The Unsure Entrepreneur

The Unsure Entrepreneur Podcast

Maijd Charania
Director of Compliance & Outreach, Competition Bureau Canada

SUMMARY KEYWORDS
Competition Act, small businesses, anti-competitive conduct, Google investigation, price fixing, bid rigging, deceptive marketing, Competition Bureau, enforcement, compliance, market concentration, competitive intensity, business support, legal resources, mergers.

SPEAKERS
Roger Pierce, Majid Charania

Majid Charania 00:00
Our work is meant to foster a situation where small and medium sized businesses have an equitable opportunity to compete, to participate in the economy. And in fact, that's almost word for word, what it says in the purpose of the Competition Act of the law that we enforce so it is a guiding principle. It's something we keep in mind throughout our work.

Intro 00:42
You're listening to The Unsure Entrepreneur POodcast with Roger Pierce, whether you're scribbling business ideas on a napkin or wrestling with the should I shouldn't I question. Get ready to explore the realities, the risks and the rewards of entrepreneurship as we share the stories, scars and successes of small business owners.

Roger Pierce 00:42
Hello and welcome to another episode of The Unsure Entrepreneur Podcast. I'm Roger Pierce. Thanks for joining today. Excited to have our first guest. We're going to learn a lot about competition in Canada and small business and how important it is to have an equal playing field for entrepreneurs in Canada. Majid Charania has extensive experience in competition, law and policy, compliance and sales and marketing across the private and public sectors in Canada and internationally. Currently serving as director of compliance at the Competition Bureau of Canada, he focuses on fostering adherence to the Competition Act, evaluating corporate compliance programs and developing outreach initiatives for the business and legal communities. Known for his collaborative approach, Majid has been featured on the Counterfactual Podcast where he shared insights on cultivating a culture of compliance. Welcome, sir.

Majid Charania 01:36
Thanks. It's great to be here.

Roger Pierce 01:38
So let me just give a little bit of context for those who are new to the podcast, small businesses are the lifeblood, the backbone of Canada's economy, making up 98% of all the employer businesses and employing close to half of the private sector workforce. However, navigating the competitive landscape can be challenging for small businesses, because we're small especially when larger players engage in practices that hinder fair competition. We're going to talk about that, you know, small businesses, where we're up against some really big contenders out there. So it can be a struggle. A recent example, I found this on the website of the Competition Bureau involves them taking legal action against Google, big company we're all familiar with, for alleged anti-competitive conduct in online advertising. The bureau claims that Google has abused its dominant position by engaging in conduct that locks market participants into using its own tech tools, which means they're excluding some competitors, maybe some small ones, and distorting the competitive process. These instances highlight the importance of vigilant enforcement of competition laws to maintain fair market practices, and all we want is small business owners to have an equal shot, right? So can you explain, for starters, what the Competition Bureau does, and in particular, how it helps small business?

Majid Charania 02:55
Yeah, I'm happy to do that. The Competition Bureau is an independent federal law enforcement agency. Our mandate is really to protect and promote competition in Canada. And so those two items reflect the law that we administer and enforce, the Competition Act. And the protection side of that mandate really goes to our law enforcement work. The promotion side of that mandate goes to our voice as an expert for competition within government in Canada, and I'm happy to talk about both of those things. So you mentioned, for example, our ongoing Google investigation. That's an example of our enforcement work. We're an investigative agency, so we're out there to gather the facts about situations where companies may have acted offside the law. If your listeners have seen the show, law and order, you can kind of think of us as the first half hour of the show. We go out there and do the investigative fact gathering work to determine what's gone on. Our ultimate goal is to have an evidence driven approach to our enforcement and to take principal action where we think the law might have been broken. Big job. Yeah, it certainly can be. Law applies to all parts of the economy and to all actors, all businesses, big or small. So it can be a big job. You're part of the Government of Canada, obviously. Can you give you some context, like, how big is the department? How many people are there? And helping you out? Yeah, so the Competition Bureau, as you said, is part of the federal government. Number keeps on shifting, but probably over 500 people. Our headquarters is in the Ottawa area, as you can imagine, as a federal agency, but we do have a presence across the country. We've got regional offices in Montreal, Toronto, where I'm based with my team, and also in Vancouver. The law applies to all businesses, no matter how big or how small, or where they are in Canada, and so our work spans the country.

