General framework

Legal framework

What is the legal framework in your jurisdiction covering the behaviour of dominant firms?

The Competition Act, RSC 1985, c. C-34, as amended (the Act) is the primary legislation that governs the behaviour of dominant firms in Canada. Section 78 provides an illustrative list of the types of practices that may qualify as abusive and section 79(1) of the Act defines the constituent elements of abuse of dominance, each of which must be established for the conduct to be prohibited and for a remedy to be granted.

The Act is administered and enforced by the Competition Bureau (the Bureau), headed by the Commissioner of Competition (the Commissioner). Final interpretation of the law is the responsibility of the Competition Tribunal (the Tribunal) and the courts.

In 2012, the Bureau issued Enforcement Guidelines on the Abuse of Dominance Provisions (sections 78 and 79 of the Competition Act) (the Guidelines), describing its approach to the interpretation of the statutory provisions in light of case law. In March 2018, the Bureau released draft updated Guidelines for public comment, but It is unclear when the final revised Guidelines may be issued.

Definition of dominance

How is dominance defined in the legislation and case law? What elements are taken into account when assessing dominance?

The statutory criteria for dominance are set out in section 79(1)(a) of the Act, which requires a finding that ‘one or more persons substantially or completely control, throughout Canada or any area thereof, a class or species of business’. Whether this statutory test is met turns on the definition of the relevant market and an assessment of the firm’s ability to exercise market power in that market.

As directly measuring market power may be difficult, the Tribunal will examine a number of factors such as market share, barriers to entry, reduction in non-price dimensions of competition (eg, quality, choice, variety), as well as countervailing power from customers or suppliers, and the competitive impact of technological change.

Purpose of legislation

Is the purpose of the legislation and the underlying dominance standard strictly economic, or does it protect other interests?

The stated purpose of the Act is ‘to maintain and encourage competition in Canada in order to promote the efficiency and adaptability of the Canadian economy, in order to expand opportunities for Canadian participation in world markets’. Simultaneously, the Act aims to ‘recognise the role of foreign competition in Canada, in order to ensure that small and medium-sized enterprises have an equitable opportunity to participate in the Canadian economy and in order to provide consumers with competitive prices and product choices’. In Canada (Director of Investigation and Research) v Southam Inc [1997] 1 SCR 748, the Supreme Court of Canada described the aims of the Act as more ‘economic’ than strictly ‘legal’.

Prior to the introduction of the current abuse of dominance provision into the Act, abuse of dominance was a criminal monopolisation offence that required proof of public detriment. However, it was recognised that public detriment did not equate with reduced competition and the criminal provision was subsequently removed and replaced with a civil provision.

Sector-specific dominance rules

Are there sector-specific dominance rules, distinct from the generally applicable dominance provisions?

No sector-specific dominance rules presently exist.

Historically, the Bureau published abuse of dominance enforcement guidelines for three specific sectors: the airline industry, the grocery sector and the telecommunications industry. However, the most recent Guidelines explicitly replace those sector-specific guidelines.

That said, the Bureau’s Intellectual Property Enforcement Guidelines (IPEGs), discussed in question 23, include specific comments and examples focused on particular industries, including pharmaceuticals and software. A revised draft of the IPEGs was proposed for public comment in November 2018 but does not contain material changes in relation to particular Industries.

Exemptions from the dominance rules

To whom do the dominance rules apply? Are any entities exempt?

Other than activities generally not subject to the Act, no entities are exempt from the dominance rules.

Although the dominance rules generally apply in respect of acts directed against competitors, recent case law (eg, Canada (Commissioner of Competition) v Toronto Real Estate Board 2014 FCA 29 [TREB]) suggests that acts by entities that do not per se compete in the relevant market but nonetheless have the ability to influence market participants through their regulatory, quasi-regulatory or licensing powers, may also by caught by the abuse of dominance rules.

Transition from non-dominant to dominant

Does the legislation only provide for the behaviour of firms that are already dominant?

In contrast to the United States, there is no concept of attempted monopolisation in Canada. The existence of market power at the time anticompetitive conduct is engaged in is implicit in the formulation of the statutory test and would prohibit an application to the Tribunal on the basis of anticipated market power. The Guidelines nonetheless suggest that the Bureau may investigate the conduct of a firm that does not presently hold market power but that is expected to acquire it as a result of the allegedly anticompetitive conduct, ‘within a reasonable period of time’. However, the Guidelines are not binding on either the Tribunal or the Commissioner.

