Meet Mark Aylward, Senior Competition Law Officer at Competition Bureau Canada, with the second of a series of four episodes created to help us understand the laws governing and protecting retailers. If you want to learn more about the Competition Bureau and how it operates, tune into the first episode of the series to learn all about it. In this episode, Mark takes us through the law and perspectives around price-fixing, collusion and cartel behaviour investigations.
Welcome to The Voice of Retail. I'm your host Michael LeBlanc. This podcast is brought to you in conjunction with Retail Council of Canada.
Meet Mark Aylward, Senior Competition Law Officer at Competition Bureau Canada, with the second of a series of four episodes created to help us understand the laws governing and protecting retailers. If you want to learn more about the Competition Bureau and how it operates, tune into the first episode of the series to learn all about it.
In this episode, Mark takes us through the law and perspectives around price-fixing, collusion and cartel behaviour investigations.
Thanks for tuning into this special episode of The Voice of Retail. If you haven’t already, be sure and click subscribe on your favourite podcast platform so new episodes will land automatically twice a week, and check out my other retail industry media properties; the Remarkable Retail podcast, the Conversations with CommerceNext podcast, and the Food Professor podcast. Last but not least, if you are into BBQ, check out my all new YouTube barbecue show, Last Request Barbeque, with new episodes each and every week!
I’m your host Michael LeBlanc, President of M.E. LeBlanc & Company & Maven Media, and if you’re looking for more content, or want to chat follow me on LinkedIn, or visit my website meleblanc.co! Have a safe week everyone!
About Michael
Michael is the Founder & President of M.E. LeBlanc & Company Inc and a Senior Advisor to Retail Council of Canada as part of his advisory and consulting practice. He brings 25+ years of brand/retail/marketing & eCommerce leadership experience and has been on the front lines of retail industry change for his entire career. He has delivered keynotes, hosted fire-side discussions with C-level executives and participated on thought leadership panels worldwide. Michael was recently added to ReThink Retail’s prestigious Top 100 Global Retail Influencers for a second year in 2022.
Michael is also the producer and host of a network of leading podcasts, including Canada’s top retail industry podcast, The Voice of Retail, plus the Remarkable Retail with author Steve Dennis, Global E-Commerce Tech Talks and The Food Professor with Dr. Sylvain Charlebois. Most recently, Michael launched Conversations with CommerceNext, a podcast focussed on retail eCommerce, digital marketing and retail careers - all available on Apple, Spotify, Amazon Music and all major podcast platforms. Michael is also the producer and host of the “Last Request Barbeque” channel on YouTube where he cooks meals to die for and influencer riches.
Michael LeBlanc 00:05
Welcome to The Voice of Retail. I'm your host Michael LeBlanc. This podcast is brought to you in conjunction with the Retail Council of Canada.
Michael LeBlanc 00:09
Meet Mark Aylward, Senior Competition Law Officer at Competition Bureau Canada with the second of a series of four episodes created to help us understand the laws governing and protecting retailers. If you want to learn more about the Competition Bureau and how it operates, tune into the first episode of the series to learn all about it.
Michael LeBlanc 00:20
In this episode, Mark takes us through the law and perspectives around price fixing, collusion and cartel behavior investigations. Let's listen in now. Mark, welcome to The Voice of Retail podcast. How are you doing this afternoon?
Mark Aylward 00:40
Hi Michael, I'm doing great. Thanks for having me on.
Michael LeBlanc 00:42
Well, fantastic. Now for my listeners. This is another in a series of episodes brought to us by Competition Bureau Canada with the objective to inform and educate retailers and the retail industry on competition regulations, and laws. Now for those that missed the first episode in the series where Mark, one of your colleagues told us all about the Competition Bureau itself. I'll put that link in the show notes. Mark, you and I can just dive in to more about you and your specific area of practice. Tell us about yourself like how did you get to the Competition Bureau? What's your background? And then tell us about what you do for a living.
Mark Aylward 01:15
Yeah, sure. Well, I'm a Newfoundlander, first and foremost, I was born in a small town called Stephenville, but I was raised in St. John's, which as part of Newfoundland goes is the big city. I did my undergraduate degree in commerce at Memorial University in St. John's. And right after that, I didn't waste any time. I went straight to law school at the University of New Brunswick. And when I was there, during my third year, I actually did an elective, studying competition law. And it was my first exposure to the topic we're going to talk about today. But before I got really involved in that concept, I came back to St. John's and actually practiced there doing the kind of everything that a junior lawyer that I expected to do for a brief period of time.