Roger Pierce 04:57
So as I understand it, if I'm a small business owner. I've got a problem or I want to talk to someone there. It's free. I can reach out and get in touch, right?

Majid Charania 05:05
That’s exactly right. We have real people who pick up the phone and read information or reports or complaints that we get from the public, and it is certainly free to get in touch with us.

Roger Pierce 05:16
Couple of the topics I'm fascinated by is price fixing, market allocation. I know you can't get into some specifics of cases you might be working on, but these are real issues that a lot of entrepreneurs worry about. Like, you know, what if I put a billion on something and I feeling being ganged up on by some larger players who are maybe squeezing me into the market? Happens a lot in the construction business, not to center them out, but smaller operators want to get in, and there's some incumbent players there. Can you talk a little bit about what a small guy can do?

Majid Charania 05:43
Yeah, so maybe I can start by giving some context. You talked about price fixing, you talked about putting in bids. There's an element of the law that relates to what we call Bid rigging, essentially a form of collusion between businesses as it relates to bidding on public contracts, but also private tenders and RFPs, those examples price fixing, Bid rigging, those are examples of criminal offenses under the Competition Act. So as you can imagine, the penalties can be quite severe for that type of conduct. It includes severe monetary penalties could go up to and including jail time or both. Consequences can be severe, and these are areas of the law that apply, as I said, to all businesses. So all businesses really should know about them, at least at a high enough level to know what not to do and how to put in place practical compliance measures within their business to stay on side the law you asked about how businesses can go about doing something if they feel like they're impacted by these behaviors, if they feel like they're squeezed out of a market. As a law enforcement agency, we do accept complaints or reports that are filed with us, we get 1000s of complaints every year, and that is certainly a way to help us understand what's going on in the market and to take action as appropriate. I should point out our role as a law enforcement agency isn't necessarily to protect individual businesses or get involved in an individual businesses commercial dispute. But what we do do, our role in our guiding principle, is to protect the competitive process and markets, and when that competitive process isn't working because a company is engaging in illegal conduct or putting up barriers, that's the kind of thing that we want to hear about, so that we can take action.

Roger Pierce 07:43
Because at the end of the day, you're trying to foster innovation and fairness and a competitive marketplace, and when that happens, we all win.

Majid Charania 07:51
Exactly one of our guiding principles, and especially as it relates to small and medium sized businesses, is that our work is meant to foster a situation where small and medium sized businesses have an equitable opportunity to compete, to participate in the economy. And in fact, that's almost word for word, what it says in the purpose of the Competition Act of the law that we enforce. So it is a guiding principle. It's something we keep in mind throughout our work.

Roger Pierce 08:21
What I love, and I encourage people to go check out the website. You actually post some real cases that are happening that are very close to lives of many Canadians and entrepreneurs, for example, on the website or LinkedIn, you recently talked about Rogers Telco and how they're being sued by you guys, I think, for making misleading claims about their Infinite Wireless Plans. This is part of the job, isn't it?

Majid Charania 08:43
No, absolutely, and that's an example of a case that relates to our deceptive marketing enforcement. So part of our enforcement work under the Competition Act, we can look at marketing practices that might be false or misleading. Our role in that area is to really to ensure truth in advertising, we want to make sure that consumers and businesses are well informed. They have accurate information on which to make decisions about what products or services to buy. And if you think about it, there is a competition angle to that, in that you know if consumers are being misled or they don't have accurate information about what they're looking to buy that can favor a competitor who's essentially playing dirty, who is not competing on the merits of their products or their services or their ideas, but instead is trying to hoodwink the public. So that's certainly part of our work. That case, in relation to Rogers and their infinite plans, is ongoing. At this point, it is with the Competition Tribunal, and we'll see how that plays out.