See question 9 for more details.

Collective dominance

Is collective dominance covered by the legislation? How is it defined in the legislation and case law?

Collective or joint dominance is explicitly contemplated by the Act. The words ‘one or more persons’ in section 79(1)(a) suggest that a group of firms may possess market power even if no single member of the group holds market power on its own. The Bureau’s analytical framework in the case of joint dominance involves an assessment of whether those firms that are alleged to be engaged in a practice of anticompetitive acts jointly control a class or species of business such that they hold market power together.

According to the Guidelines, similar or parallel conduct by firms is insufficient, on its own, for the Bureau to consider those firms to be jointly dominant. Firms may engage in certain similar, pro-competitive practices (eg, matching price reductions) without triggering the abuse of dominance provisions.

Dominant purchasers

Does the legislation apply to dominant purchasers? Are there any differences compared with the application of the law to dominant suppliers?

The legislation applies equally to dominant suppliers and dominant purchasers and in public remarks, the Commissioner has confirmed that the use of buyer power can be considered an abuse of dominance, provided there is evidence of the buyer’s power to influence price and the other required elements of an abuse of dominance are established.

Historically, ‘buyer power’ has not been a significant focus of enforcement under the Act. One notable exception is a recent investigation in the grocery sector, which focused on a large retailer’s pricing strategies and programmes in the context of its relationship with its suppliers. In a statement following that investigation (Position Statement), the Bureau indicated that the relevant factors for the assessment of market power in that case included: limited existing or potential alternatives for suppliers to distribute their products, relatively low impact of purchases from an individual supplier on a grocery retailer’s revenue, and private label competition, which allows retailers to leverage negotiations with suppliers by threatening to favour their own private label products.

More generally, by way of guidance to the grocery sector, the Position Statement indicates that ‘market share may be a less informative indicator of market power, and accordingly should be afforded less weight, in cases involving upstream buying markets in the grocery sector’, that the Bureau ‘will place significant weight on the unique facts of each case’ in future cases, and that it is ‘unlikely to conclude a firm does not have market power simply because its market share falls below the Bureau’s safe harbour thresholds’. (See question 9 for more details.)

Market definition and share-based dominance thresholds

How are relevant product and geographic markets defined? Are there market-share at which a company will be presumed to be dominant or not dominant?

Market definition

Market definition focuses conceptually on the existence of substitutes for the product and geographical territory in question. It is usually determined on the basis of a ‘hypothetical monopolist’ test that looks at the smallest market in which a ‘small but significant and non-transitory increase in price’ could be profitably imposed, beginning with the product of the firm in question and the area in which it operates and expanding the relevant market to include other products or supplier locations likely to be substituted.

This approach is generally consistent with the approach taken by the Bureau in defining markets for purposes of merger analysis.

In addition to considering actual price and supply data, the Bureau may take into account a range of other factors, including consumer behaviour, past product or location substitution, product functional interchangeability, unique product characteristics, transportation costs and shipping patterns, switching costs, the role of distant sellers and foreign competition, and past price correlation among substitute products.

Market share-based dominance thresholds

While the Act does not contain ‘safe harbour’ market share thresholds, according to the Guidelines as published in 2012: (i) a market share of less than 35 per cent will generally not prompt further examination; (ii) a market share between 35 and 50 per cent will generally only prompt further examination if it appears the firm is likely to increase its market share through the alleged anticompetitive conduct within a reasonable period of time; and (iii) a market share of 50 per cent or more will generally prompt further examination. The draft update to the Guidelines, published for public comment in March 2018, proposes removing the reference to the 35 per cent threshold entirely, and instead referring only to the 50 per cent threshold.

In the case of joint dominance, a combined market share equal to or exceeding 65 per cent will generally prompt further examination, according to both the 2012 Guidelines and the draft update.

The Tribunal has held that where market share is 80 per cent or greater, it will look for ‘extenuating circumstances’ and ‘generally, ease of entry’ to outweigh a prima facie finding of market power. In practice, all contested abuse of dominance cases have involved firms with market shares of between 80 and 100 per cent. There has not been a contested joint dominance case in Canada to date.

Abuse of dominance

Definition of abuse of dominance

How is abuse of dominance defined and identified? What conduct is subject to a per se prohibition?

