OTTAWA, December 7, 2006 -- The Honourable Maxime Bernier, Minister of Industry, today tabled amendments to the Competition Act in the House of Commons to ensure that consumers' interests are protected in the telecommunications industry.
Under the proposed amendments, the Competition Tribunal may order telecommunications service providers to pay an administrative monetary penalty of up to $15 million in cases of abuse of dominant position.
"Competitive telecommunications markets are vital to a strong economy, especially given the rapid changes in information technologies that are transforming how businesses operate and how individuals communicate and gather information. Competition drives firms to become more efficient, invest in new technologies and introduce new products and services that benefit consumers" said Minister Bernier.
"Allowing the Competition Tribunal to impose financial penalties will safeguard against anti-competitive behaviour that could ultimately harm consumers and promote timely and voluntary compliance in the telecommunications industry."
In their final report released in March 2006, the Telecommunications Policy Review Panel recognized the value of administrative monetary penalties to promote compliance in the telecommunications industry.
The Competition Bureau is an independent law enforcement agency that promotes and maintains fair competition so that all Canadians can benefit from competitive prices, product choice and quality service. It oversees the application of the Competition Act, the Consumer Packaging and Labelling Act, the Textile Labelling Act and the Precious Metals Marking Act.
For more information, please contact:
Isabelle Fontaine
Office of the Honourable Maxime Bernier
Minister of Industry
613-995-9001
Pamela Wong
Communications Advisor
Competition Bureau
819-953-7734
Backgrounder
The Competition Act
The Competition Act (the "Act") is designed to promote competition in the Canadian marketplace. Containing both criminal and civil provisions, the Act forms a major part of Canada's economic framework legislation applying, with few exceptions, to all industries and levels of trade. It is administered by the Competition Bureau, an independent law enforcement agency that promotes and maintains competition so that all Canadians can benefit from competitive prices, product choice and quality service.
The Act's criminal provisions prohibit price fixing, bid-rigging, discriminatory and predatory pricing, price maintenance, misleading advertising and deceptive marketing practices. These offences are prosecuted before criminal courts that may impose fines, order imprisonment, issue prohibition orders and interim injunctions, or any combination of these remedies.
The Act's civil provisions cover mergers, abuse of dominant position, refusal to deal, consignment selling, exclusive dealing, tied selling, market restriction and delivered pricing. These matters are reviewable by the Competition Tribunal, which has powers to issue injunctive and remedial orders with respect to mergers and anti-competitive practices likely to prevent or lessen competition substantially.
Advantage Canada
On November 23, 2006, the Government published Advantage Canada: Building a Strong Economy for Canadians.
The Government made a policy commitment to take steps to ensure that Canadians benefit from increased competition in the telecommunications sector, while preserving safeguards against anti-competitive behaviour.
The Telecommunications Policy Review Panel Report
In March 2006, the Telecommunications Policy Review Panel ("TPRP") released its report on the telecommunications industry. The TPRP recommended, among other things, accelerating the pace of deregulation of competitive telecommunications markets. The TPRP further recommended the use of administrative monetary penalties ("AMPs") for breaches of statutory provisions in the telecommunications industry.
Telecommunications Specific Administrative Monetary Penalties
As the telecommunications industry is deregulated, increased competition law oversight and enforcement is required to ensure that competition has the opportunity to develop where it can eventually replace regulation as the key source of discipline in those markets. Certain characteristics of the telecommunications industry warrant special consideration. For example, service providers must often rely on access to a competitor's network to provide service to their customers. At the same time, these suppliers are often fully integrated and able to offer the same range of service and compete for the same customers.
To the extent that a telecommunications service provider abuses its dominant position in a market, the proposed amendments to the Act would grant the Competition Tribunal authority to impose an AMP of up to $15 million against that telecommunications service provider. It is believed that a telecommunication specific AMP will increase compliance with the Act by helping deter anti-competitive practices by dominant telecommunications service providers in a deregulated environment.
The penalties would be paid to the Consolidated Revenue Fund.
