Written response from the Ministry of Public and Business Service Delivery to the consultation on the Bulletin on Amendments to the Abuse of Dominance Provisions

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December 22, 2023

Deputy Commissioner Krista McWhinnie
Monopolistic Practices Directorate
Competition Bureau
50 Victoria Street
Gatineau, Quebec
K1A 0C9

Dear Deputy Commissioner McWhinnie:

Thank you for the opportunity to provide feedback on the Bulletin on recent updates to the Guidelines for Enforcement of Abuse of Dominance Provisions in the Competition Act, following amendments to the Competition Act in June 2022.

Ontario appreciates the detailed information and useful examples provided in the Bulletin, which provides clarity about the intent and effect of the legislative changes. However, Ontario notes that the amendments to the Competition Act do not address harms caused to consumers and small businesses by anti-competitive behaviour on the part of businesses seeking to establish dominance in a sector. While this issue is out of scope for the review of the Bulletin, Ontario encourages the Competition Bureau to consider the future expansion of abuse of dominance provisions in the Competition Act to capture such behaviours.

Our observations and comments with respect the Bulletin are set out, below.

Plain-language information about the Competition Act and Abuse of Dominance Provisions

There is a lack of education and awareness about manipulative digital market tactics, competition-related user protections and government policies. Small businesses and consumers may be unaware of manipulative digital practices that dominant market players routinely use. These tactics include:

• Deceptive marketing: Sellers purposefully not disclosing prices or pushing customers to pay more than an advertised price through the addition of fees at the end of the transaction. This can lead to unforeseen or unreasonable price increases for goods and services.
• Dark patterns: The use of processes that are intentionally complicated, inconvenient, or not user-friendly to unsubscribe from or cancel the delivery of services can lead to customers continuing to pay for or receive products they do not want.

Information about consumer protections against abuse of dominance practices, how governments are responding to them, and key competition-related policies are often difficult to navigate or not accessible. This leads to small businesses and consumers being unaware or uninformed about their rights.

Recommendation: Make plain-language information about the Competition Act and abuse of dominance provisions publicly available and accessible.

Providing information in a user-friendly and accessible format makes it easier for small businesses and consumers to engage with the government. Increasing the availability and accessibility of government information may increase awareness of manipulative digital market practices and available consumer protections, thereby empowering consumers and small businesses.

Public to report on harmful market behaviour

The Bulletin does not set out a clear consumer reporting or accountability function. The standard complaint form is not a streamlined tool for use by small businesses and consumers affected by deceptive digital market tactics to report their experience to the Bureau.

Recommendation: Explore providing a clear and integrated mechanism for the public to report on manipulative market behaviour.

Ontario also notes that restricted data sharing abilities between federal, provincial, and municipal governments leads to silos of information about manipulative digital market tactics, potentially impeding reporting and redress. To complement increased awareness among consumers and small businesses, and to better address illegal practices in digital platforms, there is an opportunity for provincial governments to align with or support enhanced federal reporting and accountability functions through data sharing agreements, and to provide information to the public in support of increased reports to the Competition Bureau.

Algorithmic pricing discrimination

Bias and discrimination from digital price personalization via algorithms exist. Sellers with a dominant online presence can use algorithms to tailor prices to specific consumers with different profiles – a practice known as hyper-dynamic pricing. These algorithms can unintentionally use biased data that results in discriminatory outcomes and unfair price changes, including presenting different prices to people of different races, genders, incomes, and locations.

Recommendation: Consider limitations or prohibitions on algorithmic pricing discrimination.

To align with greater calls for measures to combat digital discrimination, strengthened protections against algorithmic and hyper-dynamic pricing are needed to ensure fairness for all consumers. Such protections would be consistent with Ontario’s effort to provide guidance and best practices about controls to minimize potential bias from Artificial Intelligence, and with the Anti-Racism Directorate’s work to prevent systemic racism in government policy, legislation, programs, and services.

Data

Consumers may not be aware of, and have limited control over, the personal information data held by dominant businesses. When signing up for services, consumers have limited ability to meaningfully opt in or out of the collection, use and disclosure of personal information. This may be exacerbated by limited awareness of the effect and extent of their consent to the use and disclosure of personal information as a result of inaccessible privacy policies or policies or consent that may have changed over the course of time. Moreover, dominant businesses often assume a “gatekeeper” function that restricts access or use by smaller businesses. Consumers may feel locked in as their information is held by an organization and it cannot easily be moved to a competitor.

Recommendation: Require updated plain-language privacy policies that clearly identify personal information data holdings.

To align with the movement towards increased transparency, particularly for minors and vulnerable populations, the Bureau is encouraged to explore options to enable consumers to easily see the results of any consent that has been provided. In the case of mergers, consideration should be given to ensuring that the privacy policies of the merged entity and the impacts on the data holdings are clearly identified and shared with consumers prior to completing the merger.

Recommendation: Require data portability and/or ability for consumers to easily retrieve and opt-out.

This could include providing clear consent-based options for consumers up front.

Agreements Between Competitors

Farm equipment distributors continue to consolidate the market by incentivizing single-brand dealerships and terminating dealership agreements with dealerships who sell multiple brands. Dealers offering short line manufacturing equipment from competing brands are not treated equally for financing promotions of inventory. Such conduct should be reviewable under the abuse of dominance provisions where they have an anti-competitive purpose and have the effect, or the likely effect, of substantially harming competition. In addition, highlighting this scenario as an example would be beneficial in combating anti-competitive conduct.

Information Sharing

Large market shares of a few retailers and the resulting market power relative to small suppliers has been identified by SME domestic food processors as a challenge that puts them at a competitive disadvantage. The Bulletin notes that information sharing may increase the risk of “conscious parallelism,” a form of coordination between firms without an agreement between them.

Ontario has heard that major retailers may ask processors for information about formulation and costing as a condition to purchase from them. Stakeholders have been concerned that this intelligence could potentially result in retailers using the information for the benefit of products in their own brand lines. In setting out examples of anti-competitive conduct, it would therefore be beneficial to include requirements from dominant firms for smaller processor to share their formulation and costing as a condition of purchase.

We thank you again for the opportunity to comment on the Bulletin and Guidelines. Ontario will be following further action by the Competition Bureau and federal government with interest as we work to support Ontario’s economic growth and innovation in the marketplace.

Sincerely,

Barbara Duckitt
Assistant Deputy Minister
Policy, Planning and Oversight Division
Ministry of Public and Business Service Delivery

 

c:    Teepu Khawja, Assistant Deputy Minister, Consumer Protection Ontario, Ministry of Public and Business Service       Delivery
Melissa Kittmer, Assistant Deputy Minister, Policy and Data Division, Ministry of Public and Business Service Delivery
Rakhi Lad, Assistant Deputy Minister, Ministry of Red Tape Reduction
David Hagarty, Assistant Deputy Minister, Ministry of Agriculture, Food and Rural Affairs