Roger Pierce 09:45
And to be honest, entrepreneurs, I've been guilty…We're in sales mode. We can get carried away sometimes and maybe make claims about our products or services that aren't 100% and we got to be careful about that, don't we? I mean, we've got to watch what we say and what we do because there are consequences.

Majid Charania 10:02
That's exactly right, and that's another area of the law where all businesses, no matter how big or small, should be aware of what to do and what not to do. You hear about certain cases in the news. You mentioned Rogers, you mentioned Google at the outset, but in fact, we have a lot of investigations that relate to small and medium sized businesses. There might be situations where they just didn't know something was offside or in a gray zone. But as we all know, ignorance of the law is not a defense, and it doesn't stop business from getting into hot water and then having to spend money and being distracted by an investigation, they might have to go and hire lawyers or do other things that distracts them from what they want to do, which is go out and win and put out a good product or service. Knowledge is really important, and we have a lot of resources to help business owners understand what's the gray zone, what's on side, what the law says, so that at least they can make those choices as you were saying, you know about what they're going to say, how they're going to market their products, with the feeling of being empowered, knowing that they're staying on the right side, or knowing where the lines are. So we've got a lot of those resources, and they're in plain language, and as you know, a lot of them are actually designed for small and medium sized businesses. We've got a number of resources on our website, everything from, you know, short videos that explain the law in simple language and explain how businesses can take concrete, simple, cost, effective compliance measures to stay on the right side and protect their business all the way to more technical guidance that really dives into the detail of how the bureau interprets the law that we enforce. So we've got a range everything from the basics to the details, and it's all out there, and it's free of charge. We've got stuff really, that's designed to meet people where they are. And in fact, this podcast, I think, could be a resource for people, at least, to get the basics, at least to have maybe a light bulb moment say, Oh, I might need to read a little bit more about X or Y topic.

Roger Pierce 12:14
You know, on that post I read on LinkedIn, you said, Roger, you said, Canadians need accurate and truthful information when purchasing goods and services. And I love the response of one of your followers on there, who said, “Not all heroes wear capes.”

Majid Charania 12:30
That is a good one. We do sometimes in our work, go out there and there are windbreakers that we have. I would personally say they're maybe not as cool as the FBI windbreakers, but we've got some jackets.

Roger Pierce 12:41
So could you give you some examples for a small business operator, what type of anti competitive practices we should be aware of, like things to do and not to do?

Majid Charania 12:49
I like to think of what small business owners need to know about in two buckets. So there's the first one, which is what we've talked about, a little bit areas of the law that small business owners need to know about because they have positive compliance obligations, they might be offside, depending on what they do. That generally covers things like price fixing and Bid rigging, deceptive marketing. We also enforce labeling statutes. People don't talk about it necessarily as much. But there are other statutes, other laws that we enforce, that apply to all businesses. So there's kind of that bucket areas where people need to know the rules so that they don't break the rules. I would say there's another bucket, and it's a bit broader in relation to the law that we enforce. It's a bucket of knowing the law because it can actually help you understand what your options are, what your rights are, if you feel like you might be impacted. So a good example of an area of the law where that might be the case for a smaller business is the area that we sort of call monopolistic practices, firms that have some market power or are dominant in a particular sector, doing things that abuse that position in the in the market. There are times when smaller businesses can be on the receiving end of that. They might face a barrier to entry. They might, because of that conduct, not be able to enter a market or scale in it, or have a fair shot at competing. And so those are situations where we would want to hear from that business, because we're empowered to investigate. Recently, the law changed. And there are situations where a business like that even has the option that they might want to take advantage of, to go take the company that might be abusing their power to court directly that's available in the competition act now, all that to say businesses should know their options, and by knowing the law that empowers them, it empowers them to comply with it, but also to know what to do if they're feeling the pinch or feeling impacted.

