INST Committee Report
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LIST OF RECOMMENDATIONS
1. | That the Competition Bureau
designate conspiracies as one of its highest priorities and that it allocate enforcement
resources consistent with this ranking. That the Competition Bureau continue implementing
existing enforcement strategies that target domestic and international conspiracies
against the public, independently and jointly with competition authorities of other
jurisdictions. As a matter of routine, that the Competition Bureau review its tactics of
crime detection with a view to improving its current record of success. |
2. | That the Competition Bureau
review its enforcement guidelines, policies and practices to ensure appropriate emphasis
is placed on dynamic efficiency considerations in light of new challenges posed by the
knowledge-based economy, including factors such as: (1) high rates of innovation; (2)
declining or zero marginal costs on additional units of output; (3) the possible
desirability of market dominance by a firm where it sets a new industry standard; and (4)
the increasing fragility of dominance. |
3. | That the Government of Canada
empower the Competition Tribunal with the right to impose administrative penalties on
anyone found in breach of sections 75, 76, 77, 79 and 81 of the Competition Act.
Such a penalty would be set at the discretion of the Competition Tribunal. |
4. | That the Government of Canada
repeal all provisions in the Competition Act that deal specifically with the
airline industry (subsections 79(3.1) through 79(3.3) and sections 79.1 and 104.1). |
5. | That the Government of Canada provide the
Competition Bureau with the resources necessary to ensure the effective enforcement of the
Competition Act. |
6. | That the Competition Tribunal develop and articulate
a policy to allocate costs in a fair and equitable manner having regard to the resources
available to the parties to the proceeding. That such a policy consider the merits of
exempting small businesses from liability for costs in Tribunal proceedings. |
7. | That the Competition Tribunal, in consultation with
the Tribunal-Bar Liaison Committee, continue its ongoing review of procedures with the aim
of creating an adjudicative system that will ensure "just results" in an
expeditious and timely manner. Such procedures should aim at reducing parties costs,
as well as the time required, in bringing contested cases to a conclusion while, at the
same time, continuing to ensure that due consideration is given to principles of
procedural fairness and the appearance of justice. |
8. | That the Government of Canada amend the Competition
Act and the Competition Tribunal Act to extend the private right of action in
the case of abuse of dominant position (section 79) and to permit the Competition Tribunal
to award damages in private action proceedings (sections 75, 77 and 79). |
9. | That the Government of Canada amend section 124.2 of
the Competition Act to permit a party to a contested proceeding under Part VII.1 or
VIII to refer to the Tribunal a question of law, jurisdiction, practice or procedure in
relation to the application or interpretation of Part VII.1 or VIII. |
10. | That the Government of Canada amend section 12 of
the Competition Tribunal Act to permit questions of law to be considered by all the
members sitting in a proceeding. |
11. | That the Government of Canada amend section 13 of
the Competition Tribunal Act to require that an appeal from any order or decision
of the Tribunal may only be brought with leave of the Federal Court of Appeal. |
12. | That the Government of Canada amend the Competition
Act to create a two-track approach for agreements between competitors. The first track
would retain the conspiracy provision (section 45) for agreements that are strictly
devised to restrict competition directly through raising prices or indirectly through
output restrictions or market sharing, such as customer or territorial assignments, as
well as both group customer or supplier boycotts. The second track would deal with any
other type of agreement between competitors in which restrictions on competition are
ancillary to the agreements main or broader purpose. |
13. | That the Government of Canada repeal the term
"unduly" from the conspiracy provision (section 45) of the Competition Act. |
14. | That the Government of Canada amend the Competition
Act by adding paragraphs to section 45 that would provide for exceptions based on
factors such as: (1) the restraint is part of a broader agreement that is likely to
generate efficiencies or foster innovation; and (2) the restraint is reasonably necessary
to achieve these efficiencies or cultivate innovation. The onus of proof, based on the
"beyond a reasonable doubt" standard, for such an exception would be placed on
the proponents of the agreement. |
15. | That the Government of Canada amend the Competition
Act to add a paragraph to section 45 that would prohibit any proceedings under
subsection 45(1) against any person who is subject to an order sought under any of the
