OTTAWA — Canada’s competition law is overdue for a review, according to the regulator charged with enforcing it. Governments in the U.S., U.K. and Europe are updating their antitrust rules to reflect an economy that is increasingly digital, and policymakers seeking to drive innovation and productivity here should follow suit, said commissioner Matthew Boswell. “Fundamentally, competition is the best protection that the Canadian public has in the modern economy.”

The country’s last major review of competition policy concluded in June 2008; while it acknowledged technology’s “rapid transformation” of the global economy, the panel conducting that evaluation proposed few measures to address then-nascent digital markets.

The current Liberal government has taken some early steps on antitrust. In May 2019, then-innovation minister Navdeep Bains released a high-level digital charter promising to “ensure fair competition in the online marketplace.” In an accompanying letter, he also instructed the Competition Bureau to work with Innovation, Science and Economic Development Canada (ISED), the ministry that oversees it, to assess the Competition Act and the bureau’s current powers in light of “technological advancement and digitalization” as well as “emerging data monopolies” and other trends. And April’s federal budget allocated the agency an extra $96 million over five years for its enforcement capacity and tools.

“We don’t hold the actual pen on the legislation [or] determine the overall approach of [federal], provincial, municipal [or] territorial governments in terms of how they fit competition into their approach to the economy,” Boswell said in an interview with The Logic last week. “We advocate.” 

In a speech to a Canadian Bar Association conference last month, he expressed concern about the “high bar” for preventing anti-competitive mergers domestically—including the unique-to-Canada defence that such a deal should be allowed if it will produce major efficiencies, despite its other negative consequences—and suggested the country follow other countries’ modernizing regulatory moves. He also cited criticism that the maximum fines and penalties the bureau can impose are too small to make a difference to large digital firms, which see them as “merely the cost of doing business.”

In the interview, Boswell said he was advocating for “a comprehensive review” of the act, as well as for all levels of government to “really look hard at competition as a key driver in the economic recovery [and] a force that can drive companies to do better.”

While the bureau is set to receive a cash injection, the commissioner and some policy experts have called for the federal government to further strengthen its investigative and enforcement powers. 

For example, antitrust agencies in other countries can study sectors rather than specific firms, compelling companies to provide information even if there’s no suspicion of rule-breaking practices and making recommendations to policymakers. In November 2020, the U.K. government announced it would set up a regulator to enforce a new code for large tech platforms like Facebook and Google that sell digital ads, following a Competition and Markets Authority (CMA) review of the space. 

The CMA’s use of its market-study powers has “significant benefits in terms of economic activity in the United Kingdom,” according to Boswell, who repeated his previous calls for the bureau to be given similar abilities, albeit with “good-sense” limits on timelines and scope. “In an old bricks-and-mortar economy, it was much easier for [regulators] to understand how things operated and where there could be problems,” he said, noting that in a digital world, it’s more difficult to determine how algorithms, for example, are affecting competition on and between platforms.

The government is “looking at [whether] we can bring forward legislative amendments that might improve” the Competition Act, but discussions are still early-stage, said a senior official, to whom The Logic granted anonymity because they were not authorized to speak publicly. 

Policymakers in other countries are acting on digital antitrust issues. In July, U.S. President Joe Biden issued an executive order designed to spur competition, including greater scrutiny of tech firms’ mergers and data accumulation, while senators have proposed bills designed to restrict online platforms from favouring their own products. The EU is also considering legislation to significantly increase fines and give regulators the power to break up non-compliant conglomerates. 

In Canada, the federal government has a “digital blueprint, which [is] nothing—it’s all  aspirational statements,” said Jennifer Quaid, vice-dean of research in the civil-law section at the University of Ottawa. “We are not doing much in the way of concrete things.” Canada is already starting from a position of weakness, with less interventionist law and enforcement and “a high tolerance for economic concentration,” she said. Some competition lawyers have also argued that the bureau is reluctant to pursue cases, particularly those it might lose.

Competition modernization is unlikely to be a top-tier legislative priority for the re-elected Liberal government, noted Quaid, who said policymakers need to think about the links with other digital regulation issues such as data protection. Bill C-11, Ottawa’s proposed overhaul of consumer personal information rules that died when the election was called, contained provisions allowing coordination between the privacy and competition commissioners.

“We recognize that our economy is changing with the growth of the digital economy,” said John Power, a spokesperson for Innovation Minister François-Philippe Champagne, adding that the Competition Act’s purpose includes promoting “the efficiency and adaptability of the Canadian economy,” and the government will “always consider potential opportunities” for legislative measures that help achieve that.

Boswell said the bureau has been working with ISED since May 2019 on the issues identified in Bains’s letter and making the department aware of how other governments are approaching competition issues involving tech platforms. “There is an ever-growing need for greater international cooperation in digital investigations,” he said in last week’s interview, citing discussions on an OECD call of competition regulators that same morning. “That’s going to require changes to framework laws about sharing information in many countries around the world [where] multiple, similar investigations [may be] going on.”

Under Boswell, appointed in March 2019, the bureau has increased its focus on digital-market issues, and conducted several investigations of Silicon Valley tech giants’ business practices. In May 2020, it announced a compliance agreement with Facebook over third-party developers’ access to user data, which included a $9-million fine. That August, it solicited input from independent sellers as part of an investigation of Amazon. And last month, it won a court order to compel Google to provide information for an investigation of YouTube’s ad-sales practices.

In each case, authorities in the U.S. or EU had already announced or concluded similar probes. Some policy observers have called the bureau a “second mover,” drafting off peer regulators’ successes. Boswell disputed that characterization, noting that the agency doesn’t disclose when it starts investigations, which instead may become public when it seeks court orders.

While international cooperation is important, Canada can’t rely on other countries to solve its competition problems. “We can’t just outsource it and hope that whatever remedy is arrived at in another jurisdiction will be implemented [here],” he said, citing a January 2017 consent agreement with Amazon over its local-price advertising, the changes from which the e-commerce giant applied to its sites for other countries, as well. “We have to protect competition and the businesses that might be impacted by anti-competitive conduct in Canada.”