The Interview

Canada’s competition watchdog talks enforcement during a pandemic

Matthew Boswell. C.D. Howe Institute
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Matthew Boswell spent the past year investigating Amazon and Facebook and going toe to toe with the country’s largest telecoms. 

While the pandemic has created some hiccoughs for Canada’s competition commissioner, he has no intention of letting it slow him down long term. 

Talking Point

In an extended interview with The Logic, Boswell discussed his plans for competition enforcement during a pandemic including letting certain companies work together to deliver vital supplies, new enforcement techniques and what long term success will look like.

Boswell is transforming the regulator as quickly as he can, using new tools like robotic process automation and by hiring data analysts, to get ready for the fights to come. The Amazon investigation is at an early stage, years behind a European one looking into the same issue. U.S. and European regulators are generally well ahead of Canada when it comes to antitrust investigations into tech giants—but it isn’t just tech where Boswell is trying to catch up. 

In an extended interview with The Logic, Boswell discussed what he’d change about the Competition Act, the bureau’s progress on its digital strategy and how he’s been enforcing competition rules during a pandemic.

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This interview has been edited for length and clarity.

How have things changed at the bureau since the pandemic?

We were pretty well positioned to convert to remote work almost seamlessly. There are some aspects of our work that are significantly challenged, like executing search warrants if we’re doing a criminal investigation. We’re not doing that right now.

You’ve asked the Canadian Radio-television and Telecommunications Commission (CRTC) to require big telecoms to sell network access to small ones in a bid to lower internet prices for Canadians. The large telecoms have objected. Do you think your recommendations will be followed? 

I have no idea. We had a small but mighty team that did a lot of work on developing our submissions. Our submissions were based on the evidence out there. We’re an objective third party in the CRTC hearings. We put forward what we think was appropriate in terms of recommendations based on evidence, and it’s not up to me to say how the matter will be decided one way or the other.

One thing that many economists talk about—and maybe you don’t agree—is that Canada is characterized by a lack of competition in some pretty big sectors—like telecoms, for example, we have three main companies. For banks, we have six. How do you see it?

There’s clear evidence that we have relatively high corporate concentration rates in Canada, and there’s aspects of that that are structural within our economy. To go back to the CRTC MVNO [mobile virtual network operator] hearings, there are regional wireless competitors that our report indicated are making a difference in terms of competition in certain parts of the country. That’s why we advocated for a facilities-based MVNO strategy towards the CRTC, which ultimately would lead to competitors in additional markets in the country. So more competition. We’re making those submissions where we can.

Last year, you asked companies to contact the bureau if they’d seen anti-competitive practices in areas like online search, and social media. What’s the response been like?

We have had multiple parties come and speak to the bureau in response to that particular callout in September 2019.

Are there any changes you’d like to see to the Competition Act?

One that’s obvious is the administrative monetary penalties, or the criminal fines that are available under the act. I believe that stronger financial penalties would assist in driving compliance with the law.

In August, you announced an investigation into Amazon regarding its relationship with companies that sell on its platform. Shortly after, The Logic reported on three class-action lawsuits against Amazon raising concerns about the same thing. Has the Competition Bureau received any information from the people involved in the class-action lawsuits? 

I can’t comment on ongoing matters.

In 2019, you hired IBM executive George McDonald to overhaul the way the bureau investigates the digital economy. We’re about 15 months in. How’s that going?

It’s going great. George has brought a totally new perspective to the bureau. He’s developed a comprehensive digital strategy for the bureau that’s been embraced throughout the organization at all levels. Our employees are really into it. 

We have something we call the Bureau Innovation Garage, where we’re using various software programs to work through process challenges that we have in the organization. We’ve implemented some changes internally using digital tools like robotic process automation. 

We’ll probably be doing more of that. It really is this shift of mindset to digital by design, scanning the landscape for all the tools that are out there and finding the best ones. There’s more and more conversation in terms of cooperation and collaboration between enforcement agencies around the world. If one agency develops some sort of investigative tool that’s digital, and they’re willing and able to share that piece of software with others, then there’s more talk of that in the international competition community.

You created a merger-intelligence notification unit and a criminal intelligence unit within the cartels and deceptive marketing division since taking over as commissioner. Are those new units working out the way you wanted them to?

We’ve seen some very positive developments there. I think it aligns with a longer-term vision that we have to be a more proactive enforcer of the law and to use all the tools at our disposal to create and, ultimately, fully staff up these intelligence units as part of that proactive approach. You’ve seen other other examples of our more proactive approach. We obtained interim consent agreements into matters in deceptive marketing, which was something that hadn’t been done before—which was to halt what we said was harm to the public in the interim—while we pursue our investigations.

Are you looking to bring in more staff with experience working for tech firms to beef up your efforts?

We’re looking to, at least incrementally, diversify our traditional workforce. We have a lot of very strong economists and people with legal backgrounds. But we’re looking to diversify a bit and look at data scientists and people with strong data and digital backgrounds. 

In April, the Competition Bureau said it would allow companies that normally compete with each other to work together temporarily due to the pandemic. What prompted you to make that shift, and what’s the response been like from industry?

We were seeing and hearing significant concerns about the need for competitors to work together to make sure that supply chains were working in the short term to respond to the crisis. It was a time when there were serious concerns about shortages of all sorts of products in the economy. 

I can’t give you a number in terms of how many companies collaborated that wouldn’t have otherwise, since there wasn’t an obligation to tell us about it. There was an offer for companies to contact us if they wanted additional information or guidance from the bureau on that. We didn’t receive a lot of requests in that regard.

When will you lift the emergency guidance and go back to the regular rules?

We’re leaving them in place likely throughout the balance of the calendar year. We’ll continue assessing it as we monitor what’s going on in the economy at large. If we see a return to more strict rules, akin to the lockdown in the spring, then we’ll likely leave that guidance out there.

Is there anything else that you want people to know?

We set up a special temporary group of deceptive-marketing-practice folks to monitor for false and misleading representations related to COVID. We’ve had a surge in COVID-related complaints since March. We’ve issued over 100 compliance warnings to businesses across Canada to stop these false and misleading claims. We’ve issued warnings to businesses saying their air filters or air purifiers will filter out the virus, herbal remedies—there’s a whole spectrum of claims and products that we’ve warned companies about.

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And the good news is when we warn these companies, the vast majority have taken corrective action immediately to either change the marketing claims, or others have pulled products from shelves entirely. In a year-over-year comparison, we had double the complaints on deceptive marketing practices between April and June.