Numerous countries around the world are currently reviewing their competition laws and policies. This review is focussed on both the purpose of competition law generally and whether existing laws are “fit for purpose”, particularly in the context of today’s rapidly changing and highly disruptive digital economy. The debate around these issues has been fierce to say the least, with some arguing that no changes are needed and others, such as U.S. Senator Amy Klobuchar, arguing that U.S. antitrust laws need to be completely overhauled in order to better protect consumers.
Canada is also considering possible amendments to the Canadian Competition Act. In fact, on February 23, 2021, the House of Commons Standing Committee on Industry, Science and Technology passed a resolution agreeing to devote “[a] minimum of four meetings to a study on competitiveness in Canada including … reform of the Competition Act and any other matter relating to competition”. In this regard, according to Member of Parliament Nathanial Erskine-Smith, there is “recognition” across political parties that there are “deficiencies” in the Act and that the Commissioner of Competition “does not have the tools he needs”. MP Erskine-Smith is of the view that, “[a]s the United States moves forward more seriously with a really strong antitrust lens … we need to update our laws and do the same” – it would be a “mistake” for Canada not to “seize this moment”. The Competition Bureau has indicated that it “supports any measure that ensures Canada is equipped with modern legislation and tools that are appropriate for the digital age”.
While no one can quarrel with the need to review competition laws to ensure that they are “fit for purpose”, any such review needs to be fully informed and take into account all relevant information – something that may not be happening today. For example, while many of the issues being discussed in the context of the digital economy are based on a relatively small handful of economics-related papers, Professor Daniel Sokol noted the following during a recent Canadian Bar Association teleconference titled “Economic Issues Involving Platforms, Privacy and the Digital Economy”: (a) that the vast majority of the more than 200 empirical online platform-related papers published from 2000 to 2019 by leading business journals covered other disciplines, such as finance, information systems, management and marketing; (b) that this empirical work looks very different than the economics-related work; and (c) that we need to better understand what the empirical literature tells us, particularly since most papers show pro-competitive results.
While Canada should be paying attention to what is happening elsewhere, it should not blindly follow other jurisdictions as it considers possible amendments to the Competition Act – particularly as it relates to the types of amendments being proposed by Senator Klobuchar, as many of the proposed changes could be harmful to competition, innovation and the economy. Rather, any such amendments should be carefully considered and subject to a detailed policy debate, which includes lawyers, economists, academics, Bureau officials, policy-makers and other relevant stakeholders. Moreover, the discussion should be informed by a thorough review of all relevant empirical literature – not just a small handful of economics-based papers that provide a one-sided perspective. Failing to proceed in this fashion could result in a “cure” that is worse than the perceived “problem” by, for example, creating a regime that unnecessarily limits or prevents pro-competitive or efficiency-enhancing conduct that could otherwise spur innovation – something that, in my view, needs to be avoided at all costs!
If you have questions about the Competition Act or any aspect of this blog post, you can reach out to any member of Fasken’s Competition, Marketing & Foreign Investment group. Our group has significant experience advising clients on all aspects of Canadian competition law.
The information and guidance provided in this blog post does not constitute legal advice and should not be relied on as such. If legal advice is required, please contact a member Fasken’s Competition, Marketing & Foreign Investment group.