Hofley anticipates the Competition Bureau will crack down on Competition Act enforcement, and will continue its focus on the digital economy
Randall Hofley, a partner and expert in competition law at Blake Cassels & Graydon LLP, recently returned from a two-year secondment as general counsel and senior enforcement advisor at the Competition Bureau Legal Services. The secondment occurred under the federal government’s Interchange Program which allows people in the private sector to gain public sector expertise.
The bureau investigates violations of the Competition Act and often requires counsel for legal advice in respect of those investigations. As a part of the senior management team during his posting, Hofley played an active role in the Competition Bureau’s efforts to streamline the management of enforcement and policy matters. He was also instrumental in helping the bureau to enhance the transparency of its endeavours through enforcement guidelines in the areas of criminal cartels, civil competitor collaboration, merger efficiencies, abuse of dominance and intellectual property as well as policies that enhance the rigour of the bureau’s enforcement efforts internally.
“This will provide businesses with a better understanding of the bureau’s enforcement approach and if the bureau chooses to litigate cases, it will allow it to be more effective and efficient before the tribunal and the courts,” says Hofley.
During his secondment Hofley worked on a number of high profile cases with the Competition Bureau including a case against the Vancouver Airport Authority in which the Competition Tribunal was tasked with considering whether the airport’s decision to limit the number of catering providers supplying airlines could be pursued as an abuse of dominance. Although the Competition Tribunal dismissed the application for an order to prohibit the airport authority from committing allegedly anti-competitive acts, it also found that the airport authority’s conduct could be subject to abuse of dominance.
“On the one hand it confirmed the breadth of the scope of the Competition Act but on the other hand it found, based on the facts, that it wasn’t an anti-competitive act and it also found that the decision didn’t substantially lessen competition,” says Hofley.
In another interesting case that Hofley was involved in, the bureau obtained its first ever temporary injunction on consent. Under this injunction FlightHub Group Inc. was prohibited from using false or misleading marketing practices on its websites, flighthub.com and justfly.com. The Bureau is investigating FlightHub’s representations for services such as seat selection and flight cancellation, which result in hidden fees. The company has been accused of generating millions of dollars in revenue from these fees.
The bureau has been heavily focused on the digital economy for some time, and Hofley anticipates this focus will continue as the bureau recognizes the importance of the innovation that digital businesses bring to Canadians.
“What’s crucial to me is that the bureau continues to apply law and economics to these issues in a principled manner consistent to what they’ve done in the more traditional side of the economy,” says Hofley. He also expects to see a continued focus on the expansion of intelligence gathering for the merger notification unit, to ensure that transactions involving nascent competitors should not escape merger review even if their revenues are under the required thresholds.
Hofley warns that the bureau’s management intends to be more active in its enforcement of the Competition Act so businesses should be prepared.
“Businesses will need to be proactive in anticipating the bureau’s priorities,” he says. “In considering any transactions it’s all the more important to get advice early on to ensure your actions will not engage the interests of the bureau, or if they do, be in a position to explain the conduct in a manner that avoids the cost and time of a protracted review or investigation.”
For his part, Hofley is confident that his experience at the Competition Bureau has made him a better competition law advisor and litigator for his clients at Blakes as he now has a clearer understanding of the bureau’s public interest mandates across all the different contexts they operate in.
“This knowledge will benefit clients with respect to compliance with the act and any enforcement action they may find themselves subject to,” he says.