Both the effect on the market and the type of conduct involved determine whether a practice is considered abusive. Specifically, the Tribunal will only make an order if, in addition to the finding of dominance (see questions 2 and 9 for more details), the dominant firm or firms have engaged in or are engaging in a practice of anticompetitive acts, and the practice has had, is having or is likely to have the effect of preventing or lessening competition substantially in a market.

Practice of anticompetitive acts

Section 78 of the Act contains a list of anticompetitive acts that would be caught under the abuse provisions. The list is non-exhaustive and in practice, the abuse of dominance provisions can apply to a wide range of anticompetitive conduct.

In order to be considered ‘anticompetitive’, an act must be exclusionary, disciplinary or predatory towards a competitor in its purpose or reasonably foreseeable effect. This may be proven directly by evidence of subjective intent or inferred from the reasonably foreseeable consequences of the conduct.

Certain acts not specifically directed at competitors could still be considered to have an anticompetitive purpose (see question 5 for more details).

A ‘practice’ of anticompetitive acts under the abuse provisions generally requires more than a single act but could be met by a single act that has an ongoing or systemic effect or a lasting impact in a market. A practice may also consist of different forms of anticompetitive conduct, not only repeated use of the same conduct.

Substantial lessening or prevention of competition

The test for establishing the practice’s effect on the market is the ‘but for’ test: ‘but for the impugned conduct, would there likely be substantially greater competition (including in terms of lower consumer prices, substantially greater product selection, quality, innovation or more frequent switching) in the market in the past, present, or future’.

Effectively, this criterion requires a consideration of the actual economic effects of the impugned conduct.

Exploitative and exclusionary practices

Does the concept of abuse cover both exploitative and exclusionary practices?

Yes, the concept of abuse covers both exploitative and exclusionary practices as long as they have the requisite exclusionary, disciplinary or predatory effect on a competitor and lead to a substantial prevention or lessening of competition in the relevant market (see question 10 for more detail; see ‘Specific forms of abuse’ for examples of specific forms of practices).

Link between dominance and abuse

What link must be shown between dominance and abuse? May conduct by a dominant company also be abusive if it occurs on an adjacent market to the dominated market?

While there is no explicit requirement that a causal link between dominance and abuse be proven, all three elements of the abuse of dominance must be established for the Tribunal to grant a remedy.

Where a dominant company engages in conduct in a market adjacent to the dominated market, that conduct cannot be abusive unless the company is also found dominant in that adjacent market. That said, ‘dominance’ is not necessarily restricted to firms that compete directly in the relevant market and in some circumstances may include firms that have an ability to indirectly influence participants or competition in the market, or both. Further to the TREB case, in principle a firm that does not compete directly in the adjacent market could nonetheless be found to be dominant in such market.

See questions 5, 9 and 10 for more details.


What defences may be raised to allegations of abuse of dominance? When exclusionary intent is shown, are defences an option?

There is no efficiency defence to an allegation of abuse of dominance. The Tribunal may, however, consider whether any prevention or lessening of competition is attributable to the superior competitive performance of the dominant firm (eg, owing to economies of scope or scale, lower costs, innovation).

In addition, valid business justifications, although not a defence, can be adduced to rebut evidence that the purpose of the conduct in question is anticompetitive. To be valid, business justification must have a credible efficiency or pro-competitive rationale (eg, reducing costs of production or operation, improving technology or production processes, improving product quality or service), and must relate to and counterbalance the anticompetitive effects or subjective intent of the acts. Improved consumer welfare is not, on its own, sufficient to establish a valid business justification; nor is mere self-interest.

Specific forms of abuse

Types of conduct Types of conduct

Rebate schemes

Rebate schemes are not expressly identified as a form of potentially abusive conduct under the Act, but according to the Guidelines discounts or rebates may be an implicit form of predatory conduct. (See question 17.)

Tying and bundling

Tying and bundling are not specifically identified under the abuse of dominance provisions of the Act, although the Guidelines reference these as activities that increase customer switching costs, or in general, as potentially exclusionary abuses.

Tied selling is also addressed in section 77 of the Act, as a ‘reviewable’ practice separate from the abuse of dominance provisions (see question 34 for more details on reviewable practices that do not require that dominance be established).

Exclusive dealing

Exclusive dealing may be a form of anticompetitive act for the purpose of an abuse of dominance. For example, section 78 of the Act includes, among other potentially anticompetitive acts, requiring or inducing a supplier to sell only or primarily to certain customers, or to refrain from selling to a competitor, with the object of preventing a competitor’s entry into, or expansion in, a market.

