Published online by Cambridge University Press: 18 July 2014
This article examines shifts in the regulation and governance of business crime in competition and deceptive trade practices law. It traces policies and enforcement in Canada's Combines Investigation Act/Competition Act from 1975–2005, a period of seismic shift in regulatory law during which formerly dominant Keynesian welfare-state discourses, practices, and policies were replaced by those characterizing the neo-liberal regulatory state. The Competition Bureau was a key player in this transition, by which competition policy became the primary regulatory mechanism of the modern state. The article's purpose is to analyse enforcement records, annual reports, and other documents from the Competition Bureau to show how priorities and practices have changed and to link these changes to shifts in governance associated with the transition from Keynesian economic philosophies to those of the neo-liberal state.
Cet article examine les changements au niveau de la réglementation des crimes commerciaux dans le domaine de la loi relative à la concurrence déloyale et aux pratiques commerciales trompeuses. L'auteur se penche, plus particulièrement, sur les politiques et les applications de La Loi relative aux enquêtes sur les coalitions et de la Loi sur la concurrence de 1975 à 2005. Cette période fut marquée par des changements importants dans la régulation juridique: les discours, les pratiques et les politiques keynésiens de l'État providence furent remplacés par ceux de l'État régulateur néolibéral. Le Bureau de la concurrence fut un acteur clé dans cette transition par laquelle les politiques sur la concurrence devinrent un mécanisme essentiel de régulation primaire de l'État moderne. Cet article analyse les documents relatifs à l'application des lois, les rapports annuels ainsi que d'autres documents du Bureau de la concurrence afin de démontrer, d'une part, comment les priorités et les pratiques ont changé et, d'autre part, comment ces changements régulatoires sont liés au remplacement des politiques économiques keynésiennes par celles de l'Élat néolibéral.
1 Competition Act, R.S.C. 1985, c. C-34. Competition and combines offences are defined as anti-competitive business practices designed to inflate profits and/or avoid loss.
2 S.C. 1889 (52 Vict.), c. 41.
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15 Consent orders typically allow the business seeking the take-over to agree to take particular actions (specified in the order) to avoid lessening competition in that sector “unduly.”
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25 While the Competition Bureau is obliged to publish this information, it is certainly another matter to obtain clarification on these records. Public-sector downsizing has removed many of the officials charged with collecting and presenting data, thus jeopardizing institutional memory and longitudinal records; see Szwajkowski, E. & Figlewicz, R., “Corporate Crime: The Case for a Database of Cases on Anticompetitive Corporate Behaviour,” in Research in Corporate Social Performance and Policy, ed. Post, James E. (Stamford, CT: JAI Press, 1998), 167Google Scholar. Our direct contact with the bureau's Information Centre confirmed these difficulties. Questions about changes to the recording of enforcement data were never answered, despite numerous attempts. Dozens of phone calls and e-mail messages to the bureau were made when the annual reports failed to provide consistent data from year to year, and two official inquiries were submitted through the bureau's Web site, all to no avail. With no one at the Information Centre able or willing to address our questions, we turned to alternative sources for confirmation and clarification on the bureau's enforcement publications (see Stanbury, W.T., “Expanding Responsibilities and Declining Resources: The Strategic Responses of the Competition Bureau, 1986–1996,” Review of Industrial Organization 13 (1998), 205CrossRefGoogle Scholar), and to interviews. Ironically, our fruitless attempts to obtain information will boost the statistics on information requests statistic for 2006. One wonders whether other information requests were similarly ignored–there are no measures of “customer satisfaction.”
26 Bill C-23, passed as An Act to Amend the Competition Act and the Competition Tribunal Act, was designed to “strengthen” and “modernize” the Competition Act. However, its provisions are primarily procedural; it contains no new measures, criminal or civil, to enhance consumer protection and actually promotes decriminalization. These changes, like most of the earlier ones, received minimal coverage in mainstream media; see, e.g., Downey, , “Hudson's Bay Fined”; Annual Report 1997Google Scholar.
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29 OECD, “Updated Report on Competition Law and Institutions,” in OECD Country Studies: Canada (OECD, 2004), 20Google Scholar. Since 2000 the Competition Bureau has submitted a limited set of data on “Criminal Matters” to the OECD as part of its internationalizing initiatives.
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38 Interview by Laureen Snider, August 1, 2007. Other evidence suggests that the Competition Bureau was spared the most draconian cuts. Although the size of the civil service decreased dramatically from 1993 onward—see Fudge, Judy and Cossman, Brenda, “Introduction: Privatization, Law and the Challenge to Feminism,” in Privatization, Law, and the Challenge to Feminism, ed. Cossman, Brenda and Fudge, Judy (Toronto: University of Toronto Press, 2002), 3Google Scholar—the Competition Bureau's budget and employee base increased from $7,972,000 and 276 person-hours in 1978/1979 to $37,900,000 and 393 full-time employees in 2003/2004. While this is not much, given that their legal responsibilities and the price of everything from consultants to lawyers increased, the bureau was not as badly hit as many other government departments (particularly Environment and Transportation).
