Remarks by John Pecman, Commissioner of Competition
New Delhi, India
November 21, 2013
(Check against delivery)
Theme: The Canadian Experience
It’s a pleasure to be attending my first BRICS conference and to be visiting India for the first time. I want to thank my friends from the CCI for hosting this important conference, and for their warm hospitality.
As I noted, it is my first time in India and I have to say that — and I know this is not new to any of you — I have been lamenting the amount of traffic in New Delhi. So I asked my taxi driver: “how do you drive in this?”
His response: you need good brakes, a good horn…and good luck. And it struck me that it’s not that much different for competition law: you need a good law, good enforcement, good advocacy and everyone needs good luck!
Based on my meetings earlier this week with the CCI, the business and legal communities, it is apparent that the CCI has made significant progress in all three guideposts:
- With a modern law and ongoing revisions including a sophisticated merger control regime;
- With significant enforcement cases under the abuse of dominance and cartel provision, most notably imposing significant economic penalties on the top 10 cement companies for cartel behaviour; and,
- By hosting important competition law events like the BRICS conference which is a great start on advocacy because it raises awareness of India’s great progress on the international and domestic scene.
Today, I am going to briefly touch on the Canadian competition law experience before moving to discussing the balance between enforcement and advocacy following legislative reform; procedural fairness and institutional design; and will cap it off with the importance of promoting compliance — which is the ultimate goal for all agencies.
It’s not news to anyone in this room that our future is being shaped on many levels by the forces of globalization, innovation and deregulation.
Indeed — across the globe, governments are striving to ensure that competition policy is able to meet these challenges.
Responding to these forces is not new territory for Canada.
Canada, in fact, has a proud history where competition law is concerned: we carry the honour of being the first country to pass competition legislation.
Canada’s legislation was enacted in 1889, one year before the United States passed the Sherman Act.
Apologies to our good friends from the U.S. delegation, but a young country like Canada has to claim these victories where it can.
While Canada’s Competition Act has evolved significantly since that time, the lessons that we have learned over the past 120 years remain extremely pertinent. And, I’m going to talk a little about them now.
Much has changed in 120 years — new legislation was passed and amended on a number of occasions and, in 1986, our current statute, the Competition Act (the Act), was introduced.
The Act has seen numerous amendments since 1986, the most recent of which were in 2009.
During this time, our legislation has evolved to meet the challenges of a changing marketplace, and each time we received new amendments, it was incumbent on us to test the amendments through enforcement.
And so, following every major amendment or introduction of new legislation, the Bureau has shifted to an approach that is primarily focused on enforcement actions, in order to test the new framework.
This shift in approach toward enforcement, immediately following any modernization or improvement in legislation, is critical. It builds case law, clarifies what is prohibited under the new law and develops enforcement experience.
Once legislation has been tested, case law has been established and an agency has confirmed its enforcement powers and the scope of any new legislation, one can then move toward a fully integrated enforcement model by placing an even greater focus on advocacy.
The Bureau’s advocacy mandate is enshrined in our Act which includes provisions that enable the Bureau to advocate before federal and provincial regulatory boards, commissions or other tribunals.
In the past, we have exercised our advocacy role by:
- Making recommendations regarding the impact of proposed policies and regulations on competition;
- Providing advice to government on matters related to competition; and
- Carrying out, on an informal basis, market studies in certain sectors of the economy.
The impact of advocacy cannot be overstated. Indeed, advocacy can have as much — and in some cases more — impact than enforcement in ensuring competition in the marketplace.
Now, we can envision approaches to competition enforcement as a pendulum which swings back and forth between enforcement and advocacy, with the ideal approach being somewhere in between.
However, many competition authorities struggle to achieve the right balance between the two.
In Canada, now that we are four years from the last legislative amendments, we have begun to shift our focus back toward what we believe is a more balanced approach that I call compliance promotion, which includes advocacy, awareness, prevention and enforcement.
Before I move on, I want to speak briefly about the importance of justice, procedural fairness and due process and the important role they play in establishing, maintaining and enhancing the credibility of our competition institutions.
In Canada, the Charter of Rights and Freedoms guarantees a broad range of legal rights for all citizens, and, in so doing, sets standards for investigations and criminal prosecutions.
From a competition law perspective, this means that we must follow a number of prescribed rules, including:
- Ensuring that searches and seizures are pre-authorized by a court;
- Advising individuals of their right to counsel;
- Ensuring a right against self-incrimination;
- Guaranteeing the entitlement of individuals to full disclosure of the case against them; and
- Trying cases in a reasonable amount of time.
While the benefits of due process are numerous, the system is not without its challenges.
Since the Charter came in to force in 1982, and case law developed, the Bureau has had to continually adapt to ensure that our activities are consistent with the Charter.
While we are certainly better for it — there is no doubt that we are continually working to maintain these standards and re-engineering our investigative procedures to improve efficiency.
Procedural fairness extends to civil cases, as well.
In Canada we have a bifurcated agency model for addressing mergers and dominant firm conduct wherein the Bureau investigates and may then file an application with the Competition Tribunal for a remedy.
The Tribunal is a hybrid body comprised of judges and expert lay members and has power to examine witnesses and to enforce remedies.
The Tribunal’s process is designed to be informal while ensuring a fair process.
In recent years, the Tribunal has taken numerous steps to reduce the duration of its proceedings while maintaining that balance.
Tight schedules are set at the beginning of proceedings and delays or adjournments are rarely granted.
In contested hearings, a "chess clock" approach imposes a maximum time for each party.
All witness evidence must be pre-filed and procedural issues are routinely resolved by letter rather than formal proceedings before the Tribunal.
Intervention by third parties is limited. Through these steps, the Tribunal strives to meet its commitment to issuing timely decisions.
Despite the fact that due process adds to the challenges in preparing a case, it is my belief that these high standards have bolstered the credibility of our cases and our institution.
They have also made certain that investigations and process are subject to a level of scrutiny that ensures that the principles of justice have been respected.
As I close, I want to take a moment to touch on our approach to compliance and to working with the business community in Canada.
In Canada, we treat compliance as a shared responsibility between our enforcement agency, the business community and the legal community.
- The Bureau promotes compliance through a range of tools, which include issuing publications, advocacy, suasion and enforcement.
- The legal community promotes compliance through advising their clients of their obligations under the Act.
- And, the business community promotes compliance by developing and enforcing, credible and effective compliance programs.
I believe very strongly in this sort of approach, as it enables us to together achieve immeasurably more in the way of compliance than we ever could alone.
And, preventing anti‑competitive conduct before it inflicts damage to the economy is significantly more cost effective than enforcement proceedings.
So, while it is important to have in place flexible legislation that can adapt to a changing economy, to keep abreast of developments in the economy and to provide regular guidance to the business community, perhaps the most important piece is having an open dialogue with your partners.
Engaging the business and legal communities in the development of policies, practices and procedures is the key to getting it right.
In Canada we strive to achieve this through a number of means, including:
- By providing outreach to stakeholders in the business community;
- By hosting workshops with industry representatives;
- Through consultation processes;
- Through a formal consultation arrangement with the Canadian Bar Association; Competition Law Section; and,
- By committing to a policy of predictability and transparency.
Our collaboration is also not limited to the business and legal communities, but extends to our domestic enforcement partners and international counterparts. Many of these have been formalized through memorandums of understanding and cooperation agreements.
If I can leave you with one thought, it is that this collaboration piece is critical to developing effective policies, practices and procedures, as it relates to competition.
Thank you for your time and attention. I look forward to hearing your questions and comments.
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