Uncertainty Continues in Application of Regulated Conduct Defense
The Competition Bureau (the Bureau) recently released for consultation a revised draft Technical Bulletin on "Regulated" Conduct (the Draft Bulletin) setting out the Commissioner of Competition's approach to enforcement of the Competition Act where the impugned conduct may be regulated by another federal, provincial or municipal law or legislative regime.1A review of the Draft Bulletin indicates that the Bureau has considerably narrowed the scope of the defence - subject to further clarification by the courts. Comments are requested by February 3, 2006.
The Draft Bulletin draws an important distinction between conduct regulated by federal laws as opposed to conduct regulated by provincial laws. With respect to federal laws, it states that in circumstances where a party is unable to reasonably comply with both the Competition Act and another federal law, the Bureau will not pursue a matter under the Competition Act if Parliament has articulated an intention to displace competition law enforcement either explicitly through legislation or implicitly by establishing a comprehensive regulatory regime that authorizes a regulator to act inconsistently with the Competition Act.2 Moreover, the Bureau appears to recognize that in the context of conflicting federal laws, the regulated conduct defence is applicable both to the criminal provisions and the reviewable practice provisions of the Competition Act. However, the Bureau's approach to impugned conduct authorized by provincial regulatory laws is more restrictive and uncertain.
In the context of provincial regulatory laws, while the Bureau recognizes that the regulated conduct defence is a common-law exception to the doctrine of federal paramountcy, it only definitively acknowledges the application of the defence in the context of section 45 conspiracy offences. With respect to other criminal provisions of the Competition Act, the Bureau, citing the Supreme Court's decision in Garland v. Consumers Gas Co.3, suggests that reliance on the regulated conduct defence requires evidence that Parliament intended the application of such a defence. 4 Moreover, the Bureau seriously questions the applicability of the regulated conduct defence to the (civil) reviewable practice provisions when they conflict with provincial statutes, based upon its claim that the "leeway language" referenced in Garland and contained in section 45 of the Competition Act ("undue" lessening) does not appear in the civil provisions (which are largely subject to the "substantial" lessening standard). While the Bureau does not go so far as to reject the applicability of the defence to reviewable practices, it says that in the context of provincial laws the Bureau's approach will merely be informed, but not governed, by the regulated conduct defence jurisprudence.
Finally, the Draft Bulletin openly states the Bureau's intention to develop the case law in this area and suggests that the Bureau will also explore a legislative resolution to the ambiguity surrounding the regulated conduct defence. The Bulletin - even when finalized - will not be the final word on these issues.
FOOTNOTES
[1] The Draft Bulletin is intended to replace the Bureau's 2002 Information Bulletin on regulated conduct, which was withdrawn in August, 2005 following extensive criticism that the Bureau had failed to seek stakeholder input before publication and therefore the Bulletin did not accurately reflect the jurisprudence relating to the regulated conduct defence.
[2] The Bulletin provides no examples, however, of any such alternative regimes. Whether it now considers review of the proposed acquisition of a radio or TV broadcaster by the CRTC on public interest grounds to qualify, as was the subject of recent litigation (see Astral Média Inc. v. Le Commissaire de la concurrence et al. and Télémedia Radio Inc. v. Le Commissaire de la concurrence, Federal Court - Trial Division, Court File Nos. T-2256-01 and T-2256-02), is not clear.
[3] [2004] 1 S.C.R. 629 ( "Garland").
[4] If such Parliamentary intent is absent, the Bureau states that it may nevertheless exercise its discretion not to pursue an inquiry if it is not in the public interest to do so.
