectives.

We will remain an organization that prioritizes the detection, investigation and prosecution of criminal cartel matters—“the supreme evil of antitrust”.  We will work collaboratively with the PPSC to ensure that they are in the best position to assess our referrals and to prosecute criminal matters.

We will seek the assistance of the Courts in resolving disputes related to investigative phases of our work if we cannot reach a consensual resolution with the parties in a timely fashion.

We will always take principled decisions when exercising our enforcement discretion. Our decisions will be based on a solid evidentiary foundation. You can expect that we will demand that evidence from your clients if you are asking us to exercise our enforcement discretion.

We will bring forward principled cases and we won’t hesitate to move to litigation when we cannot reach a reasonable and appropriate consensual resolution. We know that this will mean we may have to bring more difficult cases to litigation, but we believe this is important to do where we can’t agree on outcomes. Whether we win or lose, these cases will provide valuable jurisprudence and help to clarify the law.

We will work hard to continuously improve the timeliness, effectiveness and efficiency of our enforcement work, and look for ways to make the best use of our limited resources to strengthen competition in Canada. In other words, we will endeavour to do our work faster without sacrificing quality.

At the summit, I want the Bureau to be an organization that is more agile in adapting to changes in the economy—particularly technological changes. A world leader in the handling, securing, processing and analyzing of massive amounts of data and digital evidence in a timely fashion. An employer of choice that attracts and retains highly skilled staff who are empowered by cutting-edge tools and techniques, and emboldened by the support of their leadership.

The Bureau is Canada’s authoritative voice on competition issues in our economy. We will work to amplify this voice by continuing to build our credibility, not only through enforcement work, but also through competition promotion and advocacy efforts that resonate with Canadians.

We will continue to be as transparent as we can be with parties and the public about our work. We will communicate more frequently with Canadians about the actions we are taking, and we will emphasize the direct impact our work has on consumers and businesses. I want more Canadians to know about the crucial work we do and why that work is important to them.

Finally, the rapid rise of the digital economy is a truly global phenomenon, which requires competition authorities to collaborate and cooperate on an almost daily basis.

But, of necessity, we will engage internationally in a more targeted fashion owing to our limited resources. We will be rigorous in prioritizing our engagement so that we are using our resources to best advance our work. We plan to build upon our long history of bilateral enforcement cooperation and deepen our relationships with key partners such as our "Five Eyes" partners, as well as with the European Union and Mexico.

We will continue to engage with our international counterparts and to contribute to the important dialogue in the context of the Organisation for Economic Co-operation and Development, the International Consumer Protection and Enforcement Network and the International Competition Network.

What we are currently doing to advance the vision

This vision is ambitious, and, as I said, in the coming months we will develop a four-year plan to map out our trek up the mountain.

But we have already started our ascent. 

We are in the final stages of hiring a Chief Digital Enforcement Officer to support all aspects of our enforcement work in the digital economy, and to help us keep pace with the fast-moving digital marketplace. We anticipate announcing the successful candidate in the coming weeks.

And to advance our understanding and approach to enforcement in the digital economy, I’m pleased to say we will be hosting a Data Forum at the end of this month.

At that Forum, we will discuss the impact of data-driven innovation and explore the regulatory and enforcement challenges that come with it. We have invited a wide cross-section of impressive speakers from Canada and around the world. We are looking forward to the dialogue and debate.

So, we are already taking some important steps up the mountain.

And as part of our climb, specific initiatives are already underway across the Bureau.

To illustrate this work, I would like to provide you with some examples from our enforcement directorates.

Let me begin with Mergers:  

Empowering Officers

Given the tight timelines we are faced with in merger reviews, greater engagement with the parties earlier in the process will allow for more transparency and allow for more efficient reviews

And so, we are empowering our officers to be as transparent as possible with merging parties and their counsel, on a without-prejudice basis, earlier in the review process.

Of course, we will expect parties to understand that our analysis and views evolve as the review progresses. And accordingly, they can also expect an ongoing dialogue with our teams.

