Canadian COMPETITION LAW

JUNE 2024
COMPETITION ACT AMENDMENTS
(BILL C-59)

On June 20, 2024, Bill C-59 was passed (the Fall Economic Statement Implementation Act, 2023), which introduced the third of three significant rounds of amendments to Canada’s federal Competition Act in two years (together with Bill C-19 and Bill C-56 discussed below).

This new round of amendments to the Competition Act completes a sweeping overhaul of the Competition Act 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 effect in 1986 replacing the former Combines Investigation Act.

The Bill C-59 amendments, among other things, strengthen the Competition Bureau’s powers to enforce key deceptive marketing provisions of the Competition Act (e.g., relating to drip pricing, 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 provisions of the Act and for reprisal actions penalizing individuals for complying with the Act) and introduce a new clearance regime for environmental protection related agreements.

Canada’s Competition Act merger review regime was also substantially overhauled, eliminating the efficiency defence, introducing market share presumptions and a more restrictive remedial test for restoring competition.

These amendments, together with those enacted in June 2022 and December 2023 (Bill C-19 and Bill C-56), increase the potential competition law risk for companies, trade and professional associations and other entities, particularly those without credible and effective competition law compliance programs and that have not reviewed their business practices to reflect Canada’s new competition laws.

*****************

Competition Bureau Preliminary Guidance on the Mergers
and Restrictive Trade Practices Provisions of the Competition Act

On November 7, 2024, the Competition Bureau issued preliminary guidance relating to the recent changes to the provisions on mergers and restrictive trade practices under the Competition Act – see:  here.

DECEMBER 2023
COMPETITION ACT AMENDMENTS
(BILL C-56)

On December 15, 2023, Bill C-56 largely came into force (An Act to amend the Excise Tax Act and the Competition Act), which introduced the second of three significant rounds of amendments to Canada’s federal Competition Act in two years (together with Bill C-19 and Bill C-59 discussed above and below).

This second new round of amendments to the Competition Act, which is intended to strengthen the ability of the Competition Bureau and private parties to enforce Canadian competition law and enhance competition generally in Canada, includes fundamental changes to Canadian competition law not seen since the last major amendments in 2009.

In general, the amendments to the Competition Act under Bill C-56 include new broad powers for the Competition Bureau to conduct market studies, changes to the core substantive test for abuse of dominance under section 79 (creating new two-track tests for abuse of dominance), increased penalties for abuse of dominance, broadening the civil agreements provision (section 90.1) to include agreements between non-competitors (i.e., to also apply to vertical agreements, such as distribution/supply agreements and vertical joint venture agreements) and repealing the efficiencies defences under section 90.1 and also for mergers under section 96.

These amendments, together with those enacted in June 2022 and June 2024 (Bill C-19 and Bill C-59), increase the potential competition law risk for companies, trade and professional associations and other entities, particularly those without credible and effective competition law compliance programs and that have not reviewed their business practices to reflect Canada’s new competition laws.

For more information about the December 2023 Competition Act amendments, see: Significant Canadian Competition Act Amendments Come Into Force (Bill C-56). See also: Competition Bureau, Guide to the December 2023 amendments to the Competition Act.

JUNE 2022
COMPETITION ACT AMENDMENTS
(BILL C-19)

On June 23, 2022, Bill C-19 came into force (An Act to implement certain provisions of the budget tabled in Parliament on April 7, 2022 and other measures), which introduced the first of three significant rounds of amendments to Canada’s federal Competition Act in two years (together with Bill C-56 and Bill C-59 discussed above).

These amendments to the Competition Act include significant increases to the civil and criminal penalties under the Competition Act, new employment related wage-fixing and no-poaching offences, new prohibitions against drip pricing and expansion of private rights of access to the Competition Tribunal for abuse of dominance under section 79, among other things.

Most of the amendments came into force on June 23, 2022, while the amendments to the conspiracy provision (including new wage-fixing and no-poaching offences and increased criminal fines) came into force on June 23, 2023, which was a one-year transitional period intended to allow companies to adjust for the criminal conspiracy-related changes.