A number of abuse of dominance cases have involved exclusivity arrangements imposed by suppliers on customers (see, for example, Canada (Director of Investigation and Research), Competition Act v NutraSweet Co (1990), 32 CPR (3d) 1 (Comp Trib) and Canada (Commissioner of Competition) v Canada Pipe Co, 2006 FCA 233).

Exclusive dealing is also addressed in section 77 of the Act, as a ‘reviewable’ practice separate from the abuse of dominance provisions. (See question 34 for more details on reviewable practices that do not require that dominance be established.)

Predatory pricing

Section 78 of the Act enumerates several examples of discriminatory or predatory conduct for the purpose of abuse of dominance, including freight equalisation, introducing fighting brands selectively and temporarily, buying up product to prevent price erosion, and selling articles below acquisition cost.

Recoupment is a necessary element. The Bureau will assess whether the predatory price is sufficient to cover the average avoidable (ie, variable) costs of providing a good or service, taking into account whether competitors could match the price without incurring a loss, and whether an allegedly predatory price is being offered to meet competition.

Price or margin squeezes

Price squeezing is an enumerated anticompetitive act under section 78(1)(a) of the Act. Specifically, this involves squeezing, by a vertically integrated supplier, of the margin available to an unintegrated customer who competes with the supplier, for the purpose of impeding or preventing the customer’s entry into, or expansion in, a market.

Refusals to deal and denied access to essential facilities

Denied access to essential facilities is an enumerated anticompetitive act under section 78(1)(e) of the Act. Specifically, this involves the pre-emption of scarce facilities or resources required by a competitor for the operation of a business, with the object of withholding the facilities or resources from a market.

Where scarce facilities or resources are legitimately used for one’s own business operations, this generally will not be considered an anticompetitive act.

Refusal to deal may, in principle, constitute an ‘anticompetitive act’ for the purpose of the dominance provisions. However, as refusal to deal is specifically addressed in section 75 of the Act, as a separate ‘reviewable’ practice, the Bureau is more likely to pursue this type of conduct under that section, rather than as abuse of dominance (see question 34 for more details on reviewable practices that do not require that dominance be established).

Predatory product design or a failure to disclose new technology

Predatory product design is an enumerated anticompetitive act under section 78(1)(g) of the Act. Specifically, this involves the adoption of product specifications that are incompatible with products produced by any other person and are designed to prevent entry into, or to eliminate that person from the market.

Price discrimination

There are not currently any price discrimination laws that apply outside the context of the Act. Until 2009, the Act contained a per se criminal prohibition on price discrimination, geographic price discrimination and discriminatory promotional allowances. In 2009 these provisions were repealed. However, this conduct remains subject to review under the abuse of dominance provisions where the conditions of section 79 are met. (See also question 17 for enumerated examples of discriminatory or predatory conduct under the Act.)

Exploitative prices or terms of supply

See question 11.

Abuse of administrative or government process

The abuse of dominance provisions of the Act do not explicitly contemplate abuse of administrative or government processes as potential forms of abuse.

That said, the IPEGs outline the Bureau’s approach to dealing with competition issues involving intellectual property, including potential abuse of dominance through industry-specific conduct such as ‘product switching’ (or ‘product hopping’) and patent litigation settlements. The IPEGs reflect a sharper focus on potential concerns associated with market power in particular in the pharmaceutical industry.

Additionally, the Guidelines state that considerations such as tariffs, quotas, regulatory impediments, anti-dumping complaints or duties, government procurement policies, intellectual property laws, exchange rate fluctuations, and international product standardisation may be relevant to the Bureau’s examination of the influence of foreign-based suppliers. While not necessarily forms of abuse themselves, these factors may be relevant when examining foreign competition for the purpose of identifying the relevant geographic markets in abuse cases.

Mergers and acquisitions as exclusionary practices

An acquisition by a supplier of a customer who would otherwise be available to a competitor of the supplier and vice versa is an enumerated anticompetitive act under section 78(1)(b) of the Act.

In addition, acquisitions of competitors have been identified by the Tribunal as acts constituting an anticompetitive practice.

