On May 2, 2023, Canada’s Globe and Mail published an opinion by Canada’s Commissioner of Competition (Commissioner), Matthew Boswell, arguing that key Canadian consumer markets are highly concentrated and urging for another new round of Competition Act reform.
In this regard, in general, the Commissioner argues that Canada has had a long history of concentration and monopolies in key sectors, including transportation, telecom and banking, and that legislative reform has often resisted increasing competition.
The Competition Bureau’s (Bureau) views follow a series of both recent federal government and Bureau recommendations for sweeping Competition Act legislative reforms, as well as an initial round of Competition Act amendments that were passed in June 2022.
For more information, see: Competition Bureau Publishes Sweeping Recommendations for Canadian Competition Law Reform, Competition Bureau Enforcement and Advocacy: Recent Developments, New Canadian Government Consultation on Fundamental Competition Act Amendments and Canadian Government Announces Sweeping Stage II Review of Federal Competition Law.
Proposed Competition Act Amendments
Some of the advertising and marketing related Competition Act amendments proposed by the Bureau include adopting a uniform consumer standard for deceptive marketing (in this regard, the current case law is inconsistent and unsettled), requiring sellers to bear the burden of proving that discounts are genuine under the civil ordinary selling price provisions of the Competition Act, and allowing a choice between the civil and criminal tracks for all of the deceptive marketing provisions (that is, not just for some provisions).
The Bureau also recommends the introduction of new penalties for deceptive marketing, including the addition of a contract annulment provision, and amending the newly added drip pricing provisions to prohibit instances where suppliers drip (i.e., fail to disclose upfront) their own costs for complying with various laws when making price claims.
The Commissioner notes, rightly, that Canada’s competition laws were not fully overhauled since 1986, which is when Canada’s Competition Act replaced the former Combines Investigation Act. There have, however, been several periodic significant rounds of amendments to Canada’s competition laws since that time, including in 1999, 2002, 2009 and as well last June. For more information, see: Competition Act Amendments.
The Commissioner’s comment appears, at least in part, to be driven by recent soaring inflation in Canada (and globally) as well as limited competitive options for Canadians in key consumer sectors:
“Canadians are seeing the impact of increasingly concentrated sectors dominated by giant corporations. They worry about rising bills and grow frustrated by limited choices and poor customer service.”
Competition Bureau Enforcement Challenges
While the Bureau has had some recent competition enforcement successes over the past several years, it has increasingly cited perceived weaknesses in Canada’s substantive competition law for its inability to fully perform its mandate (e.g., low penalties relative to other major international jurisdictions not providing sufficient deterrence, high bars for establishing both civil and criminal violations of the Competition Act, particularly for abuse of dominance under section 79 of the Act, and also in relation to Canada’s current efficiencies defence for mergers).
In this regard, the Bureau has sought, and continues to seek, specific substantive amendments to also more effectively enforce the Competition Act against some types of deceptive marketing practices, including, for example, drip pricing.
The Bureau has also pointed to what it sees as a number of procedural defects in enforcing Canada’s competition laws, including challenges obtaining timely interim injunctive relief in Canadian contested merger cases.
Though the Commissioner describes the Bureau’s Competition Act amendments as “far from radical”, it has made more than 50 amendment related recommendations for most of the cornerstone provisions of the Act in a significant recent submission to the government (see: Competition Bureau Publishes Sweeping Recommendations for Canadian Competition Law Reform).
Given that public consultations on this new potential round of Competition Act amendments have just closed at the end of March, it still remains to be seen whether (and to what extent) the federal government will accept the Bureau’s recommendations as well as those of other public stakeholders to overhaul and modernize Canada’s Competition Act.
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We are a Toronto based Canadian competition and advertising law firm that helps clients in Toronto, Canada and the United States practically navigate Canada’s advertising and marketing laws and offers Canadian advertising/marketing law services in relation to print, online, new media, social media and e-mail marketing.
Our Canadian advertising/marketing law services include advice in relation to anti-spam legislation (CASL), Competition Bureau complaints, the general misleading advertising provisions of the federal Competition Act, Internet, new media and social media advertising and marketing, promotional contests (sweepstakes) and sales and promotions. We also provide advice relating to specific types of advertising issues, including performance claims, testimonials, disclaimers, drip pricing, astroturfing and native advertising.
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