Institutional Design and DecisionMaking Processes in Canadian
Competition Policy
Edward Iacobucci and Michael
Trebilcock
University of Toronto
Road Map
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1) History and institutional design
2) Overview of the statute
3) Overview of institutional structure
4) Critical evaluation of institutional status
quo: Due process norms (Friday)
• 5)Critical evaluation of institutional status
quo: Systemic performance (Saturday)
1) History and Institutional Design
• Canada’s had a competition statute in place since 1889
• But very little activity until 1986 reform
• Passivity of competition enforcement directly related
to institutional design: because of concern about
intruding on provincial constitutional domains, federal
law was entirely criminal
• High burden of proof; adjudication by (sceptical) nonspecialized criminal courts
– E.g., merger that eliminated competition in a market
permitted because Crown could not prove detriment to
public interest
History, cont.
• Reform process began in late 1960s in face of
considerable business opposition; reform not
complete until passage of Competition Act in
1986
• 1986 statutory reform, and recent
amendments in 2009, have shifted emphasis
dramatically to civil from criminal law, with
corresponding shift in institutions
2) Statutory Overview
• Conduct either criminal or civilly reviewable
• Following 2009 reforms, criminal offences
restricted to hard core price-fixing and bidrigging
– Per se offences, unlike predecessor provisions
which required showing of “undue” lessening of
competition
– Defence available if price-fixing agreement
“ancillary” to broader agreement; if so, then civilly
reviewable practice
Statutory Overview, cont.
• Other anticompetitive conduct is civilly
reviewable
• Need to show a lessening of competition
• RPM, refusal to deal, exclusive territories
(“market restriction”), tying, exclusive dealing
specifically enumerated in Act
• Abuse of dominance provisions serve as catch-all
• Merger provisions (including explicit efficiencies
defence)
Statutory Overview, cont.
• Criminal offenders (price-fixers) subject to
fines and imprisonment
• Civilly reviewable anticompetitive conduct
generally subject to injunctive cease-anddesist orders, though there is now scope for
“administrative monetary penalties” for abuse
of dominance
• Narrow scope for private single damages
actions if and only if criminal offence
3) Institutional Overview
• Competition Bureau, headed by Competition
Commissioner, investigates criminal matters,
but the Department of Public Prosecutions
prosecutes
• Criminal matters heard in ordinary courts,
with all due process afforded other criminal
accused persons
Institutional Overview, cont.
• Bureau also investigates civil matters
• Bureau frequently settles; may choose to register
“consent agreement” with Competition Tribunal, which
automatically imbues settlement agreement with
authority of a court order
• If no settlement, Tribunal will adjudicate (bifurcated
agency model)
• Tribunal comprises judicial and lay members, though in
theory only judges make decisions of law
• Appeals lie to Federal Court of Appeal, though
deference is owed to Tribunal decisions
Institutional Overview, cont.
• While there is statutory authorization of
expedited procedures, Tribunal procedures
have historically resembled court hearings;
some push to change in recent years
• Very few matters are heard by Tribunal
• Eg, five contested mergers since 1986; five
contested abuse cases over same period; no
substantive competition cases at all in 2008
Institutional Overview, cont.
• Limited right for private parties to appear
before Tribunal: with leave, not mergers or
abuse; none successful to date in the result
 Bulk of decision-making rests with Bureau as
a matter of fact: no private rights of action;
very few cases before Tribunal
4) Critical Evaluation of Institutional
Status Quo: Due Process Norms
• Focus on civil matters; criminal engages broad
panoply of ordinary protections for accused
• Fresh perspective from series of interviews: all
former Competition Commissioners (current
refused to comment); Chair of Competition
Tribunal; former economist at Tribunal and
Bureau
• Substantial consensus that institutional
framework is not working well; much less
consensus on reform
• Central due process concern: accountability
Due Process: Independence
• Consensus is that bifurcated agency structure
protects independence of decision-making well
• Some minor concerns expressed about location
of Bureau within Ministry of Industry: budget
pressures potentially compromise independence?