Mark Aylward 01:36
And then in July 2016, I got a job with the Competition Bureau, which involved the move from St. John's to Ottawa, which I know Torontonians view Ottawa as a small boring city for but for a Newfoundlander, small town guy like me, this is the big city. I've been here since, since 2016. I'm really enjoying what I do, I really enjoy the people I work with. You know, I'll get into it a bit later. But my role as an investigator generally involves interviewing witnesses, executing search warrants, doing a lot of document review, as you can imagine, from those search warrants, and basically putting the puzzle pieces together to determine the facts with respect to allegations of cartel conduct.
Michael LeBlanc 2:00
Now, did you, did you (inaudible) of both businesses seeking a law degree? Did you always want to be a lawyer? Was the business degree a path towards business-oriented law? Or how did that involve? Tell me a little bit about that?
Mark Aylward 02:14
Yeah, so my dad was a, he had a, he had a commerce degree, and so there was no lawyers in the family. So, I just kind of did that business as a kind of a safe, safe path when you're 17 and going to university.
Michael LeBlanc 02:24
Sure.
Mark Aylward 02:25
And as I got further on in the business degree, I did a few work terms, I had some exposure to some business law courses. And really, it just felt like a natural fit. And I don't know at 22 years old, I wasn't ready to enter the workforce. So, I decided that more school was for the best.
Michael LeBlanc 02:35
Yeah.
Mark Aylward 02:36
So, then, you know, that, that law degree then opened up, a lot of possibilities, you know, obviously, you know, the law firm was the obvious path in the beginning. But then, you know, when I wanted to get involved in competition law, it was either you can work, you know, in competition law in some of the big firms in Toronto, some oth-, some other firms do it. But that's mostly based in Toronto, or you can work for the federal government, which is for, for my agency, which is the Competition Bureau. So,
Michael LeBlanc 03:49
Right.
Mark Aylward 03:50
I got the opportunity to do that. I, I decided to jump at it.
Michael LeBlanc 03:56
And now as in all the discussions that we're having today, I think you've got a, we call it a disclaimer. So, this discussion, talk about how you would frame this discussion with the listeners.
Mark Aylward 04:10
Yeah, I guess that's the lawyer in me being overly cautious. But I just wanted to say that I guess that, you know, my views here don't necessarily represent the views of the Commissioner of Competition, which is my ultimate boss. And it should not be construed as legal advice. I know it's a bit of a buzzkill. But I just couldn't help myself.
Michael LeBlanc 04:28
All right, well, that's fine. I think everybody's cool with that. All right. Now, let's talk about what your specific area of practice is, this, this idea of the cartel and, and that'll help us unwind what is a cartel and the competition sense of the word and, and then we can get further into the discussion.
Mark Aylward 04:46
Sure, and to be clear, my role is as an investigator and not as a lawyer, although many of our investigators are trained as lawyers are, what we do is, is that as investigators, we work with a lot of lawyers, including the Public Prosecution Service of Canada, who ultimately approved whether, approve or deny whether our charges will go ahead to a formal court proceeding.
Michael LeBlanc 05:10
All right let's talk about your specific work in this cartel and talk about it. What is it in the competition sense of the word?
Mark Aylward 05:18
Yeah, so a cartel, you know, it's a very scary word, but I think it's meant to be because ultimately, it's very bad for, for the public, for the economy, for the country, ultimately, so. So, a cartel and a competition stance is basically an agreement, any agreement between competitors to fix the price of a product or service, any agreement to allocate customers or markets, or an agreement to control the supply of a product. So, I know I threw a lot at you there. But I guess an example, if you want to get into that, is basically, you know, gasoline retailers, we get a lot of complaints about gasoline retailers. As far as price fixing is concerned, people see that, you know, you have two or three gas stations near each other with the same price. And, and they kind of assume that there must be collusion happening there. But it's not an offense to price independently, or, or monitor what's happening around you as, as a business.
Michael LeBlanc 06:03
Right.
Mark Aylward 06:04
It becomes an offense when you pick up the phone and actually make that agreement with your competing gas station in that example.
Michael LeBlanc 06:23
Right. So, it's, it's so, it's a big, and it's a very important difference between market assessments, and, you know, competitive analysis and this collusion that leads to a cartel, yeah. That's probably a pretty defining thread that runs through how you look at things. Yeah.
Mark Aylward 06:40
Absolutely. And so, I think, you know, maybe the, the and if there are any lawyers listening to this, they'll probably, you know, think of the term conscious parallelism, which is a mouthful.
Michael LeBlanc 06:48
Yeah.
