Canadian COMPETITION LAW

July 9, 2024

OVERVIEW OF BILL C-59 AMENDMENTS
TO THE COMPETITION ACT

On June 20, 2024, Bill C-59 was passed, which introduced the third of three recent significant rounds of amendments to Canada’s federal Competition Act (together with amendments that were passed in June 2022 and December 2023).

This third round of amendments to the Competition Act completes a sweeping overhaul of Canada’s competition laws across virtually all key provisions of Canada’s competition legislation.

These amendments are also the most significant changes to Canadian competition law since the modern Competition Act came into force in 1986 replacing Canada’s former Combines Investigation Act.

In general, the amendments to the Competition Act over the past two years strengthen the Competition Bureau’s powers to enforce key deceptive marketing provisions of the Competition Act (e.g., relating to drip pricing, product performance claims and ordinary selling price (OSP) claims), strengthen private party rights to seek Competition Tribunal remedies (e.g., for civil deceptive marketing and violations of the civil agreements provisions of the Act), introduce new penalties (e.g., administrative monetary penalties for violating the civil agreements provision of the Act and for reprisal actions where individuals have been penalized for complying with the Act) and introduce a new clearance regime for environmental protection related agreements. The merger review regime was also substantially overhauled, eliminating the efficiency defence, introducing market share presumptions and a more restrictive remedial test for restoring competition.

For the Competition Bureau’s summary of the June 20, 2024 amendments to the Competition Act under Bill C-59, see: Guide to the June 2024 amendments to the Competition Act (June 25, 2024).

For more information about the Bill C-59 amendments, see also our posts: 2024 Competition Act Amendments (Bill C-59): Increased Risks for Advertisers for False or Misleading Price, Regular Price and Sale Claims and 2024 Competition Act Amendments (Bill C-59): Advertisers Must Now Back Up Product and Business Related Environmental Performance Claims.

NEW PENALTIES AND ENFORCEMENT OPTIONS
UNDER THE COMPETITION ACT

In addition to many new substantive amendments to Canada’s Competition Act, Bill C-59 has also introduced a number of significant new penalties for violations of the Act and given both the Competition Bureau and private parties new enforcement options. For more information about Canadian competition law enforcement generally, see: Enforcement.

Together with the many substantive changes, the increased range of criminal and civil penalties increase the risk for companies, trade and professional associations and other types of organizations that do not review their current operations to ensure Competition Act compliance and update their competition law compliance programs accordingly.

Some of the key penalty and enforcement related amendments to the Competition Act introduced by Bill C-59 include the following:

Civil Agreements Provision (Section 90.1)
of the Competition Act

As of June 20, 2025, private parties will be able to make private access applications to the Competition Tribunal for orders under section 90.1 (the civil agreements provision of the Act).

Under these new private access provisions, the Competition Tribunal will be able to order (as of June 20, 2025) monetary penalties to be paid to an applicant and any other person affected by conduct under section 90.1 in an amount, not exceeding the value of the benefit derived from the conduct that is subject to an order, in any manner that the Tribunal considers appropriate.

Together with amendments to section 90.1 in December 2023 (under Bill C-56) that broadened the application of this section to also include vertical agreements, the new private rights of access to the Competition Tribunal will mean more potential risk for competitor collaborations and other agreements (including vertical agreements) that are not caught by the criminal conspiracy provisions under section 45 of the Competition Act.

For more information about the civil agreements provision of the Competition Act, see: Conspiracy (Cartels).

Complainants and Whistleblowers
(New “Reprisal Action” Provisions)

New provisions to prohibit reprisal actions were enacted under Bill C-59 (sections 107.1-107.6 of the Competition Act).

Under these new provisions, actions taken by companies and other types of organizations to penalize, punish, discipline, harass or disadvantage any person because of their communications or cooperation with the Competition Bureau are now subject to potential court orders and monetary penalties.

In this regard, under these new reprisal action provisions, an application can be brought by either the Commissioner of Competition (who heads Canada’ federal Competition Bureau) or a person directly and substantially affected by an alleged reprisal action.

