Commissioner of Competition Matthew Boswell speaks at Canada's Competition Summit hosted by the Competition Bureau Canada, in Ottawa, on Oct. 5, 2023.Sean Kilpatrick/The Canadian Press
Two years ago, Cineplex started charging some moviegoers $1.50 extra to buy a ticket online. The Competition Bureau saw deceptive marketing.
The bureau for decades was an afterthought. Today it is emboldened, bolstered by a forceful leader, a bigger budget and, most of all, stricter new rules. The bureau grounded its Cineplex case in the recently overhauled Competition Act, which features consumer-friendly changes that aim to better protect Canadians.
Cineplex’s advertised price didn’t clearly include the $1.50 fee – a case of “drip pricing.” In September, the bureau won. The Competition Tribunal concluded Cineplex deceived buyers and imposed a $39-million penalty, the many $1.50 charges paid to the company. (Cineplex said it will appeal.)
Competition law was last revised in the laissez-faire 1980s, when a business ethos of bigger is better reigned. In the absence of impactful enforcement, the bureau became a regulatory outpost. No longer. Canadian law has been rewritten to help revive an ossified economy defined by oligopolies in key industries.
It is an overhaul this space has strongly supported. While the Business Council of Canada in February called the changes arbitrary and capricious, claiming the new law could undermine competition, political leaders – Justin Trudeau, Pierre Poilievre and Jagmeet Singh – unanimously backed the bulk of the changes last December and this past May.
Changing the law is essential but only the first step. Enforcement is crucial. Matthew Boswell, a former Crown prosecutor, has led the Competition Bureau since 2018. He urged political leaders to change the law. He called out rot in the economy. Now, he has more funding and newly minted rules. Changes include everything from hidden fees and pro-worker rules on wage-fixing and no-poaching to a skeptical view of mergers and stronger rules against abuse of dominance. Big isn‘t bad but big isn’t always better.
In plain terms, the law – and enforcement – is about protecting ordinary people who are sometimes unfairly exploited by powerful companies wielding the relationship imbalance to their advantage. You don’t need an economics PhD to see the problems. Mr. Boswell and his peers in other countries are busy turning a new era of the law into a new era of enforcement.
In the U.S., companies that account for close to half the value of the S&P 500 stock market index are under the competition microscope. Government action in the past paid off in greater innovation and stronger growth, in the U.S. at least, from busting up monopolies of the early 20th century to the 1990s case against Microsoft, a rarity in that era. It helped Google grow from a startup to, this summer, a convicted monopolist, with a potential landmark remedy pending.
Mr. Boswell has launched numerous other salvos but there has not yet been conclusions of wrongdoing.
Groceries: The bureau in June obtained two court orders to get data from Sobeys and Loblaw about property controls, which have long been used by various companies and can prevent incursions from potential rivals. The bureau in August said property controls are justified only in limited situations. The bureau on Monday said it is looking at such controls in groceries in general.
Gasoline: In July, the bureau obtained a court order to get data from Kalibrate, whose pricing software is used by gas stations. The bureau is looking at whether there has been an “adverse effect” on competition.
Air travel: The bureau in July started a review of the airline business, its first use of new powers to conduct in-depth market studies, a tool long available to its foreign regulatory counterparts.
Real estate: The bureau this month obtained a court order to investigate potentially inflated fees charged by residential real estate agents, a situation this space decried in August.
There may be more salvos ahead. Think of how hard it is to cancel an online subscription. Or in food, where five companies own most grocers. Research this month by the Canadian Anti-Monopoly Project shows concentration exists throughout the food system.
The overhauled Competition Act will benefit Canadians and the economy for years to come. The changes, led by the Liberals, are a major accomplishment from this minority Parliament. Most of all, real change is finally happening. In the recent words of Mr. Boswell, buckle up.