Host Kirsten Cirella, along with guests Majid Charania and Beth Riley, explore competition law compliance in Canada, offering insights into recent amendments to the Competition Act and practical strategies for businesses to stay compliant.
In this episode, host Kirsten Cirella and guests Majid Charania, Director of Competition Compliance and Outreach with the Competition Bureau, and Beth Riley, partner in the Competition and Foreign Investment Group at McMillan LLP dive into the world of competition law compliance. This episode kicks off our compliance series, providing timely insights into how the recent significant amendments to the Competition Act impact businesses across Canada. Majid and Beth discuss the fundamentals of competition law, practical compliance measures and strategies for promoting a culture of compliance within organizations. This episode aims to provide valuable insights for non-experts and experts alike, helping businesses navigate the complexities of competition law and stay compliant in a rapidly evolving legal landscape.
For further reading on the Bureau’s guidance on developing credible and effective compliance programs, please refer to the Bureau’s Compliance Hub: https://competition-bureau.canada.ca/en/how-we-foster-competition/compliance-and-enforcement/compliance-hub
Welcome to Counterfactual the podcast brought to you by the Competition Law and Foreign Investment Review Section of the Canadian Bar Association. Counterfactual takes a fresh look at issues relevant to business competition and related areas of regulation, and explores the real and hypothetical worlds to gain practical insights and debate policy. Hope you enjoy the show.
Kirsten
Hello everyone, and welcome to another episode of the Counterfactual Podcast. My name is Kirsten Cirella and I'm an associate in the Competition and Foreign Investment Group at Stikeman Elliott in Toronto. Today, we have a very exciting episode lined up, diving into the world of competition law compliance. This episode kicks off our compliance series, and is also incredibly timely given the major transformation competition law in Canada is currently experiencing. In recent years, the Canadian Competition Act has seen the most significant amendments in over a decade, with important and far-reaching changes rolling out in 2022, 2023, and 2024. These laws impact every business in Canada, big or small, making it crucial for in-house lawyers and business leaders everywhere to understand how competition law works and how it can affect their operations.
We've witnessed the real-world impact of competition compliance issues on businesses of all sizes. Take the Cineplex litigation, for example. An inadequate disclosure of an online booking fee led to a record fine of nearly $39 million dollars being imposed on Cineplex under the Competition Act's new drip pricing provisions. The Bureau is also ramping up its enforcement against cartels and anti-competitive collaborations. Recently, the Bureau secured guilty pleas from five contractors in Mantiba for conspiring to divide up social housing contracts among themselves and also from an employee involved in bid rigging for a paving contract in Quebec. In both of these instances, individual employees face significant monetary fines. In light of these developments, we hope this episode will be a valuable resource for in-house lawyers, business leaders, and people in management positions to better understand what you can and cannot do and how to implement practical compliance measures to stay onside the law. So this episode is a bit different from our usual format. We'll delve deeper into the fundamentals of competition law, making the discussion accessible and informative for non-experts too. In Part Two of our compliance series, we'll hear from business leaders at some of Canada's largest corporations. They'll share how these legal changes have impacted their businesses, how they're adopting their practices, and how competition lawyers can help mitigate risks and protect companies when breaches are identified.
For today's episode, we're joined by two fantastic guests who are perfectly positioned to lead our discussion. First, we're joined by Majid Charania, who is the Director of Competition Compliance with the Competition Bureau. In this role, Majid is responsible for promoting compliance by businesses of all sizes with the Competition Act. Majid previously served as Special Advisor to the Commissioner of Competition, who is the head of the Competition Bureau. He has significant enforcement experience leading highly complex merger reviews and also litigating on behalf of the Commissioner of Competition. We're also joined by Beth Riley, who is the partner in the Competition, Antitrust, and Foreign Investment Group at McMillan LLP in Calgary. Beth has extensive experience advising businesses on compliance matters, including helping clients review and implement corporate compliance policies, and helping clients respond to compliance breaches when they occur. Beth brings a unique perspective on the workings of the Competition Bureau, having served as an officer assessing mergers under the Competition Act prior to practicing law. So thanks again for listening, and we hope you enjoy today's episode.
Kirsten
Welcome Beth and Majid to the Counterfactual Podcast. Thanks so much.
Majid
It's great to be here.
Kirsten
So I thought we could get started with a brief introduction on the purpose and importance of competition law and compliance in Canada.
