INDU Committee Report
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CHAPTER 1:
competition and competition policy in context
The Government of Canada should re-evaluate the minimum thresholds for reviewing a merger, and, if found unsatisfactory for the optimal enforcement of the Competition Act, might give further consideration to resetting them accordingly.
The Government of Canada provide the Competition Bureau with the resources, including financial, necessary to ensure the effective enforcement of the Competition Act.
CHAPTER 2:
conspiracies and other horizontal agreements
The Government of Canada, after consulting with stakeholders, consider the feasibility of creating a two-track approach for agreements between competitors. The first track under consideration would be to retain the conspiracy provision (section 45) of the Competition Act for agreements that are strictly devised to restrict competition through reducing output and raising prices (i.e. hardcore cartels). The second track under consideration would deal with any other type of agreement between competitors in which restrictions on competition are ancilliary, under a modified abuse of dominant position provision (section 79) of the Competition Act.
The Government of Canada, after consulting with stakeholders, should study the impact of repealing the term "unduly" from the conspiracy provision (section 45) of the Competition Act.
The Government of Canada should undertake a complete economic and legal analyses of proposals for modifying the abuse of dominant position provision (section 79) of the Competition Act with a view to include either a test that considers whether an agreement between competitors would "lessen competition substantially" or an explicit defence in which resulting efficiencies would be weighed against the anticompetitive effects of such an agreement.
CHAPTER 3:
predatory pricing and behaviour
The Government of Canada, after consulting with stakeholders, should consider amending paragraphs 50(1)(b) and 50(1)(c) of the Competition Act by replacing the phrase "or designed to have that effect" with the phrase "and designed to have that effect." In this way, the criminal predatory pricing provisions would require evidence of both "pricing below cost" and the intent of "lessening competition or disciplining or eliminating a competitor."
The Government of Canada, after consulting with stakeholders, consider adding a new predatory pricing provision in the reviewable civil section of the Competition Act, possibly to be made applicable to the abuse of dominant position provision (section 79). The Government of Canada should also give consideration to ensuring that both the alleged predator has "market power" and the practice in question would "lessen competition substantially." Consideration should be given to introducing new enforcement guidelines for predatory pricing under the abuse of dominant position provision.
The Government of Canada should study the impact of amending section 78(i) to state: "selling products at a price lower than average variable cost for the purpose of disciplining or eliminating a competitor."
CHAPTER 4:
price maintenance, delivered pricing and
refusal to deal
The Government of Canada, after consulting with stakeholders, should consider amending the Competition Act with respect to price maintenance (section 61) to distinguish between those that are anticompetitive and those that are efficiency-enhancing. Price maintenance practices among competitors, whether manufacturers or distributors, should remain in the criminal section of the Competition Act, possibly to be shifted to the conspiracy provision (section 45). Price maintenance agreements between a manufacturer and its distributors might best be moved to the reviewable civil section, possibly to be made applicable to abuse of dominant position provision (section 79). This provision should also ensure that both the person in question has "market power" and the practice in question would "lessen competition substantially."
Should the Government of Canada act on the Committee’s previous finding, the Competition Bureau introduce new enforcement guidelines with respect to abuse of dominant position (section 79) in relation to price maintenance agreements between a manufacturer and its distributors, including the analytical framework for the assessment of market power and competitive effects. Consideration should be given to introducing enforcement guidelines for conspiracies (section 45) that relate to price maintenance agreements between manufacturers or distributors under section 61.
Should private individuals be permitted to make application to the Competition Tribunal for relief in matters involving civil review, the Government of Canada should consider amending the delivered pricing provision (section 81) of the Competition Act to ensure that the practice in question would "lessen competition substantially."
Should private individuals be permitted to make application to the Competition Tribunal for relief in matters involving civil review, the Government of Canada should consider amending the refusal to deal provision (section 75) of the Competition Act to ensure that the practice in question would "lessen competition substantially."
CHAPTER 5:
price discrimination
The Government of Canada, after consulting with stakeholders, in particular with representatives of small businesses, should consider repealing the price discrimination provisions (sections 50(1)(a) and 51) of the Competition Act and include that prohibition under the reviewable civil section, possibly to be made applicable to the abuse of dominant position provision (section 79). The Government of Canada should also give consideration to ensuring that both the person in question has "market power" and the practice in question would "lessen competition substantially." Consideration should also be given to expanding the coverage of the provision to govern all products, including articles and services, and all transactions, not just sales. Consideration should be given to introducing enforcement guidelines for price discrimination under the abuse of dominant position provision.
CHAPTER 6:
private rights of action
The Government of Canada give further consideration, in consultation with stakeholders, to enacting legislative changes necessary to permit private individuals who have been prejudiced in the conduct of their business by anticompetitive conduct to make application to the Competition Tribunal
for relief in matters involving civil review. The issue of the relief available to private litigants, whether in the form of injunctive relief or damages, or both, may also be the subject of further consultation.
CHAPTER 7:
interim cease and desist powers
The Government of Canada, in consultation with stakeholders, give further study and consideration to amending section 100 of the Competition Act and (other sections in consequence thereof) to apply to matters civilly reviewable by the Tribunal in respect of which an inquiry has been commenced under section 10(1), or in respect of which an application has been commenced by a private party consistent with finding no. 14.
CHAPTER 8:
the newspaper industry, a diversity of views
and the competition act
The Government of Canada, through the Department of Canadian Heritage and other departments, continue to discuss and consider, in consultation with stakeholders, issues of diversity of ownership in the newspaper industry and other information media.