Remarks by Commissioner of Competition Matthew Boswell
Federal Trade Commission International Hearings on Competition and Consumer Protection in the 21st Century
March 25, 2019
(As prepared for delivery)
Thank you for that kind introduction.
Thank you also to the Federal Trade Commission for inviting me to join today’s discussion.
Thank you to my fellow panelists, Edith Ramirez, Chilufya Sampa, Tom Barnett, and fellow Canadian, Jean-François Fortin.
And, of course, thanks to all of you for joining us today to talk about Competition and Consumer Protection in the 21st Century.
Change is inevitable, and it’s upon us.
The rise of the digital economy in general, and e-commerce in particular, is a truly global phenomenon.
More and more, the conduct we investigate is not constrained by borders.
And when change happens, the question isn’t, how do we feel about it, the question is how will we respond to it?
Will we rise to the challenge?
Will we seize the opportunities that come with it?
These are questions governments around the world are facing, and how we answer these questions will define our success.
We, at the Canadian Competition Bureau, have a long history of cooperation with the FTC and many other international competition authorities around the world.
But, we must not rest on that foundation.
We must continue to build on it and adapt to new realities.
During today’s digital age, cooperation between international competition authorities is more critical than ever before.
We are in the midst of a transformative shift.
The giants of the taxi and accommodation industries don’t own cars and property any more.
Instead, they are using technology to disrupt traditional business models and create digital platforms that connect users quickly and easily.
As our Minister of Innovation, Science and Economic Development has rightly pointed out: the digital economy is the economy.
This is the backdrop of competition law enforcement in the 21st century.
Digital platforms are creating an economy built on collaboration.
And, if we want to keep pace, we’ll need to continue to collaborate and find better ways to do so.
So, today, I’d like to talk about why international cooperation between competition authorities is so important.
I’ll discuss the benefits it brings us and the tools we use to achieve it.
I will end with some examples of cases where cooperation has been critical and we have benefitted.
Plus, without pre-empting my panel remarks, I will consider a few ways we might improve in the future.
Drivers of International Cooperation
So, to get us started, let’s consider why it’s so important that we cooperate.
The rise of the digital economy in general, and e-commerce in particular, is a truly global phenomenon.
The number of digital buyers worldwide is expected to rise to over 2 billion by 2020 – that’s approximately one-quarter of the world’s population.
And there are a growing number of jurisdictions with competition laws and authorities.
When the International Competition Network first launched in 2001, it only had members from 14 jurisdictions.
Today, it has 146.
We have moved from theoretical discussions of enforcement cooperation to our current reality of regular cooperation between authorities.
Not surprisingly, collaboration with the US competition authorities is particularly important.
It developed naturally, given our shared border and our close economic and trade ties.
The signing of Canada-United States-Mexico Free Trade Agreement, or C-U-S-M-A, last year was very important and, once in force, it will further strengthen our commercial relationship.
A coordinated approach to the challenges the current digital age raises for competition law, is critical for enforcers.
Benefits of International Cooperation
And, when we do cooperate, there are many benefits for us to reap …
Increased detection and deterrence of anti‑competitive conduct.
Efficiencies, for both agencies and businesses.
The sharing of best practices, resulting in more effective investigations and better protection for consumers.
And minimized risk and uncertainty for businesses and agencies, because when agencies cooperate, outcomes are more consistent.
In fact, it was the divergence between Canada and the US on the GE-Honeywell merger case that led to the creation of the International Competition Network.
Informal and Formal Cooperation
And, at the Canadian Competition Bureau, that vital cooperation occurs on a broad spectrum, from formal to less formal avenues.
Informally, we exchange public information, theories of harm and procedural information such as the timing of investigative steps, and we conduct meetings and staff exchanges.
In contrast, formal cooperation can include mutual legal assistance and the sharing of documents, data and confidential information.
Enforcement Cooperation Frameworks
For instance, competition policy principles are commonplace in Canada’s free trade agreements, like CUSMA, and they ensure that the benefits of trade liberalization are not offset by anticompetitive conduct.
In criminal cases, mutual legal assistance treaties –M-L-A-T-s- are useful formal tools to gather evidence located in foreign jurisdictions.
This formal cooperation allows enforcement agencies to share documents, affidavits, lend exhibits and engage in search and seizure.
The Bureau has used the MLAT process to conduct searches in Canada on behalf of the US Department of Justice Antitrust Division and to obtain important evidence from the United States.
Where confidential information is shared, outside of MLATs, we often obtain waivers from the parties.
But even without waivers, section 29 of the Competition Act lets us share confidential information with other agencies for the administration or enforcement of the Competition Act and where we have assurances of confidentiality.
The Canada-US Cooperation Agreement, signed in 1995, has served as a high-level framework for our positive cooperative relationship.
It sets out how the Bureau, the FTC, and the DOJ Antitrust Division will work together.
We also have our Canada-US Positive Comity Agreement – allowing one country to defer to another in cases where conduct in one country creates anticompetitive effects in the other.
And, more recently, we established our Best Practices on Cooperation in Merger Investigations.
This was based on years of merger-review collaboration between the Competition Bureau and US antitrust authorities.
And, we have put this best practices document to good use.
Recently, we worked with both the FTC and the European Commission on the global Linde Praxair transaction, where we obtained multiple remedies.
We also worked closely with the US DOJ on agriculture transactions, such as Bayer/Monsanto and Dow/DuPont.
