Speaking Notes for Sheridan Scott, Commissioner of Competition

Competition Bureau

International Consumer Protection and Enforcement Network (ICPEN)

Paris, France

October 27, 2008

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Mr. Parent, Mr. Molnar, Ladies and Gentlemen,

I am delighted to be here today as part of the first conference of the Network under the auspices of the French presidency. This is my first time participating in a conference of the Network. I would like to thank the DGCCRF for welcoming us to Paris and for giving me the opportunity to explain my views on the importance of law enforcement co-operation networks and the opportunities for co-operation among networks.

I first want to share with you the Competition Bureau’s experience with partnerships fighting deceptive cross-border trade practices, including deceptive telemarketing practices and the distribution of misleading documentation.

I then intend to draw some parallels between the situation in North America where we work with our partners, and what is contained in the Regulation on Consumer Protection Cooperation, as adopted by the European Parliament and the Council of the European Union (EU) in 2004, which led to the creation of the CPC about which Messrs. Molnar and Parent have spoken.

In the last part of my address, I will convey the importance for ICPEN to be a catalyst in the fight against deceptive cross-border trade practices. I will also comment on some of the proposals put forward by the French presidency on the development of ties between the CPC and our Network.

Canadian experience with regional partnerships

In Canada, when we refer to our partnerships, we use the term regional because each partnership covers a province or region of the country comprising several provinces. For the uninitiated, the use of the term “regional” may be misleading because our American colleagues at the FTC and the United States Postal Inspection Service (USPIS) are full fledged members of our six regional partnerships. In addition, the Office of Fair Trading in the United Kingdom is also a member the Vancouver Strategic Alliance and the Toronto Strategic Partnership.

The reason Canadian authorities have invited foreign organizations to join Canadian regional partnerships is the very cross-border nature of the unfair trade practices we are trying to combat. Indeed, in recent years, we have often found that telemarketing operators or senders of misleading material are targeting consumers outside of our country. The citizens of English-speaking countries remain their preferred target. Even though we have noticed that an increasing number of European states are becoming targets of misleading mailings, the United States still appears to be the preferred target of Canadian telemarketers. So it goes without saying that it is in the interest of all countries affected by these scams to work together within partnerships or networks to eliminate this problem.

In short, the role of our regional partnerships is three-fold:

• 1) To co-ordinate law enforcement and legal action against offenders
  
  
• 2) To facilitate the sharing of information among participants
  
  
• 3) To support law enforcement measures taken by the participants

Although the agreements governing our partnerships are not binding on any participant, all have pledged to do their best to implement them. These agreements demonstrate a genuine desire on the part of participants to work together to fight deceptive cross-border trade practices and to commit the necessary resources within the means at their disposal.

Our regional law enforcement partnerships aim to create synergies among law enforcement agencies with different mandates and frequently dissimilar organizational cultures. This is particularly true at the international level. We also seek to take advantage of the complementary features of the various organizations involved. Indeed, all agencies do not have the same investigative powers. Moreover, depending on their mandate, some agencies have gradually acquired a specific expertise in various fields. The pooling or co-ordination of resources among international partnerships is a way for those of us working to protect consumers and promote competition to compensate for our lack of resources in a context where the amount of work requiring our involvement is constantly increasing.

To make efficient use of our scarce resources, we must plan and coordinate our actions in a strategic way within our legislative framework to avoid duplication or, even worse, a situation where the actions of one organization interfere with those of another.

The Competition Bureau is currently working towards establishing a coalition of all the agencies working within our six regional partnerships. We believe that such a coalition will help establish priorities and will enable improved and more strategic co-operation.

Our partnerships organizational or agency level arrangements. Their purpose is to facilitate co-operation, as informally as possible, in fighting deceptive cross-border trade practices. However, in certain situations, the Competition Bureau must rely on formal mechanisms provided in mutual legal assistance treaties between Canada and certain foreign states. These treaties were negotiated under the Mutual Legal Assistance in Criminal Matters Act.

The Competition Act was amended in 2003 to permit the conclusion of mutual assistance treaties in competition matters for cases in which the Mutual Legal Assistance in Criminal Matters Act does not apply. In short, it is now possible for the Government of Canada to negotiate competition-related treaties for mutual legal assistance in non-criminal matters, including deceptive trade practices, with foreign states or international organizations of states.

Comparison between the situation in North America and the European Regulation

I now propose to make a brief comparison between the situation in North America and what I know about the European Regulation. But have no fear! I don’t intend to make a comparative analysis of our partnerships and of the regulation establishing the CPC, but rather to identify a few common characteristics and challenges.

