Compliance

SIGNIFICANT COMPETITION ACT AMENDMENTS CAME INTO FORCE
ON DECEMBER 15, 2023 (Bill C-56)

On December 15, 2023, Bill C-56 (An Act to amend the Excise Tax Act and the Competition Act), which introduces the first of two sweeping rounds of federal Competition Act (“Act”) amendments in Canada together with Bill C-59, received royal assent.

This first new round of amendments to the Act, which is intended, among other things, to strengthen the ability of private parties and the Competition Bureau to enforce the Act and competition in Canada overall, includes a number of fundamental changes to Canadian competition law. Bill C-59, once it is passed (expected in early 2024), will likely include a number of advertising/marketing law related amendments, including related to drip-pricing and green (environmental) claims.

These initial amendments under Bill C-56 include new broad powers for the Competition Bureau to conduct market studies, fundamental changes to the substantive test for abuse of dominance under section 79 of the Act (creating a new two-track test for abuse of dominance), new penalties for abuse of dominance, broadening the civil agreements provision (section 90.1) to include agreements between non-competitors, repealing the efficiencies provisions under section 90.1 and repealing the former efficiencies defence for mergers under section 96.

Our blog overview pages will be updated to reflect these important amendments, as well as the second round of amendments under Bill C-59, which are expected to come into force in early 2024.

For more information, see: Competition Bureau, Guide to the December 2023 amendments to the Competition Act.

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Overview

Competition law compliance programs are not mandatory in Canada (i.e., are not required by the federal Competition Act or by the Competition Bureau (Bureau), which administers and enforces the Competition Act).

Competition law compliance programs are, however, highly advisable for companies, trade and professional associations and other types of organizations that may be exposed to potential competition law risk.

Competition compliance programs may also, in some cases, be ordered by a court, agreed to as part of a settlement with the Bureau or required as a condition of the Bureau not pursuing enforcement action (i.e., as part of an alternative case resolution in an enforcement matter).

While there is no single form for competition law compliance programs in Canada, they should be tailored to, among other things, a company’s or other organization’s particular operations and types of potential competition law risks.

Competition law compliance programs typically include the following: (i) a compliance policy (e.g., a one-page statement reflecting a company’s commitment to comply with the letter and spirit of competition laws); (ii) a compliance program document (i.e., the core compliance document that sets out the relevant competition laws and the organization’s compliance policies and procedures; (iii) compliance guidelines for relevant activities and events (e.g., conduct of meeting guidelines, information exchange guidelines, document creation/retention guidelines and/or search and seizure guidelines); (iv) a form of employee certification letter; and (v) regular training and education.

Benefits of a Credible and Effective
Competition Compliance Law Compliance Program

Competition law compliance programs can have a number of benefits.

These include to: (i) maintain a good reputation for a company, association or other organization; (ii) minimize the risk of potential non-compliance with competition laws; (iii) help detect potential competition law violations; (iv) potentially allow for favourable treatment in sentencing under the Bureau’s Leniency Program; (v) reduce potential director and officer liability; and (vi) identify early potential competition law violations to request immunity or leniency under the Bureau’s Immunity and Leniency Programs.

Competition Bureau Competition Law
Compliance Guidance

On March 15, 2023, Canada’s federal Competition Bureau (Bureau) launched a new competition law Compliance Portal (see: Consultation on new Compliance Portal).

In making its announcement, the Bureau said that it launched its new Compliance Portal to help businesses stay on the right side of Canadian competition and labelling laws and that its core principles about competition law compliance programs had not changed.

The Bureau’s new Compliance Portal replaces its former Corporate Compliance Programs Bulletin (Compliance Bulletin), which was updated in 2015 and until now had been its key compliance guidance relating to Canadian competition law compliance programs.

The Bureau’s former Compliance Bulletin provided more comprehensive competition compliance guidance than the Bureau had issued before its 2015 Bulletin. It included a discussion of the seven essential elements that were then in the Bureau’s view necessary for a credible and effective competition compliance program, a template competition compliance program (which was very helpful to companies and other organizations) and employee certification letter and detailed due diligence checklists to comply with core provisions of the Competition Act, including participating in trade and professional association activities.

For more information about trade associations and Canadian competition law, see Competition Law and Trade Associations.

Overall, the Bureau’s new Compliance Portal is a more user-friendly and interactive online resource than its previous Compliance Bulletin. It includes an overview of Canadian competition and packaging and labelling laws and compliance programs, the eight elements that the Bureau now currently considers to be necessary for a credible and effective competition law compliance program in Canada, guidance to comply with key provisions of the Competition Act, including Abuse of Dominance, Bid-Rigging, Conspiracies, Misleading Advertising and mergers and hypothetical competition law compliance case studies.

While the Bureau’s new Compliance Portal in many ways reflects its previous approach to competition law compliance, including core principles that compliance programs must be tailored and scaled to an organization’s operations and risks, need for senior management support and effective training, there have been several noteworthy changes.

With respect to Competition Compliance Programs and the Bureau’s Leniency Program, the Bureau’s former clear position that it would treat a credible and effective competition law program in place at the time of a competition law offence as a mitigating factor when making sentencing recommendations to the Public Prosecution Service of Canada in connection with a Leniency Program application has been removed.

This clear guidance had been a shift by the Bureau when it initially issued its 2015 Compliance Bulletin. It is not yet clear whether the Bureau will continue to take this position in its Leniency Program guidance. For more about the Bureau’s Immunity and Leniency Programs, see Immunity and Leniency Programs

With respect to trade and professional associations, the Bureau’s former detailed, and quite helpful, guidance for trade association participation and activities has been removed from its new Compliance Portal.

The Bureau’s new Compliance Portal now only provides general high-level guidance about the potential risks of participating in trade and professional association activities, including recommending to only participate in trade associations if they have a credible and effective compliance program. For more information about Canadian competition law and trade and professional associations, see: Trade Associations.

The Bureau’s former template competition law compliance program and template employee certification letter that were included before in its Compliance Bulletin are also now not included in its new Compliance Portal.

In addition, the Bureau’s new Compliance Portal includes an overview of criminal wage-fixing and no-poaching agreements between employers, which track new criminal offences that were added to section 45 of Canada’s Competition Act in June 2022 and that will come into force on June 23, 2023. For more information about these new wage-fixing and no-poaching agreement offences, see Conspiracy (Cartels).

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SERVICES AND CONTACT

We are a Toronto based Canadian competition and advertising law firm that helps clients in Toronto, Canada and the United States practically navigate Canada’s advertising and marketing laws and offers Canadian advertising/marketing law services in relation to print, online, new media, social media and e-mail marketing.

Our Canadian advertising/marketing law services include advice in relation to anti-spam legislation (CASL), Competition Bureau complaints, the general misleading advertising provisions of the federal Competition Act, Internet, new media and social media advertising and marketing, promotional contests (sweepstakes) and sales and promotions. We also provide advice relating to specific types of advertising issues, including performance claims, testimonials, disclaimers, drip pricing, astroturfing and native advertising.

For more information about our services, see: services

To contact us about a potential legal matter, see: contact

For more information about our firm, visit our website: Competitionlawyer.ca