Bringing competition to the digital age

Sitting in the boardroom of his Gatineau, Que. office, his glasses pushed on to his head and a Starbucks venti sitting untouched in front of him, Matthew Boswell is describing his ambition for Canada’s top competition watchdog.

Bringing competition to  the digital age
Matthew Boswell

Sitting in the boardroom of his Gatineau, Que. office, his glasses pushed on to his head and a Starbucks venti sitting untouched in front of him, Matthew Boswell is describing his ambition for Canada’s top competition watchdog.

“My vision for the organization is tied to the digital economy and the data-driven economy, to be a world-leading enforcement agency in terms of competition issues in the digital economy,” he says.

While the Competition Bureau has existed for decades, Boswell is facing new challenges that many of his predecessors could likely never have imagined.

Data is a valuable commodity. Many governments and regulators are having difficulty keeping up with the pace of change in the digital economy.

“The world is moving a lot more quickly than it was 20 years ago, and enforcement agencies around the world and across Canada need to be able to move quickly as well; otherwise, by the time we get to things, they could be irrelevant to Canadian consumers,” says Boswell, who was appointed Canada’s competition commissioner in February after holding the job on an interim basis since May 2018.

Nestled in an office tower across the river from Parliament Hill, the Competition Bureau’s offices are a long way from where Boswell started his legal career on Bay Street in Toronto. However, they’re only a stone’s throw from where he grew up and overlook the former site of the E.B. Eddy factory where his father, Edward Boswell, rose through the ranks to become president.

Boswell grew up in Ottawa and attended Ashbury College, an exclusive private boys school. When his family moved to Toronto in the 1980s, he attended another private school — Trinity College School in Port Hope.

At Queen’s University, Boswell attended law school after completing a BA in history.

“I’m not one of those people who at age 10 knew that the only thing I wanted to do in life was be a lawyer,” he explains.

“But I did have a sense that it might be something that worked with my personality, my strengths, my weaknesses.”

Boswell started his career in 1996, articling in Toronto at Smith Lyons, then working as an associate. But after only three years, Boswell quit Bay Street to become a Crown prosecutor so he could spend more time in court.

“I took a 50-per-cent cut in pay when I joined the Toronto Crown’s office, which wasn’t so great two weeks before my wedding,” he says with a wry laugh.

While Boswell worked on a wide variety of cases, it wasn’t long before he became “the gun Crown,” responsible for prosecuting gun crimes. At the time, there were so many shootings that 2005 became known as “the summer of the gun.”

After a brief stint back in private practice with friends at the small Toronto law firm Ormston List Frawley LLP, Boswell moved in 2007 to a special “boiler room” unit set up by the Ontario Securities Commission.

“It was great to be working with friends, but I realized that my true calling was the chase of wrongdoing or alleged wrongdoing.”

Composed of former Crown prosecutors and white-collar crime investigators, the boiler room unit went after crooks selling shares in fictitious companies to trusting investors in Canada and the United States.

“It was very rewarding. It was also sad to see people lose their life savings,” Boswell recalls. “I remember calling one witness who was, I believe, in his late 60s or 70s and he and his wife had lost literally everything and he had to go back to work at that stage in his life when he should have been enjoying his retirement.”

The unit was successfully bringing boiler room scam artists to justice when former commissioner Melanie Aitken persuaded Boswell to work with the Competition Bureau’s criminal matters branch. He started there in January 2011 on a secondment and liked it so much he stayed.

“I think, at a macro level, the work we do in all our different enforcement areas and in our competition promotion areas is incredibly important for Canadian consumers and the Canadian economy,” says Boswell. “We do a whole spectrum of work here, from very much criminal mass marketing fraud to criminal price fixing and bid rigging to civil, deceptive marketing practices — which we have done a lot of work on in the last several years and will continue to do in the digital economy — to abuse of dominance, which is large firms engaging in anti-competitive acts that lessen competition in the economy.”

The Competition Bureau’s mandate to review mergers also plays an important role in maintaining competition, he says.

In fact, if there is anything that keeps Boswell up at night it is a concern that Canadians don’t realize just how important competition is to the economy.

“Competition is, flat out, in my opinion, the key driver of innovation and productivity increases in the economy. If we want to have a vibrant Canadian economy that is inclusive, it has to be one that is competitive, [where] there’s a level playing field . . . trust in the digital economy [and where] small and medium-sized enterprises can engage and get a toe-hold and build a presence in the economy.”

Under Boswell’s leadership, the Competition Bureau appears poised to become more dynamic and to build on its past successes.

Boswell points to the bureau’s pursuit of Canadian car rental companies for drip pricing, which means advertising a price that is impossible for a consumer to actually get.

“We had settlements with the largest car rental companies in Canada and they ended up paying something in the range of $6 million in administrative monetary penalties. We have ongoing litigation against Ticketmaster for similar allegations of drip pricing in terms of the price that you would pay for a concert ticket.

“Those cases all have a significant component that is in the digital economy.”

Recently, the bureau obtained court orders to force executives at Postmedia and Torstar to answer questions about their decisions to close newspapers. It also got a court order to get copies of complaints about alleged deceptive marketing practices by Bell Canada.

One challenge in tackling wrongdoing in the digital economy, says Boswell, is the time it takes to gather digital evidence and take it to court.

“Whether or not we are able to move fast enough is an issue — especially in false and misleading digital representations [and] mass marketing fraud that takes place online — because if you’re not moving quickly to stop that conduct, then by the time you get it to court, for example, the world may have moved on.”

Canada’s Competition Bureau isn’t alone in facing those challenges, he says.

“We are actively engaged at the [Organisation for Economic Co-operation and Development] and the International Competition Network with working on new tools to allow for agencies to co-operate more, to share information more across borders, to advance competition law enforcement around the world,” he says.

Boswell says he wants to ensure that the Competition Bureau’s staff has the training and tools it needs to navigate the digital economy and he wants to use some existing tools more aggressively.

“I would also like to see us continue to vigorously enforce the law within the envelope of resources we have to bring more matters to quicker resolutions, whether that is by using tools in our toolbox such as injunctions to stop harmful conduct earlier.”

Some of the practices that cross the line in the digital economy could overlap with the mandates of other government watchdogs, he says.

“The issue with data as a commodity, as something that is very valuable — personal data — is something that we are looking very hard at in terms of many aspects of our work . . .  [such as] false and misleading representations — for example, you’re told an app is free, but what you’re not told is that the app developer is going to be culling your personal data and selling it because personal data is worth a fair bit. So, where does that intersect with the privacy commissioner versus the bureau’s enforcement mandate?”

Another challenge Boswell anticipates but has not yet faced is companies using algorithms to collude and fix pricing.

“The law remains the same that you need an agreement between competitors to fix the price. So, the question that will arise is . . . how does that work where the algorithms are designed to facilitate collusion? What approach will competition agencies take if that comes to pass?”

If Boswell has his way, Canada’s competition watchdog could soon have a lot more bite.

“At the end of the five years . . . I would like us to be recognized as one of the leading competition law enforcement agencies in the world — particularly with respect to the enforcement of competition laws in the digital economy.”

 

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