These amendments, together with those enacted in December 2023 and June 2024 (Bill C-56 and Bill C-59), increase the potential competition law risk for companies, trade and professional associations and other entities, particularly those without credible and effective competition law compliance programs and that have not reviewed their business practices to reflect Canada’s new competition laws.

For more information about the June 2022 Competition Act amendments, see: Sweeping Canadian Competition Act Amendments Passed.

2009
COMPETITION ACT AMENDMENTS
(BILL C-10)

Sweeping amendments to Canada’s Competition Act came into force in 2009 and 2010 that were the most significant changes to Canadian competition/antitrust law in twenty-five years and, in some cases, since competition law was introduced in Canada in 1889 (one year before the Sherman Act in the United States in 1890).

Amendments included changes to all of the cornerstone provisions of the Act including to the criminal conspiracy, bid-rigging, criminal pricing, price maintenance, abuse of dominance, misleading advertising and merger notification provisions.  Some of the key changes included:

Conspiracy (Cartels).  Introducing a U.S.-style two-track criminal conspiracy regime, with “per se” criminal offences for three types of “hard core” cartel agreements between actual or potential competitors under section 45 (price-fixing, market allocation and output restriction agreements) and a second civil track for other types of non-hard core anti-competitive agreements that may prevent or lessen competition substantially under section 90.1. For more information, see: Conspiracy (Cartels).

Conspiracy Penalties.  Significantly increasing the penalties for criminal conspiracy offences with fines of up to Cdn. $25 million (per count) and/or imprisonment for up to 14 years. For more information, see: Conspiracy (Cartels).

Private Actions & Enforcement.  Removing the former competitive effects test (the former “undueness” requirement) for criminal conspiracy offences under section 45, making it easier for private plaintiffs to commence civil actions and for the Competition Bureau to prove criminal conspiracy offences.

Bid-rigging.  Introducing a new bid-rigging offence, making it a criminal offence to agree to withdraw a bid already made (in addition to the two existing offences: submitting a bid arrived at by agreement or agreeing not to bid). For more information, see: Bid-rigging.

Misleading Advertising.  Significantly increasing the penalties for civil misleading advertising including “administrative monetary penalties” (essentially civil fines) of up to Cdn. $750,000 for individuals and Cdn. $10 million for corporations. For more information, see: Misleading Advertising.

Criminal Pricing Provisions.  Repealing the former criminal predatory pricing and price discrimination provisions of the Competition Act.  This type of conduct may, however, still be challenged under the abuse of dominance provisions of the Competition Act (sections 78 and 79). For more information, see: Abuse of Dominance.

Price Maintenance.  Replacing the former per se criminal price maintenance offence with a new civil provision that now includes a market effects test, which requires that an “adverse effect on competition” be shown in addition to the other required elements under the new civil section 76. For more information, see: Price Maintenance.

Abuse of Dominance.  Introducing significant civil fines for the first time for abuse of dominance in Canada under section 79 of the Competition Act of $10 million ($15 million for subsequent orders). For more information, see: Abuse of Dominance.

Mergers.  Introducing a new U.S.-style two-stage merger notification and review regime and increased Competition Bureau powers to request additional information from merging parties, including additional filing requirements and higher penalties for non-compliance.  The size of transaction threshold was also increased with a new annual indexing formula to adjust the size of transaction threshold annually to reflect changes in Canada’s GDP.  For the current thresholds, please see our mergers page.

Post-merger challenges.  Reducing the period in which the Bureau may challenge completed mergers from three years to one year.

Domestic airline abuse of dominance provisions.  Repealing former specific abuse of dominance provisions relating to domestic airlines.

********************

SERVICES AND CONTACT

We are a Toronto based competition and advertising law firm offering business and individual clients efficient and strategic advice in relation to competition/antitrust, advertising, Internet and new media law and contest law. We also offer competition and regulatory law compliance, education and policy services to companies, trade and professional associations and government agencies.

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.

To contact us about a potential legal matter, see: contact

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