Majid
Yeah, I’m I'm happy to get that discussion going. So maybe I can start with a bit of 50,000 foot view. Canada has a Competition Act that's meant to be really marketplace framework legislation. It's meant to put guardrails around our market economy to make sure that it's actually functioning as intended and that you know all Canadians can benefit from competitive rivalry between firms and the economy. So it's really meant to be a high level framework piece of legislation, The Competition Act is a law of general application. It's not sector specific. In terms of a little piece of history, the current act was enacted in 1986. It replaced what was mostly criminal legislation. And the roots of that legislation actually go back to 1889. We actually had the first competition law in the modern world. We beat the US by year. So yay, Canada. And there were major amendments to that law. around 2009, and then we'll get into this, but over the last a couple of years. So the law's got civil and criminal provisions in it. you know I can get into that a little bit more. It also contains powers for the Competition Bureau to engage in market studies and explicit authority to appear before federal and provincial boards. So there's an advocacy element also built in to the law as well.
You mentioned the the purpose or the objective. If folks are are keen to look at it, Section 1.1 of the Act contains a purpose clause, and there are kind of four distinct objectives in there. Some would say they're a little bit there's some tension between them, but nevertheless, Parliament saw fit to include a few different objectives. So one is around the efficiency and adaptability of the economy. There's also an objective around expanding opportunities for Canadian participation in world markets, but also recognizing the role of foreign competition in Canada. There's another objective around small and medium-sized businesses, and that might be particularly relevant to some of the folks listening, you know, who may be generalist counsel or who work with smaller businesses. There's an objective around ensuring SMEs having an equitable opportunity to participate in the Canadian economy. And then the last objective there is more consumer focus. It's around providing consumers with competitive prices and product choices. So there's a lot. There are a lot of guiding principles essentially for the the Competition Bureau's work.
Kirsten
Yeah, no that's great. That's super helpful. So stemming from there, I think maybe it would be helpful to highlight some of the key substantive areas of the Competition Act. And then maybe we can discuss, what businesses should be aware of from a compliance perspective in those.
Majid
Yeah, certainly. So what I propose to do is maybe go through four major buckets, elements of the Competition Act that that the Commissioner, the Competition Bureau enforce. There are obviously a number of provisions in the Act that, you know, for purposes of time and detail, I'm not really going to go into something to focus on the core, but knowing that there's a lot more there and the Bureau has a lot of guidance published on its website that allows people to go into more detail on pretty much any part of the act in terms of the commissioner's interpretation of the law. So maybe we get started with the the criminal conspiracy provisions and go from there. How does that sound?
Kirsten
Yeah, that's perfect.
Majid
Okay. So the first sort of major bucket of of enforcement is around business collusion and what was recently added also around wage fixing and no poaching agreements. All of those elements are grouped into two main provisions in the Act, Section 45 and Section 47. So in Section 45 of the Act, there are a number of types of collusion that are prohibited and they're a criminal offense. So you've got things like price fixing, market allocation, supply restriction that are covered in Section 45 sub one of the Act. And then, as I mentioned, a relatively recent amendment added the prohibition around wage fixing and no poaching agreements. And that's in Section 45 sub 1.1. I'm not going to lay out each detail of of the tests under there, but by and large, we're talking about businesses agreeing amongst themselves on elements where they should really be competing.
Kirsten
And that applies to employees like in the recruitment process and also extends to other types of, you know, regular business practices.
Majid
That's right. So some of those provisions relate to agreements amongst competitors. The wage fixing and no poaching agreements provision relates to agreements amongst unaffiliated employers.
Kirsten
Right. Yeah. And so that's a recent change to, to the act. So that's something that might not be reflected in, you know, your historic business practices.
Majid
Right. And and we published guidance on that provision when shortly before it came into force. So I'd really encourage folks who aren't necessarily experts in competition law to take a look at that guidance. Maybe a word about bid rigging, which is a form of of collusion. There is a separate section, Section 47 in the Act that that relates to bid rigging. So that's more around bidders and how they are bidding. It's an offense to agree on how they're going to bid and if they don't make that agreement known to the request for for bids or or tenders, the requester, I should say. And as as I said, you know, those are criminal provisions, so the penalties can be quite severe. We're talking, you know, a fine that can be set at the discretion of the courts, imprisonment of up to 14 years, or a combination of both. There's also the right for victims to sue for damages, follow on class actions, etc.
Kirsten
And, i you know, the there's recently been changes in the act. Some of those are increasing the penalties. So it kind of shows that the Bureau's taking enforcement of this area seriously. And, you know, businesses should be aware of that as well.
Majid
Absolutely, absolutely. Shall we skip to deceptive marketing?
Kirsten
Yep.
