In his first published remarks as Interim Commissioner of Competition, John Pecman discussed a number of competition-related issues, underscoring the importance of compliance programs, the competition risks associated with participation in trade associations, and the Bureau’s key enforcement priorities going forward.

Mr. Pecman, who was appointed Interim Commissioner on September 26, noted the increasing international prevalence and cooperative enforcement of competition law. He also emphasized the seriousness of cartel activity, referring to Chief Justice Crampton’s remarks in the case against Maxzone Auto Parts, where Mr. Justice Crampton likened cartel agreements to fraud and approved incarceration as an effective deterrent.

For much of his speech, the Interim Commissioner focused on the importance of effective corporate compliance programs. In his view, compliance programs reduce the risk of criminal or civil liability, increase awareness of competition issues amongst market participants, and aid transgressing parties in their dealings with the Bureau (especially with respect to the Bureau’s Leniency Program).

Mr. Pecman indicated that the mere existence of a compliance program on paper does little to ensure actual compliance with the Competition Act. Rather, in his view, “the issue is internal enforcement[.]” He explained that a credible and effective corporate compliance program includes five elements: (1) senior management’s involvement and support; (2) legally and commercially up-to-date compliance policies and procedures; (3) ongoing and meaningful employee education and training; (4) monitoring, auditing, and reporting mechanisms that maintain program integrity; and (5) consistent disciplinary procedures and incentive components (e.g. incentives for whistleblowers).

Of particular note was Mr. Pecman’s discussion of compliance concerns related to trade associations. Highlighting several of the Bureau’s recent investigations into trade association activities, Mr. Pecman observed that, by their very nature, these organizations face “unique compliance issues.” In his words, “[Trade associations] are naturally exposed to greater risks of anti-competitive behavior because they provide a forum that may encourage competitors to collaborate.”

Mr. Pecman identified three types of conduct by trade associations that are likely to raise concerns and attract the Bureau’s scrutiny. First, the Bureau is concerned with restrictions on professional service offerings (for example, the imposition of limits on office location or size) because such restrictions can deter or limit expansion by competitors. Second, a trade association should not limit the number or range of its members or inhibit their ability to compete (for example, by imposing fee schedules). Such rules prevent entry and restrict the emergence of alternate service models to the detriment of consumers. Third, the Bureau is concerned with conduct that reduces incentives to compete vigorously, such as agreements to share sensitive information. For those interested in more information regarding Competition Act compliance in respect of trade associations, counsel at Stikeman Elliott provides regular compliance seminars on the topic. 

The new Interim Commissioner announced that the Bureau’s general priorities remain the same under his leadership: (1) achieving results for Canadians through active, targeted and principled enforcement; (2) applying Canadian competition law in a progressive and transparent way to keep pace with the dynamic marketplace; and (3) cultivating a strong and agile enforcement capacity. The Interim Commissioner also clarified that in deciding whether to pursue a case, the Bureau evaluates the harm to competition; the potential for deterrence; the Bureau’s resources and priorities; and whether the case raises issues that have an effect on average Canadians.