Mark Aylward 06:49
So, so that, you know, that is when you know, you're, you're behaving in a way in concert with a competitor, but you've never had a meeting of the minds, you've never, you don't have an agreement underlying that. You're just you're, you're consciously, you know, aware of what they're doing in the market, you may be a less powerful competitor, and you feel like you need to follow the actions of your competitor. That's basically that's, that's all well and good as far as our Supreme Court of Canada is concerned. And as far as we're concerned, I mean, because ultimately, again, we need that agreement for there to be collusion. And that's, that's a key piece of our legislation.
Michael LeBlanc 07:27
Now, let's talk about, we're going to get deeper into this, because there's also this new idea. I don't know if it's a new idea. You talked about goods and services, collusion, but also about people. So, I'm kind of keen to get a little bit deeper into that. We talked about that off mic. But let's talk about penalties. Is this a civil penalty? Is this a criminal, talk about that a bit?
Mark Aylward 07:48
No, no, definitely not civil. I mean, so I think that's something that people do confuse. They're confused about our role, and they kind of view us as almost auditors or something when we come in for our search warrants. But no, it's a very, you know, very much a criminal offense, it's an indictable offense, that more than one serious offense in the Criminal Code, you know, short of, short of, the violent crimes. So, our legislation in the Competition Act, I said Criminal Code. So, I should, I should have said the Competition Act is actually where the offense lies, although we do use Criminal Code provisions to assist in seeking search warrants from time to time. So, really, this legislation is in the Competition Act, that's the main, main legislation we use. It provides for up to 14 years in prison for individuals to engage in the offense. And currently, there's a $25 million limit for the demo conspiracy provision. And that's the contract I was talking about there with the, you know, agreements being competitors to, for example, fixed prices.
Michael LeBlanc 08:46
Now, now how do you uncover these? So, talk about investigative work? And, and is there a second kind of part to that is, if you know, are there whistleblower programs or that give immunity but talking about the investigative work that goes into discovering or uncovering these alleged perpetrators?
Mark Aylward 09:06
Yeah, so we have what's called an Immunity program. And that, you know, I would say that that is our most important tool for uncovering cartels. Basically, you have to remember that these structural agreements are secret agreements, it's not like people are broadcasting these agreements. These are usually,
Michael LeBlanc 09:25
No social media. There's no social media on LinkedIn about it. Hey, I just did a great deal.
Mark Aylward 09:31
It does happen. I've seen it before where there's, you know,
Michael LeBlanc 09:37
Come on.
Mark Aylward 09:39
There's a, you know a public group where there's peop-, those businesses are agreeing, usually very unaware of how illegal that conduct is. I guess that's probably the reason why I'm here to kind of explain, explain. this.
Michael LeBlanc 09:47
Yeah, yeah.
Mark Aylward 09:49
So, you know, really, the Immunity program is really critical for us because, you know, because the agreement is usually secret. It's important for us to have people come forward that are actually involved in the agreement. So, what we do is we try to create a race to the door by offering full immunity from prosecution to the first person or business, sometimes both that come in and tell us about an offense. And also, you know that that involves significant cooperation from them as well in order to get that immunity. So, we try to kind of incentivize that co-operation. And then, (crossover talk),
Michael LeBlanc 10:24
I love that term, by the way, a race to the door.
Mark Aylward 10:28
Yeah, well, that's the, that's the idea. And I think, you know, it's been around for about 20, 20 plus years, I think the Americans had it first. But it's been a very effective program. And, you know, when, when people understand that they can avoid, avoid that, that prosecution, you know, I think it can be a very useful, useful tool for us to get people to cooperate. And then similar to that, we have what's called a Leniency program. So, basically, if you miss the race to the door to be first, you can still come in and co-operate and get a reduction in fines at sentencing.
Michael LeBlanc 10:45
Right.
Mark Aylward 10:46
And so that's, that's called (inaudible) program. And we, and that works running down the line. So, let's say you have a cartel involving six competitors, you got the first one that came in for immunity, and then you have two, three and four, one leniency, well, that's the first, the second person they're in line, we'll get the biggest reduction in fines, usually. And then it'll, it'll get, you know, less and less of a reduction as you, as you get later and later in the door.
Michael LeBlanc 11:29
Now, once you, once you begin the work, so you're you know, you as you said, you do a lot of reading, you know, certainly you don't need to be a lawyer, it sounds like to do your job, but it's kind of helpful, you know, that kind of appreciation and understanding of of documents and where they come from now, what as you dig into these cases, talk about the actual work you do to prove a cartel case?