Efficiencies Defence

Like it or not, the efficiencies defence is a reality in Canadian competition law. This makes it important for us to have a clear, predictable process around how we handle efficiencies claims, and how I exercise my enforcement discretion outside of a litigated context.

Since the Tervita decision in 2015, we have been examining what the decision means for our reviews under the merger provisions of the Act and, more specifically, the efficiencies defence. We have tested and adapted a few approaches, including the one set out in the draft Practical Guide to Efficiencies that was released for consultation a little over a year ago. As a result of our ongoing experience, we have determined that we need to change our approach to emphasize testing the evidence underlying efficiencies claims and having a reasonable amount of time to do so.

It is important to remember that the efficiencies defence is only applicable where we have significant concerns that a merger is likely to substantially prevent or lessen competition in the relevant market or markets. And that, as a result, Canadians are likely to face higher prices, fewer or lower quality choices, and less innovation after the merger.

With each case, we continue to learn.

As a result of our experience, we have determined that we need to rethink our procedural approach to merger review where parties are asking the Commissioner to exercise enforcement discretion not to challenge a likely anti-competitive merger based on the efficiencies defence.

I am highly unlikely to exercise my enforcement discretion and not challenge a potentially anti-competitive merger without reliable, credible, and probative evidence that supports and validates the efficiencies defence being advanced.

Our refined procedural approach, in these types of cases, will call for:

• the provision of detailed evidence supporting the efficiencies claimed;
• the ability to test the evidence underlying those claims; and
• adequate time, set out in a timing agreement, to conduct a meaningful assessment of the efficiencies claimed.

I believe that this refined approach will provide greater certainty and predictability in terms of what we will expect in these situations and how our merger review process will unfold.

In the coming weeks, we intend to provide guidance on the general categories of evidence and information that parties will need to produce to the Bureau to advance and support their claims.

We also intend to release a model form of timing agreement for consultation that will include timed stages for production of information and evidence and engagement with the Bureau during a review that involves efficiencies claims. Part of this model timing agreement will also include a commitment that I will not file an application while this process is ongoing, provided that parties also commit to not take steps towards closing.

Let me be clear, there is no obligation on parties to follow this refined approach.

If, however, you are seeking to have me exercise my enforcement discretion in the context of an efficiencies defence, then I will need to be satisfied that I have been provided with the appropriate evidence in support of your defence and that we have been able to properly test that evidence before the parties take any steps towards closing the proposed transaction.

As I said earlier, we will always take principled decisions when exercising our enforcement discretion. Our decisions must be based on a solid evidentiary foundation.

Merger Intelligence and Notification Unit

Also in mergers, we have expanded the role of the Merger Intelligence and Notification Unit to include a broader focus on intelligence gathering. This will assist in fulfilling our mandate to detect, investigate and challenge mergers that could breach the Act.

Notification provisions allow detection of most, but not all, potentially anti-competitive transactions.

Our intelligence gathering efforts are capturing other transactions.

Notably, the unit has been operating for less than two months now, and already two of the unit’s reviews have captured two potentially problematic transactions.

In both instances, there was no indication that the merging parties intended to voluntarily engage with the Bureau before closing and investigations are ongoing.

This new intelligence gathering approach is consistent with our vision to be an active enforcer of the law.

In our Monopolistic Practices Directorate, we are already taking steps to fulfill our vision to improve the timeliness, effectiveness and efficiency of our enforcement work. We are implementing an initiative to improve case selection practices to hone in on and advance the highest impact cases.

We are also implementing internal best practices with the goal of advancing our investigations more quickly, including the creation of a more rigorous process to determine which cases to focus on following a preliminary assessment.

As we did with the Toronto Real Estate Board matter, this Directorate will pursue abuse of dominance investigations, and any litigation that ensues, with tenacity. Where possible, we will prioritize cases that resonate with Canadians and that involve issues in the digital economy.

Turning now to the Cartels Directorate, we continue to work collaboratively with the Public Prosecution Service of Canada in line with our vision to ensure that they are best positioned to assess our referrals and to prosecute criminal matters.

There are six referrals with the PPSC for review and an additional seven recommendations to the PPSC under our Immunity and Leniency Programs, and there are more to come.

