INDU Committee Report
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The overriding objective of competition law should be the preservation and enhancement of the vitality of the competitive process. … Competition law should not be used to protect or give advantage to individual competitors or classes of competitors, nor should competition law be used to pursue other political or social objectives. [Donald McFetridge, 44:9:05]
Considerable thought went into the framework for merger analysis as it’s embodied in the Competition Act. I think in general it’s still applicable and I don’t see any serious need to tinker with it. [Donald McFetridge, 44:10:10]
It is important that we create two branches for agreements between competitors, one branch that makes securing convictions against real true price fixers easier than it is currently ... At the same time… we need to be more accommodating to strategic alliances and joint ventures. [Tom Ross, 46:9:10]
Predatory pricing, resale price maintenance and price discrimination are all practices for which the anticompetitive uses are difficult to distinguish from procompetitive practices. … We simply need a specialized tribunal to make that difficult assessment. [Ralph Winter, 48:9:10]
Over the last few years, … there may have been some cases where bona fide anticompetitive conduct was not appropriately addressed. In our respectful view, the problems in question had more to do with insufficient enforcement resources than with any fundamental inadequacy of the Competition Act. [Paul Crampton, 53:15:35]
Private action would be a good complement to public enforcement. It would increase the deterrent effect of the law, and it would help build up a much-needed body of jurisprudence. Private rights of access to the Competition Tribunal in our view would work very well in conduct which is essentially a private matter between buyers and sellers and which therefore does not warrant public intervention. [Konrad von Finckenstein, 43:9:10]
Canadian competition policy, as embodied in the Competition Act and as carried out by the Competition Bureau and the Competition Tribunal, is a modern framework for dealing with contemporary antitrust issues. The Competition Act generally reflects modern economic analysis, though minor modifications might be desirable. The Competition Bureau’s enforcement guidelines can claim to be clear and transparent, though some fine-tuning would be helpful. The Bureau manages its current caseload well, though more resources would enable it to be a more vigilant enforcer. The Competition Tribunal has provided clear and thoughtful jurisprudence that properly embodies economic principles, though its procedures could be adjusted in order to expedite its workload and make room for more activity as a result of the granting of carefully thought out rights of private action.
The Committee praises these institutions, which were established to guard the public interest from the pernicious effects of restraints of trade and to enhancing the efficiency of the economy, as well as the people who make them work so well. Indeed, this Committee wants to reinforce their efforts to have the business sector squarely focus on wealth creation and to provide an equitable and productive marketplace and workplace for Canadians. For this reason, the Committee calls on the Government of Canada to consider bolstering the Competition Bureau’s resources for pursuing both criminal and civilly reviewable cases in the public interest and to grant rights for private enforcement in civilly reviewable matters, an area where more jurisprudence would be welcomed.
The Committee also calls upon the government to modernize its conspiracy provisions so that they distinguish between efficiency-enhancing strategic alliances and egregious cartel agreements. Specifically, the Committee finds shifting the former from the criminal to the civilly reviewable section of the Act (Part VIII), where they will be treated similarly to mergers, while giving the latter a rougher ride than at present by deleting the needless but burdensome requirement to prove that they lessened competition unduly, is worthy of further study.
The Committee finds that the government should consider shifting the three anticompetitive pricing provisions, predatory pricing, vertical price maintenance, and price discrimination from the criminal to the civilly reviewable section of the Act, so that the Competition Tribunal can better sort out the implications of these practices. This might be accomplished by repealing the existing price discrimination provision, but the horizontal price maintenance and predatory pricing prohibitions might be retained (with modification) under the criminal section of the Act. Given that the government favours private rights of action in civilly reviewable matters, the refusal to deal and delivered pricing provisions should also be modified to include a "competitive effects" test to avoid becoming entangled in strictly private contractual disputes.
The Committee, as suggested above, finds that the government should consider enacting legislative changes whereby private individuals who have been prejudiced in the conduct of their business by anticompetitive conduct could apply to the Competition Tribunal for relief in civilly reviewable matters. The relief available to private litigants, whether in the form of injunctive relief or damages, or both, should be the subject of further and wider consultation with the public. The Committee also believes the government should continue the process of consultation with the Competition Bureau, the Competition Tribunal and stakeholders on the development of expedited Competition Tribunal procedures for ensuring that disputes involving allegations of anticompetitive conduct are resolved on their merits quickly and cost-effectively.
Finally, the Committee recommends against modifying the Competition Act specifically for the newspaper industry. Rather, it is suggested that the discussion of issues of diversity of ownership in newspapers and other information media would be more appropriately carried out through the Department of Canadian Heritage, in consultation with stakeholders.