relevant reviewable sections of the Competition Act covering essentially the same
conduct. |
16. | That the Government of Canada amend the civilly
reviewable section of the Competition Act to add a new strategic alliance section
for the review of a horizontal agreement between competitors. Such a section should, as
much as possible, afford the same treatment as the merger review provisions (sections 92
through 96), and should authorize the Commissioner of Competition to apply to the
Competition Tribunal with respect to such agreements that have or are likely to have the
effect of "preventing or lessening competition substantially" in a market. |
17. | That the Government of Canada ensure that its newly
proposed civilly reviewable section dealing with strategic alliances, as found in
recommendation 16, apply to agreements between competing buyers and sellers, but not to
vertical agreements such as those subject to review under sections 61 and 77 of the Competition
Act. |
18. | That the Competition Bureau establish, publish and
disseminate enforcement guidelines on conspiracies, strategic alliances and other
horizontal agreements between competitors that are consistent with recommendations 12
through 17 that would amend the Competition Act. |
19. | That the Government of Canada amend the Competition
Act to allow for a voluntary pre-clearance system that would screen out competitively
benign or pro-competitive horizontal agreements between competitors from criminal
liability pursuant to subsection 45(1) of the Act. That the Competition Bureau levy a fee
on application for a pre-clearance certificate that would be based on cost-recovery
principles similar to that of a merger review. That a reasonable time limit upon
application for a certificate be imposed on the Commissioner of Competition, failing which
the applicant is deemed to have been granted a certificate. |
20. | That the Government of Canada amend the Competition Act to allow individuals who have been refused a pre-clearance certificate for a horizontal agreement between competitors by the Commissioner of Competition be given standing before the Competition Tribunal for a fair hearing on the proposed agreement. That such standing be granted only if the agreement remains proposed and has not been completed. |
21. | That the Government of Canada repeal paragraphs
50(1)(b) and 50(1)(c) of the Competition Act and amend the Act to
include predatory pricing as an anticompetitive act within the abuse of dominant position
provision (section 79). |
22. | That the Government of Canada repeal the price
maintenance provision (section 61) of the Competition Act. In order to distinguish
between those practices that are anticompetitive and those that are competitively benign
or pro-competitive, that the Government of Canada amend the Competition Act so
that: (1) price maintenance practices among competitors (i.e., horizontal price
maintenance), whether manufacturers or distributors, be added to the conspiracy provision
(section 45); and (2) price maintenance agreements between a manufacturer and its
distributors (i.e., vertical price maintenance) be reviewed under the abuse of dominant
position provision (section 79). |
23. | That the Government of Canada repeal the price
discrimination provisions (paragraph 50(1)(a) and section 51) of the Competition
Act and include these prohibitions under the abuse of dominant position provision
(section 79). This prohibition should govern all types of products, including articles and
services, and all types of transactions, not just sales. |
24. | That the Government of Canada amend the Competition
Act by deleting paragraph 79(1)(a). |
25. | That the Competition Bureau revise its Enforcement
Guidelines on the Abuse of Dominance Provisions in order to be consistent with the
addition of the anticompetitive pricing practices (paragraphs 50(1)(a) and 50(1)(c)
and section 61) to section 79 of the Competition Act. |
26. | That the Government of Canada amend section 110 of
the Competition Act to require parties to any merger (i.e., asset or share
acquisitions) involving gross revenues from sales of $50 million in or from Canada to
notify the Commissioner of Competition of the transaction. |
27. | That the Government of Canada amend the Competition
Act to have a parliamentary review of the notification thresholds contained in
sections 109 and 110 within five years and every five years thereafter to ensure
optimal enforcement of the Competition Act. |
28. | That the Government of Canada immediately establish
an independent task force of experts to study the role that efficiencies should play in
all civilly reviewable sections of the Competition Act, and that the report of the
task force be submitted to a parliamentary committee for further study within six months
of the tabling of this report. |
29. | That the Competition Bureau issue an interpretation guideline clarifying whether section 75 would apply to the circumstance where a supplier in a market characterized by supply shortages could selectively ration its available supply in such a manner as to discriminate against independent retailers. |