In 2022, Parliament amended the Competition Act1 (the "Act"), allowing private parties to seek leave to bring applications for abuses of dominant position2 ("Abuse") to the Competition Tribunal.3 The decision in JAMP Pharma Corporation v Janssen Inc, 2024 Comp Trib 8 ("JAMP") is the first to interpret the leave test for Abuse cases. In JAMP, although the applicant failed to meet the test for leave on the particular facts of the case, the Tribunal interpreted the test as less stringent for Abuse cases, potentially opening the door for future cases to satisfy the leave threshold.
Background: JAMP concerns the market for biologic drugs containing an active ingredient called ustekinumab. JAMP Pharma Corporation ("JAMP Pharma") sought leave to commence an application against Janssen Inc. ("Janssen") under the Abuse provisions at section 79 of the Act. JAMP Pharma alleged that Janssen, producer of the drug STELARA, engaged in a practice of anti-competitive acts to prevent or delay entry and expansion into the ustekinumab drug market by JAMP Pharma.
The Leave Test Pre-JAMP: Under the Act, private actions can only be brought with leave of the Tribunal. This is governed under section 103.1(7) of the Act, which states:
The Tribunal may grant leave to make an application under section 75, 77 or 79 if it has reason to believe that the applicant is directly and substantially affected in the applicant's business by any practice referred to in one of those sections that could be subject to an order under that section. [Emphasis added].
The test requires that the applicant establish cogent, credible and objective evidence giving rise to a bona fide belief that:
- It was substantially affected in its business by the impugned practice, and
- that the impugned practice "could" be subject to an order under the section the application was made under.4
The threshold for an applicant to obtain leave is not intended to be high.5 It is important to note that, until JAMP, this test had only been used for the narrower restrictive trade practices under sections 75 to 77 of the Act.
Key to this case was the meaning of the word "business" in section 103.1(7) of the Act. Prior to JAMP, the Tribunal had repeatedly held that "business" means the "business as a whole", rather than a discrete portion of the business.6 The Sears case illustrates this distinction. That case involved an application by Sears Canada seeking leave to commence proceedings under section 75 of the Act. Sears Canada alleged that Christian Dior and Givenchy refused to supply products to Sears' department stores. Sears argued that the relevant "business" for the purpose of the leave application was the sale of Dior and Givenchy cosmetics. The Tribunal disagreed, finding that Sears' "business" must be considered as a whole, which was operating a department store.7 Due to this, the effect of the alleged misconduct on Sears' "business" was not "substantial", and the application for leave was dismissed.8 The effect of this "entire" business test was that businesses operating in large and diverse markets were less likely to meet the test for leave, as it is more difficult to show a "substantial" effect on a large, diversified business.
The Decision in JAMP: in JAMP, the Tribunal began by considering the text of s 103.1(7) in light of the nature of Abuse. Crucially, unlike section 75, section 79 of the Act (which establishes the reviewable conduct) refers to a "class or species of business", which had been interpreted in the jurisprudence as a defined product market, rather than the business as a whole.9 The Tribunal noted that no branch of section 79 requires proving an effect on the applicant's entire business, in contrast to the language of section 75 of the Act10. In other words, the Abuse provisions deal with defined product markets—not the applicant's business as a whole.11
The Tribunal also considered the purpose and context of the leave test, finding that the purpose is to permit private parties to bring actions where that party is affected by the impugned conduct.12 The applicant must be directly and substantially affected and be able to lead evidence sufficient to warrant a proceeding.13 This does not require an effect on the entire business. As Justice Little held, "an applicant may be directly and substantially affected in something less than its entire business."14
Thus, the Tribunal held that on an application for leave to commence a private action under section 79 of the Act, the applicant is not required to show that the impugned conduct under section 79 has a substantial impact on their entire business.15
However, at the next stage of the test, the Tribunal found that JAMP Pharma had failed to present credible, cogent and objective evidence that could give rise to a bona fide belief that it was directly and substantially affected in its business by the reviewable practice under section 79. As such, JAMP Pharma's application for leave was dismissed.
Key Takeaways: this decision lowers the threshold for bringing private actions at the Tribunal. By only requiring a substantial effect on part of the applicant's business (rather than the entire business), parties with diverse operations may be less likely to fail at this stage of the test for leave. This may open the door for a wide range of future cases, given the broad and diverse reach of the Abuse provisions.16
However, the fact that JAMP Pharma was not able to satisfy the test for leave in this case suggests that the Tribunal will continue to play an important screening role at the leave stage, and that only claims that are adequately supported by credible, cogent and objective evidence will meet the statutory test for leave.
JAMP will also likely inform future leave cases on restrictive trade practices. The lower threshold applies to current leave applications, despite certain amendments to the Act not yet coming into force until June 2025. JAMP also provides a roadmap for future leave applications under sections 75 and 77 of the Act. In 2024, Parliament amended section 103.1(7) to include effects on "part of" the applicant's business. While this amendment does not come into force until June 2025, the Tribunal's reasoning in JAMP is consistent with the plain language of the amended provision, which will govern applications for leave after June 2025.
Footnotes
1. RSC 1985, c C-34.
2. See Competition Act, ss 78-79.
3 .Competition Act, ss 103.1(1) and (7).
4. See e.g., Symbol Technologies Canada ULC v Barcode Systems Inc, 2004 FCA 339 at paras 16-17 [Symbol].
6. Sears Canada Inc v Parfums Christian Dior Canada Inc and Parfums Givenchy Canada Ltd, 2007 Comp Trib 6 at para 21 [Sears]; Audatex Canada, ULC v Car Proof Corporation, 2015 Comp Trib 28.
7. Sears, at para 27.
8. Sears, at para 39.
9. JAMP, at para 59; see also Canada (Commissioner of Competition) v Canada Pipe Co, 2006 FCA 236 at paras 10-11.
10. JAMP, at paras 60-61. Note that s 75 was amended in 2024 to include affects on "part" of the business, though this is not yet in force (seeFall Economic Statement Implementation Act, 2023, SC 2024 c 15, s 244).
11. JAMP, at para 64.
12. JAMP, at para 66; see also Symbol, at para 22.
13. JAMP, at para 68.
14. JAMP, at para 69.
15. JAMP, at para 70.
16. See e.g. the enumerated types of Abuse in Competition Act, s 78(1).
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