• No former Commissioner expressed concern
about political influence over any given case,
though some sympathetic to reform for systemic
reasons
Due Process: Accountability
• Serious concerns expressed about accountability of
Commissioner for case-by-case decision-making
• Investigative powers are seen by some as having too
few checks on Bureau’s power: eg s. 11 orders to
produce documents are issued following ex parte
hearing
• More importantly, Tribunal is effectively a bit player
• Vast majority of cases are resolved by settlement with
no second look by the Tribunal: consent agreements, if
entered into, are simply registered; very limited private
rights of action
Due Process, cont.
• Some irony: one of the causes for concern about
Bureau’s power is due process values at the Tribunal
• Tribunal has historically granted court-like due process
protections
• Eg even interveners were given right to cross-examine
witnesses; parties in Superior Propane merger case
called almost 100 witnesses
• In face of cost and delay of full court-like hearing
before the Tribunal, parties generally prefer to resolve
any questions with the Bureau in a settlement
Due Process, cont.
• Consensus on concern about accountability of de
facto decision-making authority of Commissioner,
but no such consensus on reform
• Some fairly broad support for making
Competition Commissioner a multi-member
commission
• But much less agreement on its authority: status
quo? Fact-finder? Adjudicative authority, with
right of appeal?
Due Process, cont.
• We are drawn to bringing greater adjudicative
responsibility to Commissioners
• This invites objections about degrading the impartiality
of adjudication in any given case
• But:
– Structure adjudication procedures to protect against bias
– De facto Bureau decides matters now; greater de jure
integration of adjudication may engender greater
independence if more cases are contested and there are
rights of appeal
– Independence of adjudication not a trump card (e.g.,
importance of expertise)
5) Critical Evaluation of Institutional
Status Quo: Institutional Performance
• Key due process concern, accountability in
decision-making, also a problem of
institutional performance
• Focus now on other performance norms:
expertise; predictability/transparency
Expertise
• Serious misgivings about expertise in
Canadian competition institutions exist
• Some misgivings about lack of economic
sophistication at Bureau, but there is
consensus that expertise at the Tribunal is
inadequate
• Two problems: members are not expert at
time of their appointment; and do not
develop expertise on the job
Expertise, cont.
• Judicial members of Tribunal are inexpert
judges who may not ever have heard an
antitrust case, yet they have sole decisionmaking authority over questions of law
• Lay members have also not been expert in
practice; instead it is seen by many as a
political appointment (why this is such a plum
escapes us...)
Expertise, cont.
• There is an important problem of selfreinforcement: because Tribunal is inexpert,
parties are hesitant to appear before it, which
hinders the development of expertise on the job
• Lack of expertise may also contribute to the “fullcourt press” procedure, which in turn reduces
case load: don’t have sufficient confidence in the
issues to be more proactive in managing a case
Predictability/Transparency
• On its general approach to legal questions,
Bureau is seen as relatively transparent
– Eg Public draft and comment approach to
enforcement guidelines
• But on cases, much less transparency: matters
get settled; if get anything, may be short press
release, or cryptic consent agreement, but not
much detail
Predictability/Transparency, cont.
• Lack of transparency on cases obviously
impacts predictability: hard to gauge precise
approach of Bureau in the past
• Guidelines help, but these do not have force
of law, nor do they even bind the Bureau one
case to the next (notorious flip-flopping in
Superior Propane case)
Predictability/Transparency, cont.
• Tribunal situation also contributes to
unpredictability: there is very little case law
• And self-reinforcing: with little case law (and
inexpert adjudicators), parties do not want to
take a chance before the Tribunal
Reform
• Substantial agreement on inadequate institutional
performance; much less consensus on reform
• We find greater integration of adjudicative functions
within the Bureau attractive
– Key: Greater expertise: adjudicators are immersed in
competition policy
– With more expert adjudicators, and streamlined
procedures, hopefully there would be more adjudicated
cases and greater transparency and predictability
– Of course, concerns about adjudicative bias, but these (a)
exist now; and (b) are not pivotal concerns on their own