Outgoing Competition Commissioner calls for look at digital industries
Pecman says broadband internet is evolving and will need policy and enforcement response
Competition Bureau Commissioner John Pecman has taken on bread price-fixing, the real estate data monopoly and deceptive ticket practices over his five years as chief watchdog for consumers, but hopes his successor takes a deeper dive into the digital realm.
“The old bricks and mortar still matter, but if you are going to prioritize, the digital side is where one needs to keep focus,” Pecman said in an interview ahead of his last day on the job Wednesday.
Earlier this month and nearing the end of his five-year tenure, Pecman announced a review of the practices of Canada’s broadband internet providers that will be left to his interim successor, senior deputy commissioner Matthew Boswell, to oversee — but he also called for a closer look at future technologies such as wireless high-speed 5G networks.
“The whole digital space is going to continue to evolve and will require a lot of attention, both at the policy level as well as at the operations and enforcement level.”
His term, which began in June 2013, marked the first time a bureau staffer — he joined the organization in 1984 and rose through the ranks as an investigator, manager and executive — and nonlawyer has held the title. Pecman said that he and his team have been “extremely busy on the investigative front.” He pushed an approach that avoided going to court on every matter, instead hoping to convince corporations to settle.
“My first instinct was always to resolve matters outside the courts, having spent too much time before them and knowing how unpredictable and costly that whole process is,” he said. “We can do more because all of our resources aren’t tied up fighting a case.”
It was a lesson Pecman learned well, having inherited the Competition Bureau’s long-standing battle with the Toronto Real Estate Board around the board’s practice of blocking members from posting sales data online. The case was launched in 2011, and after several appeals, has yet to wrap up. TREB has said it will take its challenge to the Supreme Court of Canada,
leaving the status of the current ruling in limbo. That length of time between a case starting and concluding is “troubling,” Pecman said, because when such matters stretch on for so long, they can start losing their relevance.
The seven years of appeals and legal wrangling mean Canada’s online real estate market has been chilled for almost a decade while it thrives elsewhere, he said.
That drawn out battle is something Pecman hopes his bureau can avoid in its latest high-profile case, the alleged industry-wide bread price-fixing scandal that was uncovered when Loblaw came forward and implicated itself as well as competitors Walmart, Sobeys, Metro and Giant Tiger. That investigation is ongoing. The confessions of Loblaw and parent company George Weston Ltd, which also owns the Weston Foods bakery, gave them immunity from potential pricefixing penalties that could include fines of up to $25 million and imprisonment for up to 14 years or both.
The Competition Bureau’s controversial immunity program has been instrumental in uncovering price-fixing schemes that might not otherwise come to light, but it has also been criticized for allowing offenders to get away with crimes.
Pecman argues the program is necessary because price-fixing is so difficult to catch. He said Canada’s whistleblower policies are also similar to those used by over 150 competition authorities around the world and are “the No. 1 tool to detect, investigate and prosecute cartels.” He said companies that do get immunity through the policy still suffer because their reputation and brand often take a hit, and sometimes they face legal action. In the Loblaw case, Pecman said he knows of at least eight “private actions,” or lawsuits filed against it.
Another closely watched consumer issue he leaves behind is a case that alleges Ticketmaster and its parent company Live Nation Entertainment, Inc. used a deceptive practice known as drip pricing that saw customers pay sometimes more than 65 per cent above the advertised price. Ticketmaster has denied the allegations in a series of spirited letters sent to the bureau and the Competition Tribunal, a quasijudicial body. Case hearings aren’t scheduled until October 2019. The case could be precedent-setting and could pave the way for the bureau to take on other ticket sellers, but Pecman said that decision will be left up to his successor.
“That person” will, however, have to take on the bureau’s investigation into Postmedia and Torstar’s November deal to swap dozens of publications and close many of them. The bureau previously alleged that the companies engaged in “anti-competitive conduct contrary to the conspiracy provision.”
As for his legacy, he would like to be known for changing the bureau from being perceived as “a walled-off organization that just wanted to stick to its knitting and conduct its investigations in its offices” to one that takes a community approach to working with the business and legal community to ensure the economy is effective and competitive.