Majid
So here are provisions in the Competition Act that relate to marketing practices. There are both civil and criminal provisions in the act. A lot of enforcement recently, I would say, has been around the civil provisions. So what I propose is maybe to talk a little bit more about the civil provision, but touch on you know the the fact that there's the criminal component to it as well.
Kirsten
And then what would the difference be? you know, what like how would the civil versus criminal provisions apply or be enforced?
Majid
Yeah. So on the civil side, there is a general provision that establishes reviewable conduct of deceptive marketing. And that's around a prohibition for anyone promoting a product, service or a business interest through claims that are false or misleading in any material respect. So There's a few elements in there. There's the materiality aspect. So we're talking about you know information that could influence consumer behavior, like influencing them to buy or to use you know advertised products or services. There's also the requirement to look at what the general impression of a representation is in addition to the literal meaning. There's a few nuances in the general provision. Under the civil side, there's a few different elements as well that have specific tests. So things like performance claims, ordinary selling price, drip pricing, greenwashing. These are examples of elements that have specific provisions in the act. And then on the criminal side, sure.
Kirsten
Okay, yes. But so these, the civil part would would apply to different teams, right? So it would be the people making the advertising claims, you know, they have to make sure the statements are correct, can be substantiated, but then, you know, also people who are doing the testing like, and coming up with that data and monitoring it, making sure, you know, that continues to support any claims you're making.
Majid
Yeah, I think there are a number of actors that that need to know about these provisions. And it's a provision, frankly, that any business should know about because you know businesses are out there to go and sell a product or service and make money. So they're going to want to talk about it.
Kirsten
One hundred percent.
Majid
Yeah, so on the criminal side, again, there there's a general prohibition and then a few specific criminal provisions. The general prohibition looks similar to the civil side, but there's the additional element of knowingly or recklessly making the claims that could trigger trigger criminal liability. And the commissioner has discretion in terms of an investigation and what track of of investigation you know could be chosen.
Kirsten
Yeah, no, that's very helpful. Okay, so then you want to move into the next bucket.
Majid
Yeah, so the the rest of the major enforcement areas under the Competition Act are civil. So I'm happy to run through maybe restrictive trade practices that are covered by the Act. There are a lot of types of conduct that could be caught. So what I propose to do is just talk a little bit about kind of the core provision where where recent enforcement has taken place. That would be section 78 and 79 of the Competition Act. They're around abusive dominant position. But there are other provisions and in that section in part eight of the Act that do deal with restrictive trade practices. So abusive dominance is kind of a core area of enforcement for the Bureau. And I should be clear, you know, a big business just being big, it's not necessarily a cause for concern. What we're really talking about where the commissioner would have concerns is around, you know, companies that have market power that are abusing that market power in a way that hurts competition in the marketplace. So what that distills down to in terms of the test in the abuse of dominance provisions is kind of a there's a two part test now. That's the result of recent amendments. But essentially for an abuse of dominance case to be made out, the commissioner would have to prove, or a private party would have to prove that the firm in question has engaged in activities, there that firm is dominant, so they have a substantial degree of market power.
And then one of the following must also be true in order to get a prohibition order. Either that dominant firms activities are intended to have a negative predatory exclusionary or disciplinary impact on a competitor or some adverse effect on competition. And that can be subjective or objective, but that's sort of one possible bucket or the dominant firms' activities have substantially lessened or prevented competition in the market, or it's likely to do so. So in order to obtain a prohibition order, one of those two elements in addition to dominance would have to be proven. If all three are are proven, then that opens up the possibility for the Competition Tribunal to levy an administrative monetary penalty. There's a formula for that that's been sort of created by way of recent amendments. I'm not going to go into the details of it, but yes.
Kirsten
Yeah. Just know that there's potential for fines.
Majid
And they can be in theory quite significant because it's related now to turnover, global turnover of the company. That's kind of the restrictive trade practice aside, focusing on abusive dominance. But as I said, you know there there are a number of other provisions that have very specific tests. Things like refusal to deal, resale price maintenance, tied selling, exclusive dealing. Both types of specific conduct have specific tests under the Act.
Kirsten
Yeah. Not all these areas will be directly applicable to all types of businesses, but there just are clearly a lot of different areas where the Competition Act and compliance comes in.
Majid
That's right. Yeah.
Kirsten
So were there any other key substantive areas?