Roger Pierce 14:56
So what I'm taking away from that is, if I'm a small business owner, I'm suspicious. Just about something I'm feeling squeezed. Call you, reach out to you, get in touch. Yeah, absolutely.

Majid Charania 15:04
And that can take a number of forms. We've talked a lot about enforcement, but the other side of our mandate, the promotion and advocacy side, that's also an area where we benefit from hearing from a diverse range of views, and that includes small and medium sized businesses. You know, if you think about government regulation, there are times when that can impact competition. There are times when that can make it harder for a small business to start or grow in a market. And if they're feeling that type of pinch, we also want to hear about it, because we can advocate at all levels of government, all the way from municipal to federal and provincial in between, on issues where rules and regulations might impact competition, we really want to hear about all of it, pain points on all levels. It'll help us do our job better, and ultimately, that helps us help the business community.

Roger Pierce 15:58
And obviously both official languages are available. [Certainly]. One question I had for you here. You know, misleading advertising packaging. I feel these are areas where small business owners might slip up and make some of these false claims or maybe put something on the late you know, the labeling laws are pretty strict, but what are some some guidelines you can you can suggest in that area.

Majid Charania 16:20
First of all, we have a lot of resources related to deceptive marketing and labeling that are designed for small and medium sized businesses. So in terms of the education side of that, one resource I'll mention for sure is our deceptive marketing practices digest. I think there are seven volumes of it now, and that's meant to shed a light on all different types of marketing practices that might enter into a gray zone or be offside. That's an education piece that can help the other thing that I'll mention is that we have a number of tools at our disposal when it comes to handling investigations and cases where we might find a problem, not all of our cases end up in court, or have to end up in court. So we have a case by case approach when we determine based on a number of factors, you know, how are we going to handle a situation where we think there might have been misconduct? There are cases where, you know, we do go to court, but there are also cases where, you know, we end up achieving a settlement with the companies that were involved in the misconduct or the individuals that were involved in the misconduct to satisfy the need to make sure an illegal practice isn't happening, and also take into account mitigating factors or other factors in a case. So we've got a range of enforcement tools and resolutions at our disposal, and it's a case by case thing. So we look at the facts seriously, and we consider what the circumstances are in each situation when we're when we're acting.

Roger Pierce 17:59
Is your response kind of measured to the infraction? I mean, if I screw up and make a false or misleading claim on a social media post or a newspaper ad or something, you don't send the troops to bang down my door, you probably reach out in some way, for starters, and say, No.

Majid Charania 18:16
I can't talk about a specific action that would happen in all cases. Like I said, you know, we really do take a case by case approach, but we'll consider factors like that in, you know, how we approach a situation before, during and in the resolution of a particular matter.

Roger Pierce 18:35
In terms of false and misleading advertising? I see a lot of ads out there. I'm a marketing guy. I've got a marketing agency, and you got to be careful. Maybe you can tell me if this is allowed or not allowed. I think it's not, but I can't say: “Guaranteed, if you work with me, I'll increase your business three times” these kinds of claims. We've got to be careful and considerate.

Majid Charania 18:54
I can't give you a hard and fast answer about what's legal and illegal in part because of our role, like we're the investigative agency, but ultimately, the final decider is a judge, you know, in terms of what's definitively legal or illegal, but you know, in situations we under the deceptive marketing provisions, would look at number of factors, you know, what's the general impression of what you're saying, does it relate to an important part of your message that could influence consumer behavior? We'd look at all of those things. If these types of claims are made in relation to the performance of a product like a good we'd have to look also, you know, at whether there was adequate and proper testing that was done before the claims were made before something is guaranteed, for example, to do a certain thing. As you can appreciate, there's a lot of nuance to this. This is why we have educational resources around it. If someone's got this nagging question in their head about is what I'm doing in a gray zone? Is it offside? Clearly, like you know, what should I be aware of in terms of the risk. That's when they should really go to our resources and read up more about it.

