‘A new era of competition enforcement’

Competition Commissioner Matthew Boswell has told the country’s top competition lawyers to “buckle up” and expect to face “a more aggressive and active enforcer” as the Competition Bureau puts recent sweeping changes to the Competition Act into action.

“This is a new era of competition enforcement,” he told the CBA’s Fall Competition Conference in Ottawa, his first major speech since the last tranche of changes to the Act was passed by Parliament in June.

Despite pushback from big industry and grumbling from many competition lawyers about the speed and the breadth of the changes, Boswell insisted the reforms were overdue and had strong public backing.

“The broad consensus on the need for reform isn’t new. The sense that Canada must do more to foster competition has been on everyone’s mind for quite a while.”

He noted that the changes included in omnibus bills passed in 2022, 2023 and 2024 received unanimous support from all parties in the House of Commons.

Boswell said the new Act essentially means Canada is catching up to major jurisdictions like the US, the European Union and Australia in fighting economic concentration.

“This puts an end to what was . . . as one of my predecessors described it, ‘the weakest merger law among all of our peer countries.’”

Boswell himself has been the biggest backer of the changes, first calling for a comprehensive review of the Act three years ago. He’s obviously pleased with the outcome but also made an effort to reassure his audience that the changes were not extreme.

“The new era of competition enforcement is best thought of as generational change, rather than radical” change, he said.

Major amendments to the law include the criminalization of wage-fixing, a sharp increase in fines, the scrapping of the old efficiencies defence, and strengthened rules on market dominance, drip pricing, and greenwashing claims.

Boswell was specific about what he thought lawyers should expect from the Bureau under the new Act.

1. Expect to see more enforcement action. He said the Bureau will take more enforcement actions, augmented by cases taken under expanded private actions included in the law. “This means that anti-competitive conduct won’t be slipping through the cracks as it used to."
    
2. Expect to see faster enforcement. Boswell expects the law's streamlined nature will allow the Bureau to investigate cases faster, eliminating pages of math formulae previously included in merger testing in favour of more common-sense determinations.
    
3. Expect stronger remedies. The new law brings in higher maximum fines and penalties, and private applicants can seek financial redress through private access to the Tribunal. “This means the days of pennies-on-the-dollar penalties are over,” Boswell said.
    
4. Expect more people-focused enforcement. The Act is now more focused on what Canadians need from the law by opening the door to public-interest groups launching cases, recognizing the importance of competition to workers through wage-fixing offences and better consumer protections against deceptive marketing practices.

When it comes to mergers, Boswell said that nothing will change for the vast majority of non-complex transactions. They will be cleared quickly. He noted that there are about 3,000 mergers a year in Canada, and only about 200 are notifiable.

Under the new law, more mergers will be subject to pre-merger notification. Whenever the Bureau applies for an injunction, a merger won’t be able to close until the injunction is decided.

“You can expect much more healthy skepticism about proposed mergers in concentrated sectors,” Boswell warned, adding the Bureau will come down hard on “ill-conceived deals” that threaten competition.

“In this new era, those ideas should never leave the boardroom."

And while “it’s not bad to be big,” provided that companies grow by innovating and competing fairly, he said the new rules will allow the Bureau to define rules and propose “meaningful penalties for violations.”

Boswell also promised more vigorous enforcement when it comes to deceptive marketing practices. He cited as an example the recent record $38.9 million fine imposed on Cineplex Inc. by the Competition Tribunal for misleading cinema patrons by not fully disclosing the full price of movie tickets purchased online.

The movie chain failed to include a $1.50-a-ticket service change in its pricing. Cineplex is appealing the ruling.

Boswell said the fine, made possible by changes in the law increasing maximum penalties, sends “a strong message that businesses should not engage in drip pricing and must display their full prices upfront whenever additional fees are mandatory.

As for the new provisions on greenwashing, he noted the Act has long prohibited such misleading claims, noting that Keurig Canada agreed in 2022 to pay a $3-million penalty for false claims about the recyclability of its single-use coffee pods.

Later, during the question and answer period, Boswell pushed back when it was suggested that some sectors of the economy, including the energy industry and grocers, have been targeted by some of the amendments.

“The greenwashing provision is not sector-specific. It applies to any environmental claims that could be made by any sector of the economy.”

He reassured the audience that some things were not changing, that the competition regime did not amount to sector-specific regulation and wasn’t a price control system. The Act remains subject to due process and strict evidentiary requirements that are designed to assure fairness and eliminate cases that have no merit.

Moving forward, Boswell said the Bureau will soon launch a comprehensive review of its merger enforcement guidelines. A discussion paper will be published in the coming weeks, followed by a draft of revised guidelines and a request for input from stakeholders.

The Bureau is also consulting on the environmental deceptive practices provisions and is inviting feedback. When it comes to expanding private enforcement of the Act, which gives private parties, including public-interest groups, much broader access to launch cases, there are plans to update the bulletin of private-access proceedings in light of these changes.

Boswell concluded by saying that the changes to the Act were “long overdue.”

"It is now my role as commissioner of competition to see them implemented in a way that meets the high expectations of Canadians and Parliamentarians.”