Majid
Yeah. I might highlight two more. One is around a specific type of collaboration. So we talked earlier about collusion. you know businesses getting together to agree on terms where really they should be competing and the criminal aspect of that. There is also a civil provision in the Act that creates reviewable conduct around certain types of collaboration. It's section 90.1 of the Act, and it's around persons entering into agreements that substantially prevent or lessen competition, but maybe don't rise to the level of naked restraints on competition like price fixing, or market allocation. So, you know, there can be a number of examples, and this is very fact specific, but, you know, things like joint production or information sharing agreements could be reviewable under the Act. One notable amendment to that provision is around the fact that the the parties to the agreement don't necessarily have to be competitors anymore. If some overriding purpose of the agreement is to lessen competition in a market, the parties don't necessarily have to be competitors for the provision to be engaged.
Kirsten
No, that's important to know.
Beth
Well, that's new and untested and therefore a bit uncertain, right?
Kirsten
Yeah, no, it's true. Like with all these amendments, you have to think about what kind of guidance you're giving to your clients and businesses. And it is an interesting time to see how it'll apply in practice.
Majid
No, absolutely. The last sort of bucket I will highlight is around mergers and acquisitions. So folks have probably seen in the news, you know, the Bureau challenging the Rogers and Shaw transaction. There's stuff in the news that comes around our work in this area. What maybe some people don't know and should know is the Commissioner has the ability to review and challenge any merger in Canada, no matter how big or small. And by merger, what we're talking about really is you know acquiring control over or a significant interest in the business of a competitor or a supplier or a buyer, any other person. So the definition is quite broad. the The mechanics of it can be quite broad as well. It could be a share purchase, could be asset acquisition. It could be an amalgamation. There are a number of different ways in which a transaction could be caught under the merger provisions.
Beth
It could be even a joint venture arrangement between the parties, right? That's what we often don't think about, some form of strategic alliance between parties.
Majid
Yeah, no, it it it certainly could be. And there again, the test in the act and in section 92 of the act is around a substantial lessening or prevention of competition. So hat's that's the core of the test that you know the commissioner would have to prove in order to successfully challenge a merger. It has arguably the same economic underpinnings as as that test in in the restrictive trade practices provision and in the abuse of dominance provision.
Kirsten
Yeah. No, that's great. That's very helpful, a high-level overview of the key areas businesses should all be aware of. So thank you for that. Just going back to kind of our our compliance theme here. so would a company, would the companies or businesses compliance policies or practices impact, you know, how the Bureau would kind of enforce or investigate or you know, if there was an issue or breach?
Majid
Certainly there's there's a few different ways in which the Bureau would consider corporate compliance programs. Maybe before I get there, i i should also say, you know, our approach to enforcement and compliance involves a number of different sort of tools in the toolbox. Our investigations don't always proceed to litigation. There are situations where we might arrive at a settlement. with the targets of an investigation that resolve the competition concerns without necessarily going before the Competition Tribunal or to court. So I should mention that that's sort of part of the range of of possible resolutions. And that does kind of tie into where we might consider a compliance programs. So maybe I'll give three examples. The first and perhaps the most formalized one, it's on the criminal enforcement side. We have immunity and leniency programs that we administer jointly with the Public Prosecution Service. In our leniency program at paragraph 138, for those who want to go and read it, here is credit effectively for a credible and effective compliance program that's available to leniency applicants. You know, if a company applies for leniency and they're cooperating with the Bureau of Criminal Investigation and they present their compliance program that was in place at the time that the offense occurred, we would review that, my team, the compliance unit within the Bureau, would review the program and provide an evaluation to our colleagues on the criminal enforcement side.
And if we find that the program meets the principles that we've outlined in our guidance, in other words, if the program is credible and effective, then we would recommend that it be considered as a mitigating factor in the Bureau's recommendation to the prosecutors when the case is referred over to them. So that's kind of formalized in that structure. But on the civil side in you know, for example, deceptive marketing matters, the fact that a company had a credible and effective program in place could be taken into account when we choose whether to go down a civil or criminal enforcement track. It can also help companies mount a due diligence defense in the context of litigation. There is a due diligence element of in the deceptive marketing provision, so there's that as well. And then in any civil matter, you know, if we're looking at negotiating a settlement via consent agreement, you know, we might look at the history of compliance and what measures a company had in place when determining, you know, the the scope and obligations of of a consent agreement. So those are a few examples of how we consider compliance programs.
Kirsten
No, that that's really helpful. And I assume, Beth, from your perspective, you would always encourage your clients to develop a compliance policy and make sure that they're up to date and they're monitoring it and cultivating a culture of compliance. Do you want to maybe talk about what advice you've given in-house lawyer about what would, what initial steps would you take if you wanted to start reviewing or implementing compliance practices in a business?
