On September 20, 2022, the Competition Bureau (the “Bureau”) hosted its Competition and Green Growth Summit (the “Summit”). In a nutshell: while the Competition Bureau did not provide any definitive policy pronouncements or specific directives (as the Summit was structured as a high level discussion on the intersection of competition law, deceptive marketing and sustainability policies), sustainability related matters are clearly an enforcement priority for the Bureau. Among other things, Commissioner Boswell highlighted the need for urgent action in addressing climate change and the increased interest by consumers and businesses in moving towards a greener economy.
The Summit included a diverse set of speakers and three panel discussions: (i) a green future: competition policy and competitiveness; (ii) enforcers roundtable: perspective from competition agencies; and (iii) competition enforcement in a greener economy. Speakers included private competition law practitioners, international competition and consumer protection enforcers, academics, economists and various private stakeholders with backgrounds in environmental policy and competition law. Matthew Boswell, the current Canadian Commissioner of Competition, also delivered opening and closing remarks.
While there were a wide variety of opinions among the speakers, a few themes emerged throughout the day that were of general consensus (with some exceptions):
- Areas of intersection: Three areas were highlighted as being key areas where sustainability issues are likely to overlap with competition issues: (i) deceptive marketing; (ii) competitor collaboration; and (iii) merger review.
- Deceptive Marketing: It was acknowledged that greenwashing (i.e. false or misleading environmental/sustainability claims) is becoming an increasingly prevalent issue, particularly as consumers are increasingly concerned with the sustainability of the products and services they are purchasing.
- Competitor Collaboration: There is a concern that companies may want to engage in beneficial collaboration with respect to achieving legitimate sustainability goals, but may be hampered from doing so by existing competition laws.
- Merger Review: It was acknowledged that mergers have the ability to impact sustainability both positively and negatively. For example, mergers may hamper or undermine the progress of innovative sustainability technologies or may lead to decreased quality in environmental services. On the other hand, overly stringent merger review may, for example, undermine companies abilities to create or grow the green segment of their business through investment in, and acquisition of, existing green companies.
- Existing framework: To some extent, the existing framework under the Competition Act (the “Act”) already has the tools to consider and address sustainability issues. For example:
- Deceptive Marketing: There are existing civil and criminal provisions in the Act that address false or misleading representations. As ‘greenwashing’ is a type of false or misleading representation, it can be addressed under these existing provisions. In fact, there are a number of greenwashing cases that have been brought in this manner in Canada and internationally. For example, Keurig Canada Inc. recently reached an agreement with the Bureau to resolve concerns over alleged false or misleading environmental claims made to consumers about the recyclability of its single-use Keurig® K-Cup® pods.
- Competitor Collaboration: The civil competitor collaboration provisions in the Act are subject to a competitive effects analysis (i.e. a ‘rule of reason’ analysis). Accordingly, competitor collaborations will only be found to be off-side these provisions to the extent they are found to, or be likely to, lead to a substantial prevention or lessening of competition. Competitor collaborations aimed at advancing sustainability goals that do not harm competition will not be found to be in contravention of these provisions.
- Merger Review: Merger review takes into account many factors, including aspects of price, quality and innovation. As such, to the extent a merger leads to an increased cost for sustainable products, decreased quality of sustainability products or reduced innovation with respect to sustainable technologies, these issues are already captured in the Bureau’s existing merger review analysis.
In these (and other) ways, competition law can and does take into consideration many aspects of sustainability.
- Sustainability is not (currently) a stand-alone goal of the Competition Act: Under the existing competition law framework in Canada, sustainability is not a stand-alone goal. Where actions by a firm have an impact with respect to sustainability or environmental issues, this fact alone is not relevant under the Act. Rather, sustainability impacts are taken into consideration only to the extent that such impacts are connected to the economic impacts or other aspects of competitive dynamics which are captured under the Act, such as consumer preference, price, quality, innovation or efficiencies.
- Conflict: There are clearly instances where sustainability and competition goals and policies will conflict. For example, there will be occasions where sustainability policies or regulations have a negative impact on competition in a market, or where competition law and enforcement will have negative impacts on sustainability goals and progress. For example, as noted above, competitor collaborations in same cases may have a large positive impact with respect to advancing sustainable technologies, but allowing such collaboration may also have unintended negative impacts on competition. In this regard, Commissioner Boswell noted that the Bureau wants to ensure that sustainability regulations and policies promote, rather than harm, competition.
- Parliamentary guidance and legislation is required: To the extent that conflicts arise as described above, there is currently no mechanism for a trade-off analysis to be conducted that weighs the respective positive and negative impacts and relative importance of competition and sustainability goals. Any such trade-off analysis, including any suggested “environmental defences” under the Act (which were suggested by some speakers), must come from legislature. Neither the Bureau nor the government environmental agencies and departments are equipped – on their own – to make this analysis. Moreover, as noted above, the Act as currently drafted does not include the power to consider any such trade-off or defence. While engagement with various government agencies (including the Bureau), as well as with other key stakeholders, is required in order to ensure that regulations and policies are designed in the best way possible, direction regarding the balancing of these disparate factors ultimately must come from the legislature.
While the Bureau did not weigh-in on the above matters in most cases, the Summit was, as noted by Commissioner Boswell, primarily an opportunity for the Bureau to learn from various stakeholders and for the Bureau to better understand how the transition towards the green economy impacts competition law (and vice versa). As such, it will be interesting to see how the discussions at the Summit will inform the Bureau’s approach moving forward.