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3. 3 What is the Competition Act? Federal statute whose roots go back to 1889
Framework legislation generally applicable to all industries
It is Canadas competition policy.
4. 4 What is the purpose of the Competition Act? Section 1.1 of the Act tells us:
The purpose of this Act is to maintain and encourage competition in Canada in order to promote the efficiency and adaptability of the Canadian economy, in order to expand opportunities for Canadian participation in world markets while at the same time recognizing the role of foreign competition in Canada, in order to ensure that small and medium-sized enterprises have an equitable opportunity to participate in the Canadian economy and in order to provide consumers with competitive prices and product choices.
5. 5 Overview of Key Provisions of the Act The Acts three foundations are:
Criminal prohibition of conspiracies, agreements or arrangements that lessen competition unduly (anti-cartel provision)
Merger notification and review provisions (Civil)
3. Abuse of Dominant Position / Monopolization (Civil)
6. 6 Industry Regulation What happens when an industry regulatory scheme overlaps or collides with the Competition Act?
7. 7 The Regulated Conduct Defence Jabour v. Law Society of British Columbia
If provincial or federal legislation gives a person or a body certain powers to do things they cannot be found to be violating the Competition Act if they are merely exercising those powers.
8. 8 Does the Competition Act apply to firms in regulated industries? Does the fact that a group of shippers are meeting together to try and agree on the terms and how much they are willing to pay pipeline companies to carry their product raise issues under the conspiracy provisions of the Competition Act?
Given that the NEB or EUB have powers to set tariffs and terms of carriage can the Commissioner block a pipeline merger because it is likely to result in a substantial prevention or lessening of competition?
eg. R. v. Canadian Breweries
9. 9 Recent Competition Bureau Information Bulletin on Regulated Conduct Defence The Competition Bureau recently published an Information Bulletin on the Regulated Conduct Defence. The Bureau said that the purpose of the Bulletin was to outline and clarify the Bureaus position with regard to the case law on the regulated conduct defence. A footnote cautions the reader that the Bulletin is only for information and not a substitute for advice of legal counsel.
10. 10 Implications of the Information Bulletin While Information Bulletins that set out the Bureaus position on enforcement matters are helpful, this one on a number of points does not accurately reflect the principles which the Courts have enunciated.
11. 11 Summary of how Regulated Conduct Defence will apply 1. Where a statutory body has been given powers expressly or by implication to engage in certain conduct which may be contrary to the Competition Act, the regulated conduct defence will apply and preclude the application of the Competition Act.
12. 12 Summary of how Regulated Conduct Defence will apply (contd.) 2. Where firms carry on business in a regulated industry, the regulated conduct defence will apply if obeying a mandatory regulatory scheme results in a violation of the Competition Act. Whether the approval of a merger by a regulator such as the CRTC exempts the application of the merger or any other provisions of the Competition Act is an issue that has yet to be resolved. Each case will turn upon the specific statute or regulation in issue.
13. 13 Summary of how Regulated Conduct Defence will apply (contd.) 3. The extent to which firms are regulated may be a factor relevant to elements of an offence or a reviewable matter such as whether in light of the regulatory oversight, the industry participants conduct can result in an undue or substantial lessening or prevention of competition. For example in a pipeline merger case that is being reviewed by the Competition Bureau, the parties will argue in their submission to the Bureau that the regulatory backstop provided by the NEB or the EUB is such that the merger could not result in a substantial prevention or lessening of competition.
14. 14 Is there a need to reform the legislated conduct defence? The Competition Act is primarily economic legislation. Its principal objective is (or should be) economic efficiency.
Other provincial and federal statutes which create regulatory schemes do not necessarily have efficiency as primary goal:
Agricultural marketing boards ? support producers interests.
Professional bodies ? protect public and integrity of profession
EUB and NEB ? energy conservation, conflicts between surface and mineral or pipeline owners, environmental concerns
General recognition by government that competition when workable is preferable to regulation.
Considerable uncertainty over scope of regulated conduct defence.
15. 15 CONCLUSION Because the Competition Act is primarily economic legislation, judge made law may not be the best place to develop the principles and perhaps it is time to deal with the regulated conduct defence by way of study, consultation and amendments to the Act.
