A framework for market studies
Recent legislative changes have expanded the Competition Bureau’s authority to gather information. In response, the CBA has recommendations to ensure those new powers are exercised responsibly.
In a nutshell
With the passage of the Affordable Housing and Groceries Act in December 2023, the Competition Bureau has enhanced powers to collect data to produce market studies. The CBA’s Competition Law and Foreign Investment Review Section proposes five recommendations to ensure proper guardrails and confidentiality protections are in place.
Key recommendations
- Collaborative information gathering:
- In its Market Studies Information Bulletin, the Bureau should clearly state that it will work with relevant stakeholders to find voluntary solutions for information gathering.
- Compulsory powers should be used only as a last resort.
- Information targets must be given the opportunity to participate in the process.
- The Bureau should provide additional detail on how it will make request information requests to market participants.
- The Bureau’s bulletin should set strict guardrails on the types of information the Bureau can seek.
- The Bureau should clarify the due process safeguards that the Bureau will follow
- The revised guidelines should provide additional confidentiality assurances.
Compulsory powers
The CBA Section notes with approval that the revised Bulletin confirms that a market study is not an enforcement tool and does not allow the Bureau to seek penalties or legal remedies through the courts or from the Competition Tribunal.”
However, if misconduct is discovered during a market study, the Bureau can conduct an investigation and take enforcement action.
Notably, the Bureau will have the power to compel “stakeholders to provide specific records, data, or oral and written responses under section 11 of the Act to aid its analysis for a market study” – powers previously reserved for formal investigations.
While such orders are potentially useful to gather needed information, the CBA Section stresses that they can also impose significant burdens and costs on businesses. The Bureau should therefore clarify it will “work with relevant stakeholders to identify reasonable and voluntary solutions” and not use those orders as a primary form of information gathering but only when necessary.
Safeguarding due process
The revised Bulletin states that information collected during a market study may later serve as the basis for an enforcement action. The CBA is concerned that this could raise due process issues, as there are no specific parliamentary restrictions on this use.
To address these concerns, the CBA Section recommends that:
- The Bulletin should be amended to ensure that if an investigation is launched based on market study information, the Bureau will immediately stop seeking further information under that study and any related orders.
- The target of an investigation should be informed as soon as the investigation begins, allowing them to protect their rights and access the information collected.
Read the submission.