The potential penalties for violating these reprisal action provisions include prohibition orders to stop a person from continuing the conduct and administrative monetary penalties of, for an individual, up to $750,000 ($1 million for subsequent orders) and, for corporations, up to $10 million ($15 million for subsequent orders).

According to the Competition Bureau, these new reprisal action provisions will provide “an additional layer of protection for whistleblowers, complainants, industry participants and others that come forward and provide assistance under the Competition Act” (see: Competition Bureau, Guide to the June 2024 amendments to the Competition Act (June 25, 2024)).

These new reprisal action provisions of the Competition Act are in addition to existing safeguards for people that report violations of the Competition Act to the Competition Bureau, including the whistleblower provisions of the Act.

For more information about complainants and whistleblowers under the Competition Act, see: Competition Act Complaints and Whistleblowers.

Civil Deceptive Marketing Practices
(Part VII.1 of the Competition Act)

Starting on June 20 2025, private parties will be able to seek leave from the Competition Tribunal to commence proceedings under the civil deceptive marketing practices provisions of the Competition Act (Part VII.1) with the only leave requirement for standing being that the proceedings are in the “public interest”.

In contrast, in order to commence private damages actions or class actions for violations of the criminal misleading advertising provisions of the Competition Act, private parties must prove under section 36 of the Competition Act, in addition to the necessary elements of the relevant provision, that they have suffered actual loss or damage.

The civil deceptive marketing practices provisions of the Competition Act under Part VII.1 include bait and switch selling (section 74.02(2)), civil drip pricing (section 74.01(1.1)), some specific types of electronic advertising (section 74.011), ordinary selling price (OSP) claims and sale claims (sections 74.01(2)-(3)), performance claims (section 74.01(1)(b)), promotional contests/sweepstakes (section 74.06), selling products above advertised prices (section 74.05) and testimonials and endorsements (e.g., influencer marketing) (sections 74.01 and 74.02).

Before this amendment, only the Competition Bureau and not private parties could seek remedies from the Competition Tribunal or courts for violations of the civil deceptive marketing practices provisions of the Competition Act under Part VII.1 (though private parties could, and still can, commence private damages actions or class actions under the general criminal misleading representation provision of the Act, section 52, and under the other criminal misleading advertising provisions of the Act).

For more information about the civil and criminal misleading representation provisions of the Competition Act, see: Misleading Advertising.

Price Maintenance
(Section 76 of the Competition Act)

The Competition Tribunal will be able to award monetary penalties in addition to remedial orders under section 76 of the Competition Act as of June 20, 2025 (which is the coming into force date for this penalties related amendment).

In this respect, the Competition Tribunal will be able to award successful private applicants or any other person affected by the price maintenance conduct, an amount up to the value of the benefit derived from the conduct that is the subject of a Tribunal order.

Before this Bill C-59 amendment, the Competition Tribunal was limited to making “remedial orders” under section 76 of the Competition Act (e.g., an order to stop the conduct).

For more information about price maintenance under the Competition Act, see: Price Maintenance.

Refusals to Deal
(Section 75 of the Competition Act)

If the Competition Tribunal makes an order as the result of a private access application under section 75 of the Competition Act (i.e., by a private person as opposed to the Competition Bureau), it will also be able to order a supplier to pay an amount up to the value of the benefit derived from the conduct, to be distributed between the applicant and any other person affected by the supplier’s conduct.

Before this Bill C-59 amendment, the Competition Tribunal was limited to making “remedial orders” under section 75 of the Competition Act (e.g., to order a supplier to resume supply to a distributor or other reseller).

For more information about refusals to deal under the Competition Act, see: Refusal to Deal.

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Our experience includes advising clients in Toronto, Canada and the United States on the application of Canadian competition and regulatory laws and we have worked on hundreds of domestic and cross-border competition, advertising and marketing, promotional contest (sweepstakes), conspiracy (cartel), abuse of dominance, compliance, refusal to deal and pricing and distribution matters. For more information about our competition and advertising law services see: competition law services.

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For more information about our firm, visit our website: Competitionlawyer.ca

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