Beth
Yeah, those are good questions. um I think echoing Majid's comments in addition with regard to the leniency and the treatment of businesses that are inadvertently kept caught by conduct that raises issues under the Competition Act and the effectiveness of a valid or effective compliance program, I think what's important to know is that most businesses, we're going to presume, do not engage in any competitive conduct or breach the Competition Act intentionally. And so a lot of that, when I look at a compliance program and talking with clients, a lot of it is trying to identify the risks and the interface that the businesses have with the Competition Act or various provisions with the Competition Act. Lawyers, for example, are not supposed to be experts in competition law, and they're not expected to prepare 100-page compliance policy with a huge amount of protocols. But from your question on first steps, I think the key is that the businesses have to identify the risks. And what that means is they do need a basic understanding of competition law. They're not expected to be the experts, but perhaps as part of their process, they engage a competition counsel to be able to give a bit of advice.
But the key to that first step is that the the the lawyers, the counsel who are helping develop this compliance program program need to understand the business. And that would be the key element, which is each of these compliant policies does not need to be an elaborate policy that will be one size fits all, but rather they should be tailored to the actual business, which means you have to ask the questions and the lawyers have to be engaged in the businesses themselves. They actually have to get into the weeds. Examples are, what are the products that the business offers? What's the business's role in those markets? Are they market leaders? What's the market share? Are they dominant? Are they significant players? How are prices determined? What are the market dynamics between the various competitors? What's interesting, and the Bureau's focused on this a bit, is how are prices determined and how is AI involved in pricing? And that's a lot of that's getting a lot of talk right now. But AI can inadvertently, or the argument is AI tools and software can inadvertently lead to similar pricing patterns and using price algorithms, for example. So when you're asking about the products your clients are looking at, one of the questions is how are prices set? Is there software used in that?
Kirsten
No, and that just makes sense because all this stuff is coming out right now, all these new programs and softwares, and it you no one really has oversight in how it's working. someone's going to complain or the Bureau might identify an issue. And it's just something that you didn't see coming.
Beth
I think that's exactly it. I think when, I mean, a few of the other points that are related to that are, what's the supply chain? How do you get your inputs? What are your interactions with customers? How do you market to your customers? Do you have booking fees? Do you have that might trigger on the drip pricing, for example, that Majid's mentioned? What about greenwashing? That's a huge topic right now, especially with the pressure of businesses to be able to communicate about how green they are. Especially in light of the fact that the government is engaging in green in in communicating about their environmental and impact. And a lot of industries and consumers are expecting that.
All of this goes to also, how are you treating employees? What are your agreements with employees? Do you have agreements with your competitors? How do competitors react? And I think lastly, what are the key ingredients of the agreements of the company and the arrangements of the company?
And a lot of times you have to look at all of that, those questions in light of, What's the purpose of these arrangements? And what is the potential impact? You mentioned this point already, which is when you're looking at conduct by participants and your client, what's the harm? What's the impact on competition with regard to all the chains of supply, their arrangements, their agreements? Those are the key beginning points or starting points to be able to understand how competition act may interact with your business and how you might have to identify the risks associated with your conduct and how you may be able to mitigate the risks under competition law.
Kirsten
That's extremely helpful. So yeah, when you're in the role of an in-house lawyer and a management position, like that you should be thinking about these issues and you need to understand, you know, the competition act and then start with a risk assessment. Is there any key components or just like fundamental basic principles that kind of just do apply to a good compliance program that's effective?
Beth
Once you've identified the key risks, and I'm going to jump into them as you'd probably, would probably want to give the correct answer, but from a practical perspective, the obligation of counsel is to advise your clients. And that means you have to help your clients identify the risks as we've talked about already. And one of the challenges that legal counsel face on occasion is creating a culture of compliance. And that sounds very vague, but it's not. What it means is that you need your board of directors and you need your executive management to sign on and support the process and to implement it. And what usually when I look at it from a very practical perspective is when you bear down, it's your compliance policy has to address these risks and you have to educate the personnel within the organization as to what those risks are and how to mitigate those risks. Often it can be as simple, quite truthfully, as a checklist and a bit of education for stoop for various people. And not everybody may need that entire that entire compliance policy. And it should relate, again, back to your diligence that you, the Council, have done, which is what parts and what people in your organization are engaged in those compliance-related matters that might be triggered and might inadvertently offend the Competition Act.
Kirsten
So are there any key teams you think that just you should be thinking about those sorts of issues and risks for your business that might need some special training or like some targeted compliance policies?
