In brief reasons issued on February 3, 2014, the Federal Court
of Appeal (FCA) concluded that the Competition Tribunal erred in
its interpretation of sections 78 and 79 of the Competition
Act (the abuse of dominance provisions) and broadened the
scope of application of those provisions to capture persons that do
not compete directly in the market and conduct that is not directed
at one's own competitor. The FCA referred the Commissioner of
Competition's application against the Toronto Real Estate Board
(Board) back to the Tribunal for reconsideration on the merits.
In finding that section 79(1)(a), the "substantial control
of a market" requirement, could apply to the Board, the FCA
agreed with the Commissioner that a person that is not a competitor
can still control a market by, for example, controlling a
significant input to competitors in the market or by making rules
that effectively control the business conduct of those
The FCA also held that a person could engage in a "practice
of anti-competitive acts," a required element under section
79(1)(b), even if the alleged conduct was not directed at the
person's own competitor. To arrive at that conclusion, the FCA
noted that the enumerated list of anti-competitive acts at section
78 is not exhaustive. More specifically, the FCA pointed to section
79(1)(f), which references "buying up of products to prevent
the erosion of existing price levels" as an example of conduct
that need not be directed at one's own competitor.
The FCA decision is expected to have a number of implications.
In particular, the decision confirms that the conduct of trade
associations, even if they do not compete directly with their
members, can engage the abuse of dominance provisions of the Act.
Trade associations should, therefore, be mindful of this risk when
implementing rules or offering services to members. Moreover, to
the extent that conduct need not be directed at a person's own
competitor, the decision opens the bounds of section 79 in ways
that may not be consistent with previous jurisprudence.
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