At the time of the adoption of the Regulation in 2004, Commissioner David Byrne made the following statement: “Rogue traders have been put on notice: they will soon have no hiding places in the EU.” Everyone will agree that he was referring very diplomatically to fraudsters who seek to take advantage of borders and legislative or institutional barriers, which complicate co-operation among law enforcement agencies

The sharing of information is undoubtedly one of the great challenges we all face in cases of cross-border deceptive trade practices. One of the cornerstones of our regional partnerships is information sharing.

In Canada, we have a national data bank, the Canadian Anti-Fraud Call Centre, better known as “PhoneBusters,” which plays a key role in the collection and analysis of information on deceptive telemarketing and other scams. In addition, Canadian agencies benefit enormously from the information contained in the FTC’s Consumer Sentinel database. In recent years, the Competition Bureau has negotiated information sharing agreements with certain members of the Network.

It goes without saying that it is important to protect personal and confidential information, but one must never forget that effective law enforcement requires a certain ability to communicate such information.

Greater information sharing among consumer protection agencies allows for better co-ordination of and co-operation in law enforcement activity to target deceptive cross-border trade practices. In this area, I have observed that the European Regulation goes further than our regional law enforcement partnerships. Indeed, my understanding of the Regulation is that it allows one competent national authority to ask another competent national authority to take action to stop or prohibit an alleged offence. Our partnerships do not go this far; they are based on a mutual commitment of the partners to do their best.

Regardless of the model adopted, either that chosen by our regional partnerships or that of the European Regulation, the objective remains the same, i.e. to provide better protection for consumers wherever they live by reducing geographic, legislative and institutional barriers that have traditionally favoured fraudsters. I feel that our Network has a crucial role to play in meeting this challenge. I will, therefore, continue by presenting a few ways in which our Network can help us rise to this challenge.

The ICPEN, a catalyst in combating deceptive cross-border practices

During the Chilean presidency, we agreed to refocus Network activities on law enforcement co-operation. I am delighted with this development. Indeed, the Competition Bureau sees the ICPEN as a catalyst in combating deceptive cross-border trade practices.

I am happy to note that the working groups for promoting co-ordinated law enforcement action in areas such as air transportation issues, environmental claims and misleading or fraudulent advertising practices have begun their work. I was particularly encouraged to learn that they are involved in developing joint law enforcement projects. Canada is also enthusiastic about the proposed work that the working group on lotteries and sweepstakes, chaired by France, is slated to undertake. I can assure you that we will be actively involved in this working group.

Moreover, I should mention the work carried out by the working group on the development of best practices in enforcement strategies. The outcome of this group’s work should be a source of inspiration to us all, and even to non-members, as we seek to develop better enforcement strategies for the benefit of all consumers around the world.

We feel that this approach, using working groups with common priorities, is a promising path for our Network to take. This approach has yielded positive results for the International Competition Network (ICN), a network to which a number of organizations present here today belong. I support this approach and invite all members of the Network to join a working group in order to contribute to reaching the Network’s objectives, including the goal of combating deceptive cross-border trade practices.

By identifying certain priorities, as was done at Puerto Varas, and through the commitment of the members to co-operate in tackling the problems identified, our Network will become a catalyst in combating deceptive cross-border trade practices. I feel that by acting together as a Network, we can achieve our goals if all contribute.

Allow me to quote an excerpt from an article that Tim Muris presented at the Fordham Conference in 2002 when he was Chairman of the FTC:

• “Experience with inter-jurisdictional law enforcement cooperation, both nationally and internationally, shows that successful cooperation and convergence begin by focusing on core areas of agreement. Consensus on substantive priorities provides a basis for testing enforcement techniques and building trust across jurisdictions. Enforcement concerning the core areas becomes a prototype for broader cooperation over time... We can begin by envisioning fraud as consumer protection's equivalent of supplier cartels in competition policy. We should develop a common view of what constitutes fraud...Despite some issues of classification, I am confident that consumer protection agencies worldwide would agree that certain types of seller deceit warrant categorical condemnation.” (p. 22)

Just a little “food for thought.”

Proposals of the French presidency

Before I conclude, I will briefly share with you my views on certain proposals made by the French presidency on establishing links with the CPC.

I feel that the French proposal to explore the possibility of establishing links between our Network and the CPC deserves our attention. Canada and, I would imagine, certain other non-European members of the Network, have limited knowledge of the CPC and its activities. I think that the creation of a joint ICPEN-CPC working group could be beneficial in acquiring more knowledge about the CPC network and, eventually, could help identify synergies in relation to certain specific activities. I’m also pleased to see that today’s schedule includes presentations by various regional networks of consumer protection agencies.

At a time when business has become globalized, the same problems are often encountered in many countries and areas of the world, and our response must therefore be a unified and global one.

Thank you.