Beth
Well, the key is at the executive management, I think they all need to have a strong understanding of the potential risks of the company. But when you bear down and you look at it, key elements are when and when you look at what the Competition Bureau's focus is, one of their foundation elements are agreements between competitors. So those personnel that are dealing with competitors to the extent they are, they need to be engaged and they need to be train trained as to what concerns may arise. Another group are your sales and marketing teams.
They are needing incredibly sophisticated advice, although quite truthfully, it can be broken down into into simple elements, but in terms of the communications that you make, that includes your advertising, it includes marketing, and it includes the salespeople directly. HR needs to know about the what no poach and the wage fixing, for example. People that are in your BD, they absolutely need to know about the criminal conspiracy provisions in terms of strategic alliances that may inadvertently trigger naked pricing or frankly, agreements that might harm competition. One of the key problems that you think about is everybody's answer historically has been, of course, we want to increase our dominance. Of course, we want to be stronger and we want to crush everybody else. But that's not necessarily done in a manner that is supposed to contribute the act. It's not supposed to be, as she mentioned, the abuse of dominance. It's not supposed to lead to a harm to the competitive dynamics. And it's supposed to be manner. It's supposed to be pro-competitive behavior of your businesses. I don't know if that helps your answer or gives you enough information.
Kirsten
No, I think that that is really helpful. And I can just imagine, you know, the senior management or, you know, the people at the board of directors level or you know, the lawyers, when they do introduce these policies, it it could sometimes maybe be perceived by, you know, employees as you're trying to stifle their innovation or you're trying to hold them back. So you might face some internal resistance, which obviously goes against your culture of compliance and getting buy-in throughout the entire organization. So how can you help promote buy-in from employees or if there is internal resistance? Do you have any tips?
Beth
I think one of the most well I think one of the most obvious ones from my perspective is that you need to empower the employees and you need your employees to feel as though you want them to think and be creative as part of the process, but that they have to engage with their whoever their supervisors are. And that the supervisors, whoever they may be, and those employees should have free access to be able to communicate with their legal counsel to get advice. And typically, lawyers are not necessarily the counsel in-house, their job is not to say no. Their job is to figure out a mechanism to be able to allow the business and the employees and staff to be able to achieve their objectives. But a lot of times it's just a matter of a bit of a shift and trying to address the issue. So there's a lot of creative solution making, but it's teamwork, quite truthfully. That sounds a bit simple, but that is the truth from a more practical perspective.
Kirsten
100%, right? That does make sense completely. And then, so I guess Majid, if someone's listening to this, and they're not really at the stage to engage external competition counsel to help develop, is there any resources where businesses can go to start planning a compliance policy or understanding what the specific risks for their business may be.
Majid
Yeah, absolutely. I mean, the Bureau has number of free resources on our website that are designed to help people get a start And I think the the core of that is our guidance on the principles that really underpin any credible and effective compliance program. And, you know, Beth has helpfully talked about a number of them that that line up with some of the guidance that we've put out. And I'm glad that you talked about the importance of assessing risks and having your policy and your measures, you know, driven by the risk assessment, but also that there's got to be buy-in. We take that really seriously as well at the Bureau, you know, management and board commitment to compliance and and demonstrating that, like really the tone from the top is very important. So both those things, risk assessment and end tone from the top and the buy-in are important drivers of any compliance program. Those two aside, they're part of eight core principles that we have in our guidance. The rest of it kind of establishes the the operational practices that that we would want to see in a credible and effective compliance program if we're assessing it. So, you know, from there flow things like the policies, procedures and controls that you actually put in place. To Beth's point earlier, you know training and communicating with staff. And in our guidance, like we also distinguish between the types of training, the depth of training that people who are in what we call at-risk roles would get versus other people. And that's going to be different, you know, for for each organization. You know, one thing to throw out there as well, and it's in our guidance, even folks in sort of gatekeeper frontline roles like admin staff for people who might be, you know, engaging with competitors or doing sales or marketing, maybe on the front lines to observe issues that should be reported through mechanism that any credible and effective compliance program should have. So that's another element, you know, reporting mechanisms. And then kind of how you evaluate your program, how you monitor and audit \your compliance measures that needs to be done so that what you're not left with is a program that you put in place at a point in time and that's fixed. You know, if we're going to look at some at a business's compliance program and we see that it's a paper program from 2003, and we're in 2025, that's not going to give us much hope.
Kirsten
And we've had like five rounds of amendments since then.