Mark Aylward 11:53
Yeah, I should say that. Yeah, so we're not all legally trained. Some of us are, we have a lot of economists as well, that also work as investigators. And I think more and more, we're hiring more from the law enforcement backgrounds as well. Because ultimately, you know, that's what we are, we're investigators, we're dealing with criminal offenses. So, so we, you know, we had that, but that's usually the background is, is those three buckets, with some exceptions, for sure. As far as actually proving the case. So, you know, we, so we have this, these cooperation programs. And I neglected to mention the Whistleblower program, which is similar in nature, but it basically provides protection to an in-, individual who's aware of an offense. And it basically prevents them from being, being fired on the basis of them reporting that to us. And in addition, we provide confidentiality guarantees to those, those people so, (crossover talk) they won't be revealed.
Michael LeBlanc 12:50
And no, I almost hesitate to ask you this question. But are there any examples that you can, that come to mind, that you can give us just to flush out some examples, something that has happened in the past that you think would illustrate this, the cartel in the retail industry or any industry? Really?
Mark Aylward 13:08
Yeah. And so, I think, you know, because, you know, this is, this is done through the Retail Council of Canada, I think, you know, something involving retailers will be, would be useful, I think, the gasoline price fixing case. So, I did talk about gasoline price fixing in an example where you know in my example, it wasn't happening. Now, this is a case where it actually did happen. And it started way back in 04. And the last trial actually just finished taking place in 2019. So, these things can drag out, as you can imagine, as the various kinds of steps in the justice system had to have different timelines associated with them. But in that case, there were media reports of, of possible price fixing, and ultimately, our investigators were able to obtain wiretaps from the court to listen to phone calls between gas station operators. And they found that they were calling each other to let you know to agree on price changes in the gasoline industry. The case started off in Victoriaville, Quebec and then it turned out that the investigation revealed that the same kind of conduct was happening in Thetford Mines, Magog and Sherbrooke in Quebec.
Michael LeBlanc 14:21
Now you, you just said something interesting that there were media reports. Is that, is that something you guys keep an eye on is some investigative media that I guess it's one of many things that kind of raises your attention, but that was it's interesting. Is that how that all began?
Mark Aylward 14:35
Yeah, it is. And so basically, I think in the media report from back then again, it was before my time so I'm going based on, (crossover talk).
Michael LeBlanc 14:41
Sure, sure.
Mark Aylward 14:43
What others have told me, but I understand that there was another gasoline station operator that had, you know, basically alleged via the media that there was that the agreements were taking place. So, no hard evidence, but we had, we had somebody who was going to come to the media and said, but there's something going on here. And that's enough to start a case for us, we can get calls from the general public, we have an information center that takes complaints from the public. We have media reports. We also, you know, this is not so relevant for your audience, but we investigate agreements to rig bids. So, you know, agreements between, let's say, for example, two competing construction companies to decide who's going to win a public tender. So, we will often, often work with the provincial governments or municipal governments, or other arms of the federal government to, to see what's happening in those industries.
Michael LeBlanc 15:35
So, I've got a, I, I, I would say, a fairly diverse group of individuals listening to the podcast, as you would imagine. So, there's some people no doubt listening, that are very steeped in this very experience, you know, the larger retailers would have expertise, lawyers, whatever. Many retailers would not, but they'd be familiar with the ins and outs enough that they would know, day-to-day, but you know, where I wanted to take this, this has been a great discussion. Are there any changes, so no matter who you are listening to this podcast are there any changes to your area that people need to know about? Because I think you, you indicated there were, and I'd like to dig into that a little bit, just so you know, maybe, maybe you're an expert in it, maybe not. But there's, there's new rules, there's always new rules. And, you know, we don't (crossover talk) want anybody to get tripped up by those, right?
Mark Aylward 16:26
For sure. And I think there was a, you know, significant round of amendments to the Competition Act that happened, actually in June of this year. But the criminal provisions won't come into force until June of 2023. I believe the date is June 23, 2023. And the reason they do that is to give businesses and people a chance to sort of understand the new provisions, become aware of them. And then, you know, in larger businesses, you know, of course, there may be additional compliance training that gets rolled out. I think one of the key changes there, one of them already kind of went through, was the removal of the cap on fines for, for cartel conduct, but there's also the creation of a new offense. So, this is the so-called kind of wage fixing slash no poaching offense. And so what it does is it prohibits employers from agreeing with each other, to fix the wages that they're going to pay their employees. And it also, I'm sorry, that also applies to benefits. So, so, so, conditions of work. Now, it's a criminal offense for two employers to do that. And it's also one offense for them to, to agree not to solicit or poach one another's employees.
