Law Times

Law Times • sepTember 15, 2014 Page 11 www.lawtimesnews.com Pecman gets positive reviews after first year Competition commissioner focusing on transparency, accessibility By Julius Melnitzer For Law Times ore than a year after John Pecman be- came Canada's new- est commissioner of competition in June 2013, the reviews of his performance are mostly positive. As the first commissioner to have risen to the position through the Competition Bureau's ranks and the first economist to hold the position, he was bound to come under special scrutiny as his predecessors were all lawyers as are virtually all of his counter- parts around the world. But Pec- man, who had served 12 months as interim commissioner prior to June 2013, appears to be passing muster. "By and large, Pecman is deliv- ering," says Chris Hersh of Cassels Brock & Blackwell LLP's Toronto office. "The bureau's not perfect under Pecman and it won't be perfect after his tenure but he has made the bureau more predict- able and he's been very accessible to both lawyers and clients." The upshot has been that the business community is feeling somewhat more confident in dealing with the agency and com- petition issues generally. "The biggest things Pecman has been selling are transparency, accessibility, and responsiveness," says Dany Assaf of Torys LLP's Toronto office. "Relative to where we were be- fore his appointment, he has defi- nitely delivered." Pecman's appointment came in a year that saw Canadian courts and tribunals produce more significant competition law decisions than ever. "The two previous years, 2011 and 2012, saw unprecedented lev- els of enforcement," says Adam Fanaki of Davies Ward Phillips & Vineberg LLP's Toronto office. "But from the perspective of competition law jurisprudence, 2013 was unlike any other year." Not that Pecman is going to have any trouble understanding or acting on the rulings. With some 30 years at the bureau as an investigator, manager, and execu- tive (most recently as senior dep- uty commissioner of the criminal matters branch), it's unlikely that even the most arcane legalities or any other aspect of competition law will escape him. "Before his appointment as commissioner, Pecman had been in every other significant role that exists at the bureau," says Paul Collins of Stikeman Elliott LLP's Toronto office. In October 2013, in what he called his "first serious public- speaking engagement since my appointment," Pecman spoke of a "new approach" that he called a "bureau without borders." He described the approach as one where the Competition Bureau's reach wasn't strictly limited by its resources or constrained by in- ternational or domestic jurisdic- tional boundaries. In this vision, shared compliance — the concept that the bureau and the legal and business communities share the responsibility to promote com- petitive markets — was central. By way of example, the com- missioner referred to the Com- petition Tribunal's decision in The Commissioner of Competi- tion v. Visa Canada Corp. and MasterCard International Inc. The tribunal ruled that Visa and MasterCard hadn't engaged in re- sale price maintenance when they required the operators of their payment systems networks to impose certain conditions on the retail merchants using them. The tribunal reasoned that because what the networks were provid- ing to the merchants was different from what the credit card services provided to the networks, no re- selling had occurred. What may be more significant, especially from a policy perspec- tive, was the tribunal's observa- tion that even if the allegations had been proven, it wouldn't have issued the order sought by the commissioner as it would have amounted to a "blunt instrument" requiring constant adjustment in a varied "merchant sector" and "replaced one set of distorted in- centives by another." Pecman took note. The bureau decided not to appeal the ruling, hoping instead to "work collab- oratively" with Visa, MasterCard, and other stakeholders to achieve a result that would be "benefi- cial to both Canada's consumers and merchants alike." As further evidence of the bureau's new ap- proach, Pecman cited recent con- sent agreements with companies such as Interac Inc., Agrium Inc., and Air Canada. He also cited the guilty pleas by Hershey Canada Inc. in the chocolate conspiracy case, Yazaki Corp. and Furukawa Electric Co. in the motor-vehicle components case, Cathay Pacific Airways Ltd. and LATAM Air- lines Group in the air cargo mat- ter, and JTEKT Corp. in the bear- ings proceedings. Pecman went on to promise to co-operate with the bar, put new emphasis on "transparency, certainty, and predictability" in the bureau's operations and ap- plication of the law, and intervene strategically with other regulators and government agencies to raise the profile of competition policy considerations in their decisions. "There has been a clear, con- certed, and proactive effort to strengthen relationships and try to infuse competition policy thinking into other regulatory bodies, like the [Canadian Radio- television and Telecommunica- tions Commission], as these bod- ies attempt to come to grips with broader issues," says Neil Camp- bell of McMillan LLP's Toronto office. For the time being, the merger review process appears to be a prime beneficiary of new policies at the bureau. "There's a fresh approach that focuses on getting anything that's very straightforward in and out of the door quickly," says Brian Facey of Blake Cassels & Gray- don LLP's Toronto office. "Also, the staff is far more engaged and transparent in expressing their concerns about a particular mar- ket or product by way of letting parties in on what's going on in the bureau's mind." Another area in which the bu- reau-without-borders approach is having an effect is in the treat- ment of multijurisdictional merg- ers. In early December, the bureau issued a no-action letter regarding Thermo Fisher Scientific Inc.'s acquisition of Life Technologies Corp., two U.S. multinational corporations. In approving the merger, the bureau cited a remedy ordered by the European Com- mission that required divestiture of certain assets. "The bureau had issues on this transaction, but it allowed the U.S. and Europe to be the lead juris- dictions and accepted the global remedy they imposed," says Facey, who represented Thermo Fisher Scientific in Canada. "It's a sign of the confidence that the bureau has in its own abil- ities and its willingness to resort to efficiencies of this kind in using its resources." Pecman has also shown some of the recent setbacks the bureau has suffered in litigation, such as the Visa case, haven't daunted him. While most of them arose from investigations instigated before his appointment, he has indicated the bureau will be more careful about bolstering its cases properly before bringing them. "John is using some of the older arrows in the tool shed's arsenal, such as s. 11 [which gives the bureau wide powers to ap- ply to the Federal Court for oral and document discovery], much more than his predecessor did," says Collins. "For example, in the past the bureau would likely start an abuse-of-dominance inquiry with an informal approach to a party, but these days they're likely to initiate an investigation with a s. 11 order even if a party is willing to co-operate and has no history of non-compliance." Indeed, it has been almost a quarter century since the bureau resorted, as it has recently, to s. 11 oral discovery in abuse cases. "It's a bit of an old-school approach," says Collins. "John genuinely believes that going the formal route at the out- set of an investigation f leshes out the issues and so facilitates settle- ment down the road." LT FOCUS Order # 986376-65203 $149 Softcover approx. 700 pages September 2014 978-0-7798-6376-1 Shipping and handling are extra. 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