Majid
that it Exactly. So those are key elements as well. And then aligning the incentives within the organization and the disciplinary measures around you know failure to comply. That's also important so that you drive home the culture of compliance. If your incentives are not aligned with what people say about doing the right thing, then you know you might question what the true culture is. So those are kind of that's a really quick run through for our core principles. But the guidance explains the principles, sets out tips on how to build a program that that meets those principles. And then we also have in each section kind of tips and tricks for smaller businesses because we recognize a compliance program is not going to look the same for a big bank as it would for, you know, a company with 50 employees that's doing some sort of manufacturing in a rural area. Like they're going to need different things in order to comply with the law effectively. And we want to see that sort of adaptability in in the program. So certainly no one size fits all. And there are ways to put in place compliance measures that don't have to be expensive or onerous, but that can still be effective.
Kirsten
No, that's really helpful. And Beth, what would your advice be just with all the changes in competition law? Like how frequently would you say that businesses should be reviewing their compliance policies and making sure that they're still up to date? Or is there certain particular times that would warrant it just based on your business? Like if you introduce a new product, is there any specific thoughts that you should have or just have a plan in place when things change at your business or the regulatory landscape.
Beth
No, I think this is good. I think one of the key components of a compliance program that was mentioned is that a compliance program from 2003 is probably not going to be effective. And you are going to have to continuously monitor your program. And what that means whenever there is an amendment, for example, to the Competition Act, and there been quite a few in the past two, three years, or when there's been a change to the business and whether it be even something as simple as the change in your standard form supply agreement or your standard form sales agreement, or to your point, when there's a new product invented or when there's a new process that's been implemented, you might just want to look at that element as something that could be looked at through the lens of competition law. And it might be you just call your friend who might have some knowledge occasionally and just do a bit of a yearly update as an update process that will help process. I think what else was helpful is looking to see what the Bureau, mean, again, there is a huge amount of public resources available on the Competition Bureau's website.
They also disclose what their plans are in their annual planning. And right now, I think it's important that people have to understand if they are, the Bureau is taking a position publicly, that the amendment, the Competition Act has been strengthened, and that people should expect increased enforcement, or at least enforcement of the Act, and that the Bureau is prepared to engage in enforcement. And that doesn't mean that there will be litigation in all cases, but it will be an active engagement by the Bureau into certain compare components. The Bureau also advises what so key sectors they're engaged in, and they're advising that it's they're focused on, it seems, consumer protection. They're focused on cost of living, including groceries. They're focused on key sectors like telecom, health, infrastructure. They're also focused on deceptive marketing, right? So all of that together in light of this new digital economy means that there's a lot for people to think about. Again, lawyers don't have to be the experts, but they do have to be live to the fact that the world is becoming increasingly complex and that the lawyers are the gatekeepers and are viewed often as the gatekeepers and then that they need to revisit those compliance programs sufficiently frequently that they're not inadvertently missing something.
Kirsten
No, that's that's really helpful. Do you have any tips for ongoing monitoring? Is there any way you know that you've seen companies efficiently, but also effectively just kind of monitor and make sure that everything's going to plan within the procedures that they've set out.
Beth
A lot of times there's a bit of an accountability and there's monitoring that's done. So there's reporting done by certain, again, depending on the size of the company, but if you have a very large company, which is usually where you have problems tracking that kind of monitoring, you have the executives within each group, whether it be a high level executive or a subhead, it depends on where they are, but supervisors taking some element of responsibility and providing updates and having communications at a smaller group that's trickled down through a delegation process.
Kirsten
Right. Okay. And that's, and maybe just, it could be setting up something just like a standard reporting time. So then you have the also that paper trail as well.
Beth
You want to be able to demonstrate that you are monitoring and you are updating on a regular basis. So it is a bit of a protocol, but it doesn't have to be a burdensome protocol. It's a fairly easy one. But you to your point, and I think this is very important for the due diligence defense and potentially your interact the business's interactions with the Bureau to the extent there is a concern that's been and and identified or an investigation, is that you do want to paper this. And you do want it to be an accurate record of your conduct so that you can look back on it and demonstrate your compliance and the steps that you've taken to ensure that there is compliance.
Majid
Maybe one other thing to consider, and this is especially, i think, applicable to smaller businesses. You know, they're often trade associations or or local business support organizations that might be well placed to update, you know, the the businesses who are members on changes in the law. That could be a very cost effective and low impact way to make sure that you stay up to date if you don't necessarily have all the resources in house to do that sort of constant monitoring. So and we have that in our guidance. We recognize the fact that smaller businesses may want to lean on their trade associations for that type of information. So it's it's something that if we see, especially a smaller business doing like that could also go to the credibility and effectiveness of their compliance program if they show that they're monitoring in that way as well.