In line with our vision, we remain committed to exploring ways to develop better tools to detect anti-competitive conduct and build our cases. We continue our work on developing a screening tool to detect bid-rigging through data analysis. Also, with the growing volume of data, we are using the tools at our disposal and will seek to acquire new and better technology to ensure timely investigations and referrals going forward.

Criminal Intelligence Unit

Also within our Cartels and Deceptive Marketing, the recently created Criminal Intelligence Unit is designed to provide tactical and strategic intelligence support to investigators and managers, through an intelligence-led approach to enforcement. This is yet another example of our on-going work to fulfill our vision to be a more active—in fact, proactive—enforcement agency. 

Over the last several years, we have faced issues gaining timely access to electronically seized records due to claims of solicitor-client privilege. As set out in our vision, we will seek the assistance of the Courts in resolving disputes related to investigative phases of our work if we cannot reach a consensual resolution with the parties in a timely fashion.

We will continue to favour a collaborative way forward when addressing issues related to claims of privilege. But, we will also file section 19 applications more readily and sooner when we are of the view that we simply cannot reach a consensual resolution as to how we should address the privilege claims.

As you can see, we are already taking steps to support our vision to prioritize the detection, investigation and prosecution of criminal cartel matters.

Finally, our Deceptive Marketing Practices Directorate will continue to prioritize investigating misleading representations made online and collaboration on borderless digital conduct, in keeping with the digital economy focus I outlined a few moments ago.

Our new Chief Digital Enforcement Officer will play a central role in positioning the Bureau as one of the world’s leading competition agencies in terms of how we do all aspects of our work within the digital economy. Our new Digital Enforcement Officer will accomplish this by:

• Providing ongoing advice to ensure that we have the technology, tools and techniques to capture evidence of deceptive marketing practices made online;
• Leading our efforts to monitor the threat landscape and the underlying emerging technologies;
• Acting as an “ambassador” for the Bureau by forging effective relationships on behalf of the Bureau with domestic and international partners and stakeholders in the context of digital enforcement; and
• Strengthening our investigative talent by building the capacity of current staff and by guiding the recruitment of new Bureau employees.

Of course, in today’s borderless digital economy, it is essential to foster strong and collaborative partnerships. 

The Bureau’s participation in the International Consumer Protection Enforcement Network (ICPEN) is a key element of our enforcement efforts in the digital economy.  So, I am pleased to announce today that the Bureau will be assuming the ICPEN Presidency for the term starting July 1, 2020. 

During our presidency, our focus will be on improving trust in the digital economy and on embracing ICPEN’s vision to protect consumers by preventing illegal cross-border conduct.  Leading the global community in this area will focus international attention on building trust in the digital economy through enforcement, a key element of our vision.

As you can see, we have begun the climb toward the summit and toward achieving our vision. The examples I have just outlined are just a few elements of the ongoing work we are doing at the Bureau. Our competition advocacy and promotion efforts are relentless, and they are an invaluable part of our vision to position the Bureau as one of the world’s leading competition authorities. Our four-year plan will speak to our longer-term advocacy and promotion work, in addition to enforcement.

Conclusion

So, to conclude, let me summarize by saying that, as I have always tried to do in my work, I’ll be taking a determined, humble and pragmatic approach to our journey during my time as Commissioner.

And as we make our way up our mountain, our path to the top may change and we will need to course correct.

We will experience successes along the way, but it is inevitable that we will also encounter failure. That is to be expected and we will adapt.

We are no strangers to hard work and dedication at the Bureau, and we will take those qualities with us as we venture into new territory. I was incredibly fortunate to lead an amazing team as we crossed our river together, and I look forward to our journey together as we strive to summit our mountain.

I would like to close by sharing a mantra (cobbled together from famous quotes from well-known professional sports coaches) that guided my father’s professional life:

     Success is never final.
     Failure is never fatal.
     Change is constant.

I think that this expression is very a propos for the vision I have for the Bureau, and for the mindset that we must adopt to make that vision a reality.

Thank you for your attention, and enjoy the rest of the conference.