But, one transaction that stands out in my mind is the Staples-Office Depot merger in 2016.
It exemplifies the deep and positive cooperation that we have with the FTC.
In that case, there was extensive sharing of data and evidence, including the FTC sharing their Second Request with us.
We also seconded a Canadian Department of Justice lawyer to the FTC litigation team and had Bureau officials attend the FTC injunction hearing.
As a result, the Bureau and the FTC were able to file simultaneous court challenges to the merger, and the parties ultimately abandoned the transaction.
I will encourage Bureau merger staff to seize such opportunities for deep collaboration, wherever possible.
Abuse of dominance
On the abuse of dominance side, Google comes to mind as a great example of our cooperation.
The Bureau launched an inquiry in 2013 under the abuse of dominance provision of the Competition Act to investigate Google’s conduct related to online search and search advertising as well as display advertising.
During the course of our in-depth investigation, we worked with several international counterparts, including the FTC.
We concluded that Google used anti-competitive clauses in its AdWords Application Programming Interface Terms and Conditions.
These clauses were intended to exclude rivals and negatively affected advertisers.
Google removed these clauses and committed to not to reintroducing them, or similar ones, for a period of five years.
These commitments were similar to those made in the United States.
Being able to readily review facts and evidence related to similar allegations against Google in the US context, was of significant value for the Competition Bureau’s investigation.
On the Cartels side, I’ll cite our recent Nishikawa case.
Between 2000 and 2012, Nishikawa participated in an international bid-rigging conspiracy affecting Canada and the US.
Both the Bureau and the DOJ investigated the conduct, and we worked closely together throughout our investigations.
Given that Nishikawa’s conduct primarily targeted American consumers, it was agreed that the matter could be addressed by the DOJ, in consultation with the Bureau.
The US resolution included a guilty plea by Nishikawa and a hefty fine of 130 million US dollars to address the harm the activity caused in both Canada and the US.
And, in the area of deceptive marketing, our legal framework and ability to assist and share information with our foreign counterparts has improved significantly with the enactment of Canada’s Anti-Spam Law, or “C-A-S-L.”
“C-A-S-L” recently brought into force new express provisions allowing the Bureau to use our investigative powers under the Competition Act or Criminal Code to assist foreign partners, without us having to be conducting our own investigation.
It grants these powers with the provision that information will only be used for that investigation or proceeding and the will be kept confidential, similar to provisions in the U.S. Safe Web Act.
Although I am unable to discuss details, recently, in response to an FTC request, the Bureau shared information obtained through formal powers with the FTC to assist them in an investigation.
Similarly, the U.S. Safe Web Act amendments have been a very valuable tool for gathering information in cross-border deceptive marketing cases.
I know the Safe Web Act is up for renewal soon, and I want to say, the Bureau supports that renewal, and we are pleased with how we’ve been able to use this valuable tool.
Generally, the Bureau has used Safeweb requests to obtain information relevant to our investigations, as it did with the Premium Text Messaging matter – litigation against Canada’s three largest wireless providers for deceptive marketing practices.
At our request, the FTC applied to the US District Court for the District of Maryland for an order authorizing the FTC to obtain oral and documentary discovery from a US company, Aegis Mobile.
Subsequently, the US District Court ordered Aegis to hand over documents to the FTC, enabling them to share those records with the Bureau.
This is the first time an American court granted authorization to the FTC to conduct discovery of an American company to assist the Bureau.
These events were of tremendous assistance to the Bureau in advancing its case.
The FTC and the Bureau are involved in several cross-border regional partnerships related to combatting mass marketing fraud, including the Toronto Strategic Partnership, the Alberta Partnership Against Cross-Border Fraud, and the Pacific Partnership Against Cross-Border Fraud.
These working relationships, focused on sharing intelligence and cooperating in mass marketing fraud investigations, have frequently led to early collaboration between the Bureau and the FTC.
However, communication on cross-border enforcement outside of these partnerships, could allow for broader cooperation between the Bureau and FTC.
More cooperation at the working level and informal discussions on trends, intelligence, opportunities to coordinate investigations, and dialogue early on in the investigative process could make formal information-sharing tools even more effective.
To that end, we have been participating in regular Merger Team Leader Meetings with our US partners since 2011.
These were so successful, we have expanded them and have had similar meetings with Brazil, Australia, China, the European Union and the UK.
And we’re looking forward to abuse of dominance team leader meetings with the FTC and DOJ in June.
Like the FTC, we also participate in international staff interchanges and host officials from countries around the world.
We have had several successful outbound interchanges to the FTC over the years, and we would welcome the opportunity to host a member of the FTC at the Bureau, but may I suggest you don’t come in the winter.
This networking and the people-to-people linkages such informal cooperation creates, builds rapport and eases international cooperation — because relationships and trust matter.
Cooperation among authorities is critical to finding common approaches to tackle global anti-competitive conduct
And, through the various tools we have in place, we can continually reap the benefits of working together with our global partners.
And together is the key word there.
As Henry Ford once said, “If everyone is moving forward together, then success takes care of itself.”
That’s true for us too.
Strong working relationships are a hallmark of a successful organization in our digital and globalized world, and competition authorities are no exception.
Now, let me end by thanking the FTC for hosting what I’m sure will be an interesting dialogue.
I’m really looking forward to our panel discussion.
Thank you, and enjoy the hearings.