Kirsten
Right. And that could be as easy as just signing up for, you know, email updates from the listserv from those organizations, you know?
Beth
Yep, absolutely. And trade associations are doing a very good job. I think they are becoming quite engaged in terms of not just competition law compliance, but compliance with other regulatory elements of the businesses in those trade associate in those trades.
Kirsten
No, that's extremely helpful. So I think we're just looking at the time, just a couple of final thoughts. So say that you did identify a breach, you know, within your business. If it came up internally, if maybe you received a complaint from a competitor or if the Bureau does reach out, what are some initial steps that you would suggest, you know, the the company taking?
Majid
but I mean, I'm happy to start and then Beth, you could give a couple of practical tips, but certainly from our perspective, you know, if there are issues that come up, for instance, through an internal reporting mechanism or an internal investigation. We obviously would want to see cooperation. We'd want to see businesses show like do the right thing and come forward. And cooperation and the conduct of a business throughout an investigation is is relevant. It's informative for us. But certainly we'd would we'd want to see that. And you know one of the principles of of a strong compliance program is to have a reporting mechanism that allows for anonymity and also has anti-retaliation measures in there. So we'd also want to make sure that businesses, if some sort of risky conduct or misconduct is highlighted, is found that there's no retaliation against against the the person who reported it. So these are all things that we would want to see. I'm sure Beth has you know practical advice as well based on her experience.
Beth
I think your advice is solid. I think I'll give some practical advice is the first thing you do as a lawyer, you typically would put a legal hold on any, which means you you're you're holding the record of of information so that there will be no inadvertent destruction, for example, of documentation. You want a legal hold. And depending on the nature of how this issue or this potential violation occurred, you want to engage with an internal investigation. You probably want to consult with outside counsel to assist with that internal investigation. And you probably want, well, not you probably, you do want to report up the chain to the responsible people at the company so that they are alert to these issues and are well informed from the beginning. Those are the initial steps that we typically advise. You have to get a lay of the land and actually figure out what happened.
Kirsten
Well, I understand. Yes. No, that's very helpful. And I'm sure, you know, once it's just about informing, getting, understanding this situation, diving in, and then based on what you learned during that phase, next step.
Beth
Then you consider the next steps. Absolutely. But it's too premature to reach out and call the Bureau or panic because really you have to understand what actually happened.
Kirsten
No, that's very helpful.
Beth
And what documents exist to establish what happened, right? Because sometimes there is a bit of a disconnect and there is a more nuanced analysis of what actually has occurred. Nope.
Kirsten
Right. So maybe not rush, not jump to any conclusions, just kind of make sure you thoroughly look through everything.
Beth
Yep. You don't punish the whistleblower, but you don't reward the whistleblower in terms of presuming that the conduct is on its face harmful to competition or violating the Competition Act. It's a measured approach.
Kirsten
Okay. Well, just before we end, is there any concluding thoughts or anything else that you want to discuss here?
Majid
Maybe I'll make one last plug for the resources we have on our website. We recently redid our compliance guidance and we've got on our website a compliance hub that's really meant to be a one stop shop for people either who are looking but for very specific guidance for how the Bureau will consider a compliance program or who are just starting out who might be, you know, in-house counsel and generalists and work with a smaller or medium sized business. Our guidance is meant to be in plain language and understandable by everyone. So I think it it can certainly be a place to start. And then we also have things like compliance boot camps that that we've got on basically every area of enforcement in the Competition Act. You know, those could be used in simple training programs. Those could be the basics that that you use. Obviously, very cost effective because they're free and they're available to all. So I would say take a look at our resources on our website. We've created more and more of them in plain language so that they can really be used plug and play for non-experts or in the context of compliance program training.
Beth
And am I wrong, but I think that you are, the Bureau is fairly open to actually giving, to providing compliance training on occasion, right, to different groups.
Majid
So we we do outreach at the level of like trade associations or chambers of commerce. We don't offer compliance training to individual businesses, but we can certainly do sort of a competition law 101, compliance principles 101 session or a local chamber of commerce or a trade association. So for folks whose businesses are members of those, if you think that would be valuable, certainly put it on the radar of your trade association, have them reach out to us and we can see what we can do.
Kirsten
Well, that's awesome. Well, thanks again, both of you This was extremely informative and a great discussion. We really appreciate it.
Majid
Thanks for having me.
Beth
And thank you. Thank you, Kirsten.
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