On March 3, the Competition Tribunal dismissed the constitutional challenge brought by Google Canada Corporation and Google LLC of the new Competition Act provisions that provide for administrative monetary penalties of up to 3% of a corporation’s annual worldwide gross revenues.
While Google specifically challenged the constitutionality of the administrative monetary penalties (AMPs) that can be ordered under the civil abuse of dominance provisions of the Competition Act (Act), this decision likely applies equally to the several other civil provisions of the Act that have identical or similar AMP provisions.
Background
In November 2024, the Commissioner of Competition (the Commissioner) brought an application against Google to the Competition Tribunal (Tribunal) alleging anti-competitive practices in supplying online advertising technology services in Canada. Among other remedies, the Commissioner seeks - for the first time since the cap was increased from $10 million in June 2022 - an AMP equal to three times the value of the benefit derived from Google’s anti-competitive practices or, if that amount cannot be reasonably determined, 3% of Google’s worldwide gross revenues.
In response, Google challenged the constitutionality of the provision, arguing the financial penalties sought constitute a true penal consequence, entitling it to protections under the Canadian Charter of Rights and Freedoms (the Charter) and the Canadian Bill of Rights (the Bill of Rights), including the right not to be compelled to testify against oneself. Google requested that the Tribunal stay or dismiss the proceeding, or alternatively declare subsection 79(3.1) of the Act invalid.
The Tribunal’s decision
The Tribunal rejected Google’s arguments on all fronts using the application of the framework from Guindon v. Canada,1 as recently affirmed in John Howard Society of Saskatchewan v. Saskatchewan (Attorney General),2 to assess whether the AMPs constitute “true penal consequences” under section 11 of the Charter:
- Magnitude of the penalty: The Tribunal held that even very large AMPs can serve regulatory purposes when necessary to deter non-compliance by well-resourced corporations, noting the maximum AMP is not automatically imposed given subsection 79(3.2)’s mandatory consideration of factors such as the effect on competition and the respondent’s financial position.
- Factors guiding the AMP determination: The Tribunal distinguished criminal sentencing principles, emphasizing that subsection 79(3.3) expressly states the purpose of an AMP is “to promote practices by that person that are in conformity with the purposes of this section and not to punish that person.”
- Stigma: The Tribunal found Google’s evidence of reputational harm insufficient to establish stigma comparable to a criminal conviction.
Because Google failed to establish it had been “charged with an offence,” its claims under the Charter and the Bill of Rights failed. The Tribunal dismissed the motion in its entirety.
Key takeaway
This decision confirms (at first instance) that the significantly increased AMPs that can be imposed under the abuse of dominance provisions are not unconstitutional. This likely means the identical or similar AMP provisions that can be imposed under the civil anti-competitive agreements and deceptive marketing practices of the Act would also likely be upheld by the Tribunal if challenged.
This decision not only impacts the remedies that can be sought by the Commissioner under these provisions but also impacts the remedies that can be sought by private applicants under the civil provisions of the Act (as of June 20, 2025, private parties can bring enforcement actions). While this decision clearly gives the Commissioner a big enforcement stick, it gives the same big stick to private parties, which may encourage strategic or politically motivated litigation by competitors or advocacy groups.
On March 13, Google filed a notice of appeal of the Tribunal’s decision with the Federal Court of Appeal. Given the significance of this case, we will be actively monitoring this case and provide further updates as there are new developments.