Roger Pierce 20:04
I mean, in answering my own question, I know it's kind of unfair to ask, but we have to be aware of these things don't make outrageous just claims. If I was to rewrite that ad, I would say, you know, “Here's an example of a former client who did increase their revenue by three times from working with us,” right? That kind of thing is probably a little more palpable than making some outrageous claim. It's easy to get caught up in the moment. As a small business owner, you're marketing, you're selling, you're trying to pay your rent, you're putting stuff on social media many times a day. I think it's important for the message here to come through that take a deep breath, pause, review what you're putting out there. Maybe even have legal eyes look at it first, if that's required, because we can't get ourselves into hot water over misleading claims because we're trying to make money, you know, and I think it's important to know what the competition laws are.

Majid Charania 20:48
That's exactly right. Knowledge is power, even having that instinct to think, ‘Is what I'm saying truthful? How would it be perceived?’ That's a good instinct to have.

Roger Pierce 20:59
I just read online, something interesting, maybe you can comment on over the past two decades, Canada's competitive intensity has decreased with increased market concentration, so bigger players, perhaps, and higher profits for top firms, indicating a decline in competitive pressures. Is that your take on things too?

Majid Charania 21:16
What you're referring to is a study that we did came out, I think fall of 2023 but we look back at essentially, the state of competition in Canada's economy for a 20 year period between 2000 and 2020 and you're bang on. Essentially, what we found is that competitive intensity has decreased. We looked at a number of factors to come to that conclusion, and it was a pretty broad based conclusion that we reached. So, you know, as an example, we looked at things like how stable the ranking of top players in a particular market was over time. We found that that, which is called rank stability, increased over time. So in other words, large businesses that are at the top of a particular market, they tended to stay there and weren't, you know, necessarily challenged that much by smaller firms or new entrants. That was the case in pretty much all of the sectors we looked at. And that's a troubling finding in terms of Canada's economy, because competitive intensity is a cornerstone of things like economic growth and productivity and innovation, and without that intensity, the players that are at the top without feeling the pressure, have less of an incentive to continue To innovate or to come up with better products or services for consumers, or to feel like they need to compete on price and lower prices for consumers. So that lack of intensity, that stability is troubling, and it's something that will inform our work as we go forward. It'll inform how, for example, we advocate within government to take into account competition when making rules, policies, legislation, etc.

Roger Pierce 23:07
So what you're saying, in essence, is competition is a good thing.

Majid Charania 23:12
That's exactly right.

Roger Pierce 23:14
And sometimes, as a small business person, you know, we forget that it's a good thing. I got a stat from your website too. Here it says businesses facing competition are more likely to innovate between 2020 and 2022 over 76% of businesses with known competitors introduced innovations, compared to about 39% of those without competitors.

Majid Charania 23:35
That's a principle that drives our work, the idea that competition and competitive intensity is what's going to yield the positive results of a market economy for Canadians. It's a dynamic where, if it's strong, it means that a smaller business is trying to get into a market may have a better opportunity, a fairer opportunity, to break in, as opposed to a market that's locked up by barriers that are put up by a big business, or by a number of big businesses, or by stifling rules and regulations that create such a high burden for a new entrant that you know, they might say this isn't worth it. Or if I do go down this path, I'm starting from a disadvantage. All those situations are examples of times when there's lack of competitive intensity or the incentive to compete, and that just makes for a less level playing field. For smaller businesses.

Roger Pierce 24:31
There's so many disadvantages working against small business. We've got very little hours in the day. We've got very little funds. We've got stresses from home. We've got multitasking. You know, you've worked, you work with entrepreneurs, you've got a business background. Anything we can get, any advantage we can get out there is certainly welcome.

Majid Charania 24:47
Maybe one thing I'll say about that: we know that business owners are busy, and small business owners have a bunch of stuff on their plate. Their time is really valuable to them. I've mentioned before. The fact that people can get in touch with us and file information, file complaints. We also do a lot of outreach and engagement with business support organizations like Chambers of Commerce or trade associations. If folks are too busy to file a complaint with us, but they've got an easy line into their local Chamber of Commerce. I would encourage them to put their pain points, competition issues on their radar, because they can be well positioned to advocate on behalf of the business community. They might, at their level of region or an industry, be able to look at trends and really say, Oh, this is this is starting to be a problem. They could be well positioned to put issues on our radar as well.