Other abuses

As the list of anticompetitive acts in section 78 of the Act is not exhaustive, a number of additional practices such as the following could potentially be caught under the abuse of dominance provisions, provided other statutory criteria set out in section 79(1) are met:

  • publication of price lists or advance announcements of planned price increases;
  • delivered pricing;
  • certain contractual vertical arrangements such as various exclusivity requirements and related terms intended to discourage dealing with other parties (eg, automatic renewal or ‘evergreen’ clauses, imposition of switching costs and early termination penalties), and terms that reference competitors (eg, meet-or-release and ‘most-favoured nation’ clauses);
  • broad non-compete clauses; and
  • strategic use of actual or threatened litigation against customers or (potential or actual) competitors.

Enforcement proceedings

Enforcement authorities

Which authorities are responsible for enforcement of the dominance rules and what powers of investigation do they have?

Responsibility for the enforcement of the dominance rules under the Act falls primarily to the Commissioner, and those to whom the Commissioner delegates responsibilities (ie, the Bureau). The Bureau is empowered to conduct inquiries into potential abuse of dominance behaviour and bring applications before the Tribunal for remedies, subject to various statutory procedural limitations.

During an inquiry, the Bureau has access to a number of formal investigatory tools including the ability to obtain a judicial order under section 11 of the Act to compel oral examination, document production, or a written response to questions, where the Bureau believes grounds may exist for an order. The Bureau has increasingly made use of this tool to compel production in recent years. The Bureau can also obtain a warrant to enter and search premises and seize documents, or in ‘exigent’ circumstances, exercise these rights without a warrant.

Sanctions and remedies

What sanctions and remedies may the authorities impose? May individuals be fined or sanctioned?

Violations of the abuse of dominance provisions are subject to prohibition orders and administrative monetary penalties (AMPs).

The Tribunal may issue an order prohibiting the continuation of an impugned practice and in addition, or as an alternative, also has broad discretion to make any other order, where a prohibition order alone is not likely to be sufficient to restore competition in the market.

The Tribunal’s authority to make a restorative order explicitly extends to an order to divest assets or shares, although to date divestiture has never been ordered under section 79 and orders have been limited to behavioural remedies.

The Tribunal may also impose AMPs of up to C$10 million in the first instance or C$15 million for a subsequent order. Pursuant to section 79(3.2) of the Act, the Tribunal is required to consider various factors in determining the amount of an AMP, including the affected sales, actual or anticipated profits, the dominant firm’s financial position, its history of compliance and ‘any other relevant factor’. An unpaid AMP is a debt owed to the Crown and recoverable in any court of competent jurisdiction.

Where an inquiry is ongoing, under certain circumstances the Tribunal may issue an interim order (on application by the Bureau on an ex parte basis) prohibiting conduct that could be subject to an order under the abuse of dominance provisions.

The Bureau sought maximum AMPs of C$10 million and C$15 million, respectively, in recent enforcement actions against two Ontario companies in the residential market for rental water heaters and related services. The two companies ultimately entered into consent agreements with the Bureau and agreed to pay an AMP of C$5 million (plus C$500,000 to the Bureau’s investigation costs) and C$1 million, respectively. The maximum AMPs sought and the penalties ultimately imposed - the first for abuse of dominance in Canada - represent unprecedented remedies in a Canadian abuse of dominance case.

Enforcement process

Can the competition enforcers impose sanctions directly or must they petition a court or other authority?

The Bureau cannot impose sanctions directly and must apply to the Tribunal for an order.

It is increasingly common for alleged abuses of dominance to be investigated and initially challenged outside the formal Tribunal process with a view to seeking a negotiated resolution. Negotiated settlements are then recorded in a ‘consent agreement’, which is then registered with the Tribunal and, once registered, carries the legal force of an order of the Tribunal.

Enforcement record

What is the recent enforcement record in your jurisdiction?

The Bureau does not publish up-to-date statistics on the number of abuse of dominance investigations commenced or discontinued. However, abuse of dominance ranks very high among Bureau’s enforcement priorities and the abuse of dominance provisions are vigorously enforced.

