Originally published in Blakes Bulletin on Competition,
Antitrust & Foreign Investment, January 2009
On January 16, 2009, the Canadian Competition Bureau released
draft Abuse of Dominance Guidelines which, when finalized,
will replace the current Abuse of Dominance Guidelines
that were published in 2001. A copy of the draft Abuse Guidelines
and the Competition Bureau's press release announcing them are
available at: http://www.competitionbureau.gc.ca/eic/site/cb-bc.nsf/eng/02950.html
. The Competition Bureau has invited interested persons to submit
comments to it by April 20, 2009.
By way of background, under the abuse of dominance provisions of
Canada's Competition Act (section 79), the
Commissioner of Competition can apply to the Competition Tribunal
for a prohibition or remedial order where the following conditions
One or more persons substantially or completelycontrols in Canada a class or species of business. This
requirement has been held to require evidence that a dominant firm
holds market power, namely the ability to profitably set prices
above competitive levels for a considerable period of time, within
a relevant market.
The dominant firm (or dominant firms in the caseof joint dominance) has engaged in a practice of
anti-competitive act. This element requires evidence that the
anti-competitive conduct is part of a "practice" rather
than an isolated act and that the alleged conduct was adopted for
an anti-competitive purpose that is "predatory, exclusionary
or disciplinary". Importantly, the Competition Tribunal
confirmed in the Canada Pipe case that valid business
justifications can be considered for determining whether conduct
was taken for the purpose or with the intent of harming competitors
or for a credible efficiency or pro-competitive reason.
The anti-competitive conduct has had, is having oris likely to have the effect of preventing or lessening
competition substantially in a market. Essentially, this
element requires evidence that the alleged anti-competitive act
will "preserve or enhance the dominant firm's market
power." In Canada Pipe, the Federal Court of Appeal
confirmed that it is not relevant whether there will be sufficient
competition in absolute terms. Instead, the test is whether there
would have been substantially more competition but for the
The draft Abuse Guidelines provide a summary of the relevant
law, describe the Competition Bureau's enforcement approach and
recent economic thinking. The draft Guidelines expand on the
existing Abuse of Dominance Guidelines in a number of
Outlining the Bureau's approach to
anti-competitiveintent and valid business
justifications. The draft Abuse Guidelines describe the
Bureau's approach to determining the circumstances where it may
accept "valid business justifications" as demonstrating
that impugned conduct engaged in by a dominant firm was not adopted
for an anti-competitive purpose or with an anti-competitive
Clarifying the Bureau's approach to joint
dominance. Canada's abuse of dominance provisions can
apply to the conduct of more than a single firm where those firms
"jointly" dominate a market. The draft Abuse Guidelines
explain that the Bureau may consider firms to be jointly dominant
if they are engaged in similar potentially anti-competitive
behaviour and appear to jointly hold market power based on their
collective share of the market, barriers to entry or expansion, and
other factors. In the Competition Bureau's view, there is no
requirement that the jointly dominant firms co-ordinate their
conduct in an explicit or tacit manner, only that they engage in
similar potentially anti-competitive behaviour.
Describing and explaining specific forms of
anti-competitive conduct. The draft Abuse Guidelines provide
the Competition Bureau's views as to how exclusive dealing,
tying and bundling, and denial of access may constitute
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.
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