Canada's competition watchdog: we have teeth and will use them

Wed Jan 30, 2013 4:08pm EST

* Bureau says reliance on voluntary information hinders work

* Will use existing powers in all but exceptional cases

OTTAWA Jan 30 (Reuters) - Canada's competition watchdog will flex its legal muscle more forcefully from now on to get information from companies under investigation for abusive practices, the agency's interim commissioner warned on Wednesday.

The Competition Bureau, an independent law enforcement agency, has the power to obtain records or question individuals under oath in non-merger cases, but has recently been trying to get information voluntarily, said John Pecman, interim commissioner.

Pecman said that approach has not worked well because companies delay their responses, provide incomplete information, or demand the probe be dropped altogether.

"While Einstein didn't practice antitrust law, in this context, I believe the bureau must take heed of the very perceptive observation, frequently attributed to him, that the definition of insanity is doing the same thing over and over again and expecting different results," he said in a speech that was posted on the agency's website.

He said the agency will not be so lenient in future.

"So, going forward, the bureau's first course of action in obtaining information from the target of a formal inquiry in non-merger cases will be, for all but exceptional cases, obtaining a legally binding section 11 order from the court," he said.

In Canada's competition law, section 11 allows the Competition Bureau to force companies to turn over documents and other evidence.

Pecman did not name companies that had hindered the bureau's investigations.

The Competition Bureau has already used compulsory orders to require the Canadian branches of several foreign banks to produce records related to possible manipulation of the London Interbank Offered Rate (Libor).

The Canadian branch of the Royal Bank of Scotland Group Plc has taken the bureau to court to challenge its right to compel the production of documents from outside Canada.

The bureau also recently sued Canada's three leading phone companies BCE Inc's Bell Canada, Rogers Communications Inc, and Telus Corp for what it said was misleading advertising about their texting services.

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