In recent cases, the forms of abuse that have been prosecuted have varied. For example, TREB dealt with a restriction by the Toronto Real Estate Board of members’ access to multiple listing service information. Recent cases involving residential water heaters involved alleged ‘aggressive retention tactics’ during customer calls, as well as other policies and procedures aimed at hindering switching to competitors. A case in the pharmaceutical sector involved alleged ‘product hopping’ through intentional disruption of the supply of a branded prescription anti-allergy drug in order to limit or prevent meaningful competition from generic drug companies. In the medical devices sector, a recent case involved the imposition of warranty terms relating to one company’s insulin pumps with other companies’ equipment, which allegedly limited competition and restricted consumer choice. A recent case involving an online search engine and advertiser dealt with alleged conduct intended to exclude or disadvantage competitors, including through the imposition of conditions and demands on customers preventing rivals from competing. Another investigation focused on a device manufacturer’s agreements with Canadian wireless carriers. The Bureau’s recently discontinued three-year investigation in the grocery sector targeted a large grocery retailer’s pricing strategies and programmes in the context of its relationship with its suppliers. (See also below and question 8 for more details.)

Based on these recent cases, abuse of dominance cases generally may last between two and five years, from the Bureau’s initiation of an investigation or filing of an application with the Tribunal, to an order of the Tribunal or registration of a consent agreement. It is not uncommon for the Bureau to initiate an investigation that lasts two or more years before the Bureau makes an application to the Tribunal or discontinues the investigation.

In August 2018, the Supreme Court of Canada dismissed an application by TREB seeking leave to appeal a decision of 1 December 2017 of the Federal Court of Appeal, bringing an end to a long-running case that concerned one of the prevailing tests for finding that an abuse of dominance has occurred. The case involved restrictions on TREB members’ provision of direct access to multiple listing service information such as sales inventory, selling price and broker compensation, which the Bureau argued prevented the introduction of internet-based services such as ‘virtual office websites’ through which such information could be made available at low cost. In its original 2013 decision, the Tribunal found that TREB did not compete with its members, and, therefore, could not satisfy this test. However, on appeal, the Federal Court of Appeal held that the abuse of dominance provisions could apply on the basis that TREB controls the market for residential real estate services in the Toronto metropolitan area, even though it is not technically a competitor in that market, and referred the matter back to the Tribunal for reconsideration. Following the rehearing, the Tribunal ruled in April 2016 that abuse of dominance was established; the Federal Court of Appeal’s decision in December 2017 upheld that ruling.

In September 2016, the Bureau also filed a notice of application against the Vancouver Airport Authority (VAA) under the abuse of dominance provisions of the Act with respect to restrictions that decrease competition among in-flight catering companies at Vancouver International Airport. Similar to TREB, the case involves alleged abuse of dominance in a market in which the VAA technically is not a direct competitor. Following further proceedings, the Commissioner and the VAA submitted their closing arguments in November 2018.

In November 2017, the Bureau announced the discontinuation of its three-year investigation into a large grocery retailer, indicating in its Position Statement that it reached two conclusions before deciding to do so: that the retailer in question no longer enforced certain policies (further to an earlier communication by the retailer to its suppliers during the investigation that it would cease to do so effective January 2016), and that, on balance, there was insufficient evidence to conclude that the policies had lessened or prevented competition substantially. At the end of 2018, the Bureau also closed an investigation into practices of three brand name pharmaceutical manufacturers involving attempts to restrict access by generic drug manufacturers to samples of brand name drugs required to prove the bio-equivalency of the generic products. While the Bureau concluded that there was insufficient evidence to demonstrate substantial prevention or lessening of competition (and, as a result, the contravention of the abuse of dominance provisions), it acknowledged that evidence obtained during the investigation supported the generic manufacturers’ position that they faced barriers impeding their access to the branded drugs, which, in some cases, were likely because of the actions of brand manufacturers. In its press release, the Bureau also specifically states that this type of alleged conduct may warrant further enforcement or advocacy action in the future.

In January 2018, the Bureau entered into a settlement agreement with a software development company in the travel industry, pursuant to which the company committed to ending certain restrictive business practices that the Bureau considered to have lessened or prevented competition in markets relating to the supply of ‘all-inclusive’ travel packages.

The Bureau has also recently commenced an investigation into a national airline’s low-cost carrier division, alleging that its below-cost fares amounted to predatory pricing as they were designed to force rivals out of the market.

Contractual consequences

Where a clause in a contract involving a dominant company is inconsistent with the legislation, is the clause (or the entire contract) invalidated?

In principle, either a clause or the entire contract may be invalidated as part of a behavioural remedy under section 79. A firm may also agree to modify its contractual terms under a consent agreement. (See question 26.)

Private enforcement

To what extent is private enforcement possible? Does the legislation provide a basis for a court or other authority to order a dominant firm to grant access, supply goods or services, conclude a contract or invalidate a provision or contract?

