The Competition Bureau, which yesterday issued a call for confidential reports of anti-competitive behaviour in Canada’s digital economy, today said that the initiative may lead to enforcement actions.

On Wednesday the bureau issued a “call-out” for businesses and other parties to voluntarily provide information on what companies in the digital economy may be doing to harm competition as part of a ramp up in scrutiny on the practices of digital behemoths.

Jean-Philippe Lepage, a spokesperson for the bureau, told the Star Thursday that the call-out is part of a broader focus on emerging issues in Canada’s digital economy “and in fact may lead to new enforcement actions,” although he noted the bureau is required by law to conduct its work confidentially and therefore “cannot confirm whether we have any ongoing investigations in this area.”

The request for the business community to provide examples of “strategies that firms may use to hinder competition in certain core digital markets” was unusual and there has been speculation as to what the bureau plans to do with the information.

Toronto-based antitrust and advertising lawyer Steve Szentesi said he believed the bureau could be gearing up for new legal action against U.S.-based tech giants and said it is almost certainly sharing information with the federal and state governments in the U.S. that have commenced prosecutions.

“It’s got to make some companies nervous,” said Szentesi. Given that the bureau has pursued several recent cases against entities such as Ticketmaster over allegedly misleading online advertising “you can bet the guys on Bay Street are making sure their clients are fully compliant.”

The bureau’s initiative follows the appointment of a new commissioner, Matthew Boswell, who is focused on supporting digital competition, the addition of digital antitrust enforcement personnel and increased preventive measures, such as greater monitoring of the online activities of digital giants such as Facebook and Google, Szentesi added.

Mike Caldecott, a senior associate in the competition, antitrust and foreign investment group with the Toronto office of law firm McCarthy Tétrault, said that he believes the call-out for information “seems like an exploratory, initial thing,” but he added that “it doesn’t mean the bureau hasn’t been active in other ways that are not in the public. This could be a sort of complement.”

Caldecott said that the bureau can’t force companies to comply with its request for examples of anti-competitive behaviour, but “that doesn’t mean the bureau doesn’t have powers to elicit enforcement in other ways.”

The Information Technology Association of Canada, responded to the bureau’s initiative, saying that the tech industry welcomes its focus on targeting anti-competitive conduct in the digital economy.

“It’s important to note that the tech industry is always ready to co-operate with government,” said CEO Angela Mondou. She added that lawmakers need to find “a clear balance between being too prescriptive and setting clear rules for the tech of the future.”

A Facebook spokesperson said the company is “committed to working with and being accountable to governments across the world.” Google did not immediately respond to a request for comment.

A media sector association, meanwhile, said the Competition Bureau call-out could help newspapers and other traditional media companies that have seen ad dollars siphoned off by digital giants.

John Hinds, president of News Media Canada, said the bureau’s increasing focus on digital competition is a positive, if overdue, step that could encourage regulatory changes that would grant legacy media greater copyright protection.

Christopher Waddell, program director for Carleton University’s bachelor of media production and design program, said that despite the initiative Canada still lags well behind other countries in investigating anti-competitive behaviour by global technology companies.

“It feels like we’re about four or five years behind the rest of the world.”

The European Union has been exploring this issue for a long time, he said, dating back to a case that began in the late 1990s against Microsoft. The case concluded in late 2009 with Microsoft agreeing to give users a choice of which web browser to use rather than requiring them to use its Internet Explorer browser, and paying more than a billion pounds in fines.

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The European Commission also recently announced it opened a formal antitrust investigation into Amazon, while the U.S. Department of Justice has opened one into major online platforms.

“They’ve been going on in other places for a long time,” said Waddell. “We don’t seem to have caught on to the potential anti-competitive practices that may exist until, I guess, now.”

With files from The Canadian Press

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