Roger Pierce 25:49
Well as we get into the wrap, anything else you want to mention that we haven't talked about tips or points you want to share before we get into the wrap?

Majid Charania 25:50
I think the only other thing I'll mention is that kind of further to the point about there being a lot of pressures on people's time and entrepreneurs being busy. This is a particularly important time to get to know what competition law is all about, to protect your business, to know you know what your rights and obligations are, because there's been a lot of change when it comes to competition law over the past few years. You know, if someone did know about the bureau or know about competition law, there's a chance that what they were relying on in terms of their past knowledge that might have changed. So if they, you know, we're thinking about the risks of a particular marketing campaign, or if they were thinking about selling off their business, and they're like, Oh yeah, I've heard of the Bureau. I know that they kind of do this or that, and this is what the law is. All about penalties across a number of areas. If the law have increased, what we have to do to prove a case in certain areas has changed. Just knowing that the law has evolved means that folks should take a look at the most recent information that's out there, and maybe one last point, we didn't talk too much about the Bureau's role in looking at mergers, but we have a mandate to review mergers in Canada. But that's big or small. It's not just the big businesses looking to merge in billion dollar deals. We can look at deals of any size, and depending on the situation, you know a small business owner looking to sell off their business, they should know that that exists, and they should make sure that they're aware so that they can make a better informed decision and know if there are risks around their transaction, and not kind of go in blind saying, ‘Yep, this is a done deal. No issue here.’ So a bunch of reasons why it's important to know the law. I'm not saying people should go out and spend hours and days and weeks becoming competition lawyers and experts, but at least the basics, and we've got the resources for that.

Roger Pierce 27:49
Good tips, stay current, stay informed. And it's not just the big players. It also affects us small and medium sized businesses. We have to make sure we're aware of what we can and can't do. I love it. Well, thank you so much, Majid, I really appreciate your time here today. You've shared a lot of great information and insights into the Competition Bureau and how you can help, and I really appreciate it.

Majid Charania 28:10
Like I said, I'm happy to be here, and I really hope this is helpful for your audience.

Roger Pierce 28:15
Certainly is. Now, if you want to get in touch, someone wants to get in touch with you or your colleagues, how do they do it?

Majid Charania 28:21
So you mentioned the websites on our website, we've got a form that people can fill out to get in touch with us, whether it's to share information or file a complaint or request information. They can also call in to us. We've got a line like I said, there are humans on the other end of that line, so they can pick up the phone for folks who really want to write us a letter, we do take snail mail. So there are a number of ways you can get in touch with us. In terms of education, our resources are on our website. We've got, I think, a really good resource for small businesses called the compliance hub. It's right there on our home page, and that leads them to an area of the site that has plain language information about all the different parts of the law the videos that I mentioned, they're in a boot camp series. And in fact, if people are putting in place, you know, their compliance measures in their business, they can even use our boot camp series as a form of basic training for themselves and for their people. There's also guidance in there about how to put in place those compliance measures. So folks say, okay, you know, I see the risks around marketing practices or how I interact with my competitors. We have guidance on what measures to put in place to protect the business. So we've got all of that there, again, in plain language, freely accessible. So I would say, really go to the Compliance Hub on our website. It's https://competition-bureau.canada.ca/en

Roger Pierce 29:52
Got it. I'm going to put that in the show notes as well. So it's easy for folks to reach out and get in touch. Thank you so much, Majid. I really, really appreciate. Appreciate it and glad to have you on and to our listeners. Thank you for being here and be sure to tune in next time for more insights from The Unsure Entrepreneur.

Outro 30:11
That's it for this episode of The Unsure Entrepreneur Podcast. Thanks for listening. Be sure to subscribe so you don't miss other candid conversations with small business owners, and be sure to check us out at unsure entrepreneur.com.