Michael LeBlanc 17:42
So, to be clear, it's not an offense, though, to do a market scan and find out what average wages are right, that falls into that first part of our conversation where there's a difference between colluding together picking up the phone and just doing a market scan, maybe by a third person, or maybe under an association like RCC, is that, am I getting that right?
Mark Aylward 18:02
That's exactly right. Yeah. So, so really, again, it's the same as the regular, you know, cartel provision, where you need that agreement, meeting of the minds between two employers. So, again, you can't, you just can't, have two employers get together and say, look, you don't hire my employees, I won't hire yours. You know, because, because you can see how that may be tempting to try and protect trade secrets. But ultimately as you know and my, my take on this is it's a significant harm to competition, and it really harms the workers, the workers ability to market their services and, and to get jobs. So, it really, really controls the job market, through again, this secret cartel arrangement. So, that's kind of the, that's why I believe they made it criminal. And again, that won't come into effect until next year. But you know, I think it's a good move.
Michael LeBlanc 18:56
Mid-year next year. Now that is different, because I think it's under, I think some of the maybe it's under provincial because I think Ontario passed this around non, non-compete agreements in your, your labor agreements, right? These, we're talking about something different here, just, just so we, most people would be more familiar with that, right. So, that's a different thing than we're talking about here. Right?
Mark Aylward 19:17
Exactly. Right now, we're talking about that kind of thing you think about at the same level of the supply chain. So, you're talking about two, two employers meeting together and never really involving the employees. This is the kind of stuff that's now becoming illegal in a criminal sense. The stuff you're talking about with Ontario changes. This is, these are clauses in individual employee contracts with their employer that often the employer may put in a or they may put in a clause that says you cannot compete with us if you leave. Those are the provisions that I believe the Ontario changes were, were aimed at. So, our legislation doesn't, doesn't deal with that. That's, that's something that provinces deal with. But whereas the wage fixing, no poaching stuff I'm talking about this is kind of this, this horizontal conduct agreements between employers. That's the stuff that has, will become criminalized as of June next year.
Michael LeBlanc 20:13
Okay, now, we've given a lot of information. It's been a great discussion, because hopefully, you know, we've, we've talked about it in such a way that would kind of either clarify or raise enough questions for people to want to learn more. Where can listeners go to learn more, you know, like many retailers might not have their own legal counsel or want to, you know, hire outside counsel, but are there resources on the government's website? Or can you, can they even call people like yourself when they have questions? How does that work?
Mark Aylward 20:42
Yeah, absolutely. So, the website, I think, is probably the best. First stop is, you know, there's all kinds of information about our, you know, Immunity, Leniency, Whistleblower programs. That's all, that's all online. Yeah, obviously, as far as you know, I did mention that we have this portal to submit complaints. And we also have a, a, a something on our website where you can request an outreach presentation, so you can request someone like myself to kind of come by and, and educate, you know, it could be your business, could be a business association, most of the time I do them with procurement authorities. So, that's going to kind of teach them how they can avoid becoming a victim of, of, of, of (inaudible) cartel.
Michael LeBlanc 21:24
Yeah, how to, how to recognize it, so to speak. Well, that's great. Now listen and this is a great resource too, so it was a great conversation Mark, I want to thank you for joining me on The Voice of Retail, and helping educate the community on this area of competition. And, and I want to thank you for your service. And then thanks for coming on to the podcast and chitin and chatting. And then we look forward to continuing talking to your colleagues in this series. And, and for now, I wish you a great rest of your day. And thanks again for coming on the podcast.
Mark Aylward 21:56
Well, thanks very much, Michael. I appreciate the opportunity.
Michael LeBlanc 21:59
Thanks for tuning into this special episode of The Voice of Retail. If you haven't already, be sure and click on subscribe on your favorite podcast platform so new episodes will land automatically twice a week. And check out my other retail industry media properties, the Remarkable Retail podcast Conversations with CommerceNext podcast and The Food Professor podcast with Dr. Sylvain Charlebois. Last but not least, if you're into barbecue, check out my all-new YouTube barbecue show Last Request Barbecue with new episodes each and every week. I'm your host, Michael LeBlanc, president of M.E. LeBlanc & Company and Maven Media. And if you're looking for more content or want to chat, follow me on LinkedIn or visit my website at meleblanc.co.
Have a safe week everyone.
SUMMARY KEYWORDS
cartel, competition, agreement, search warrants, people, media, collusion, business, happening, involving, investigators, offense, lawyer, retailers, podcast, provisions, retail industry, ultimately, talk, retail