39 Annual Report of the Commissioner of Competition for the Year Ending March 31, 2005, on the Enforcement and Administration of the Competition Act, Consumer Packaging and Labelling Act, Precious Metals Marking Act, Textile Labelling Act (Ottawa: Industry Canada, 2005), 38Google Scholar [Annual Report 2005].
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42 Abuse of dominant position is defined as “predatory, exclusionary or anticompetitive behaviour which adversely affects competitors and which lowers social welfare.” Church and Ware, ibid., 86 [emphasis added].
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45 But to highlight this failure is not to argue that a profusion of small competing businesses in every sector is the social goal of choice. Historically, the developed capitalist countries have all taken this route (a route China and India are arguably now pursuing), which produced chaos, the classic “race to the bottom” with all units minimizing costs by first resisting, then ignoring, worker protection, minimum wage laws, and environmental and safety standards. See Carson, W.G., “White Collar Crime and the Enforcement of Factory Legislation,” British Journal of Criminology 10 (1970), 383CrossRefGoogle Scholar.
46 For examples see Glasbeek, Harry, Wealth by Stealth (Toronto: Between the Lines Press, 2002)Google Scholar; Monbiot, George, The Captive State: The Corporate Takeover of Britain (London: Macmillan, 2000)Google Scholar. Obviously, individual companies, contractors, and suppliers vary widely on all these criteria. But even the most socially responsible CEOs are restricted by their legally mandated need to deliver as much profit as possible to investors.
47 “Fortune 500: Our Annual Ranking of America's Largest Corporations,” Fortune (May 5, 2008), http://money.cnh.com/magazines/fortune/fortune500/2008/full_jist/
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52 This is not to say that opposing forces are absent. With the bursting of the technology-inspired market bubble of the 1990s, new oppositional stockholder-rights groups (a component of “pension fund capitalism”) began to seek a voice in corporate decision making, questioning executive compensation packages and lobbying for more transparency around debt loads, environmental practices, and labour conditions. Yaron, Gil, Canadian Shareholder Activism in an Era of Global Deregulation (Vancouver: Shareholder Association for Research and Education, 2002)Google Scholar. With 24-hour business news channels (electronic and print), investigative financial journalism has come into its own. The Globe and Mail and the New York Times publish annual “report cards,” rating corporations on their environmental and corporate social responsibility, the independence of their boards of directors, etc. And electronic technologies offer the potential, highly restricted at this date, to use electronic surveillance to monitor trading activities and CEO decision making. Whether this potential will be realized, however, depends on the relative power of the parties—and, as argued above, there are few signs that the stranglehold of transnational capital is weakening.
53 Monbiot, The Captive State.
54 Fudge and Cossman, “Introduction.”
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61 See also Friedrichs, David O., Trusted Criminals: White Collar Crime in Contemporary Society (Belmont, CA: Wadsworth Publishing, 2007)Google Scholar; Rosoff et al., Profit without Honor.
62 Annual Report, Director of Investigation and Research: Competition Act (Formerly Combines Investigation Act) for the Year Ended March 31, 1986 to the Hon. Harvie Andre, Minister (Ottawa: Consumer and Corporate Affairs, 1986)Google Scholar; Annual Report 1987; Annual Report for the Year Ended March 31, 1988 to the Hon. Harvie Andre, Minister: Director of Investigation and Research, Competition Act (Ottawa: Consumer and Corporate Affairs, 1988)Google Scholar; Annual Report 2005.
63 Annual Report, Director of Investigation and Research: Combines Investigation Act for the year ended March 31, 1985 to the Hon. Michel Côté, Minister (Ottawa: Consumer and Corporate Affairs, 1985)Google Scholar; Annual Report 2005.
64 In the 1984/1985 annual report the Marketing Practices Branch is given an entire section dedicated to outlining their activities for the year. In recent reports this has significantly decreased.
65 While the term “consumer” has a variety of uses, it appears 125 times in the 2005 annual report, compared to only 20 in 1975; use of the term “public interest” peaked in 1983, with 18 appearances, and was down to seven instances by 2005.
66 Interview by Laureen Snider, August 1, 2007.
67 Competition Policy Review Panel, “Canada's New Government Creates Competition Policy Review Panel” (News release, July 12, 2007), http://www.ic.gc.ca/epic/site/cprp-gepmc.nsf/en/00008e.html.
68 Interview by Laureen Snider, August 1, 2007.
69 Scott, Sheridan, “Looking Forward: The Bureau Priorities for 2007–2008” (Address at the CBA/IBA Spring Conference, Toronto, May 3–4, 2007), http://www.competitionbureau.gc.ca/epic/sitc/cb-bc.nsf/en/02324e.htmlGoogle Scholar.
70 Interview by Laureen Snider, July 31, 2007.
71 Scott, “Looking Forward.”
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