There is no private right of action for abuse of dominance in Canada. Only the Commissioner may bring applications or register consent agreements with the Tribunal. However, under section 36 of the Act a private right of action is available where an order of the Tribunal has been violated.

Attempts by private litigants to bring cases on the basis of civil conspiracy or torts alleging an abuse of dominant position have not been recognised, for the reason that unlike the criminal provisions, the civil provisions of the Act address conduct that is presumptively lawful unless and until an order has been granted by the Tribunal.

The Tribunal may order any remedy (structural or behavioural) required to restore competition, including granting access to infrastructure or technology, reinstating supply or goods or services or modifying contractual terms.

Private parties are also entitled to file a complaint with the Bureau with regard to the abuse of dominance provisions. Consumer and competitor complaints are a primary source of leads for Bureau investigations.

Separately, private parties may apply for leave to bring applications before the Tribunal under the refusal to deal (section 75), price maintenance (section 76), and exclusive dealing, tied selling and market restriction (section 77) provisions of the Act, where the underlying requirements of those sections are met. However, AMPs and damages are not available under these provisions, which are technically distinct from the abuse of dominance provisions.


Do companies harmed by abusive practices have a claim for damages? Who adjudicates claims and how are damages calculated or assessed?

There is no statutory right to damages as a result of a finding of an abuse of dominance, although section 36 provides a private right of action where an order of the Tribunal has been violated. (See question 31.)


To what court may authority decisions finding an abuse be appealed?

Decisions of the Tribunal may be appealed to the Federal Court of Appeal, and ultimately to the Supreme Court of Canada. Courts may refer matters back to the Tribunal for redetermination. While appeals on both questions of law and fact are possible, an appeal on a question of fact may be made only with leave of the Federal Court of Appeal.

Unilateral conduct

Unilateral conduct by non-dominant firms

Are there any rules applying to the unilateral conduct of non-dominant firms?

Yes. A number of practices may violate the Act if engaged in by non-dominant firms. Section 77 of the Act addresses exclusive dealing, tied selling and market restriction engaged in by ‘a major supplier of a product’. Although qualifying as a ‘major supplier’ still requires a degree of market power, case law indicates that it is lower than that required for dominance.

Sections 75 and 76 of the Act address resale price maintenance and refusals to deal. A firm does not need to be dominant to violate these provisions. However, given that both require an ‘adverse effect on competition’ to be actionable, a degree of market power on the part of the offending firm is still required.

Update and trends

Recent developments

Are changes expected to the legislation or other measures that will have an impact on this area in the near future? Are there shifts of emphasis in the enforcement practice – for example, that enforcement is expected to focus on a particular business sector in the time to come, or that, more generally, economic considerations are given greater weight than in the past?

Forthcoming changes

35 Are changes expected to the legislation or other measures that will have an impact on this area in the near future? Are there shifts of emphasis in the enforcement practice?

Since the late 2000s, cases and investigations reflect a trend towards an intensified focus on competition law compliance and enforcement, including in the area of abuse of dominance.

The Bureau’s stated interest in strengthening cooperative ties with its international counterparts indicates that collaboration with enforcement agencies in other jurisdictions, including on dominance matters, is an ongoing priority and is likely to feature prominently in future enforcement. Equally, enforcement and policy trends also reflect the Bureau’s emphasis on internal synergies and collaboration in the administration and enforcement of the Competition Act, suggesting increasingly close alignment between the assessment of possible abuses of dominance and other areas of the Bureau’s mandate such as merger reviews.

A continued focus on the digital economy and innovative markets generally as they relate to dominance also appears likely, in light of recent enforcement trends and the Bureau’s stated commitments in its 2017-2018 and 2018-2019 Annual Plans. The release of updated guidance (IPEGs) on the interface between intellectual property and competition law, which is expected to be finalised in 2019, and the Bureau’s white paper and report on big data and innovation published in early 2018, further underline the Bureau’s growing interest in innovative industries.

Recent enforcement activity in the area of abuse of dominance, such as the grocery investigation and the VAA proceedings, suggests a growing focus on the possibility of dominance (and abuse of a dominant position) by firms that technically do not compete in the relevant market or markets. A draft updated version of the Guidelines published in March 2018 also revisits the concept of dominance, indicating that the Bureau will adopt a ‘holistic’ approach to the assessment of market power and expressly contemplating the ability to exclude by firms that do not compete in the relevant market.