On March 22, 2012 the Competition Bureau (Bureau) issued its
revised draft Abuse of Dominance Guidelines (the Revised
Guidelines) for comments. The Revised Guidelines supersede a
previous draft issued for consultation in early 2009, and propose
to replace a number of Bureau publications on abuse of dominance
which currently provide guidance to specific business sectors. In
contrast to these previous publications, the Revised Guidelines are
more concise and less informative, therefore creating uncertainty
for businesses operating in Canada.
In addition to taking a broad and less transparent approach to
the application of the abuse of dominance provisions of the
Competion Act (Act), the Revised Guidelines raise certain
issues and differ significantly in tone and substance from the 2009
draft. For instance, the Revised Guidelines still state that a
market share of less than 35% will generally not prompt further
examination by the Bureau, and note that a market share between 35%
and 50% will not give rise to a "presumption of
dominance." However the Revised Guidelines now provide that in
addition to an individual firm's market share, the Bureau will
examine the distribution of the remaining market shares among
competitors, given that the disparity between a firm's market
shares and those of its competitors can increase a firm's
ability to exercise market power. Accordingly, the Bureau will also
consider the durability of a firm's market share and assess
whether shares have fluctuated significantly among competitors over
time. While additional information on the Bureau's general
approach to market shares of less than 50% is welcomed, the Revised
Guidelines provide very limited guidance on how the Bureau will
assess allegations of abuse of dominance, besides stating that it
will conduct its investigations on a case-by-case basis.
With respect to joint dominance, the Revised Guidelines state
that where a group of firms is alleged to be jointly dominant, a
combined market share of 65% or more will generally prompt further
examination by the Bureau. The Revised Guidelines also note that
the Bureau will determine whether firms are jointly dominant by
identifying the firms in the market that would need to jointly
control a relevant product market such that they hold market power
together. This statement constitutes a significant departure from
the Bureau's position described in the previous draft, which
stated that, in joint dominance cases, each firm needed to engage
in potentially anti-competitive behaviour and, together, appear to
hold market power.
The Revised Guidelines also include an updated discussion on
anti-competitive acts and note that in Canada Pipe, the
Federal Court of Appeal (FCA) stated that an
anti–competitive act is defined in relation to its
purpose (i.e., an intended negative effect on a competitor), but
that paragraph 78 (1)(f) of the Act, which deals with buying up of
products to prevent the erosion of existing price levels, provides
for one exception to this requirement, as it does not contain an
explicit reference to a purpose directed at a competitor. The
Revised Guidelines then state that while many types of
anti-competitive conduct may be intended to harm competitors, the
Bureau considers that certain acts not specifically
directed at competitors could still be considered to have an
anti-competitive purpose. This statement suggests that the Bureau
could attempt to extend the FCA's interpretation with respect
to paragraph 78 (1)(f) to other anti-competitive acts.
Unfortunately, and in contrast to the previous draft, the
Revised Guidelines do not provide details with respect to the
Bureau's approach to certain specific anti-competitive acts,
including raising rivals' costs, exclusive dealing, tying,
bundling, bundled rebates and denial of access to a facility or
service; therefore providing less guidance to businesses on the
Bureau's approach to the enforcement of the abuse of dominance
provisions of the Act.
Finally, in 2009, the abuse of dominance provisions were amended
to provide for administrative monetary penalties (AMP) of up to $15
million. The Revised Guidelines provide very limited details with
respect to the Bureau's approach to remedies, and no insight as
to the circumstances in which the Bureau will seek an AMP.
Further consultation on the Revised Guidelines may resolve some
of the issues described above. As such, interested parties may
provide comments to the Bureau on the Revised Guidelines until May
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
The Commissioner of Competition addressed innovation, enforcement and policy initiatives at the Competition Bureau in his keynote speech, "Strengthening Competition: Innovation, Collaboration and Transparency."
Used car listing website operator CarGurus Inc.'s attempt to force rival Trader Corporation to supply it with vehicle listing data has encountered a dead end as the Competition Tribunal denied it leave to commence a private application under several provisions of the Competition Act.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).