Essentials of Reviewable Matters

Introduction

The so-called “reviewable matters”[1] are a collection of provisions in the Competition Act[2] (the “Act”) that allow the Competition Tribunal (the “Tribunal”) to order remedies for various situations that can harm competition. Although these provisions are quite disparate, they share some important characteristics.

First, they are all civil in nature. This means that civil, not criminal, burdens and standards of proof apply.

Second, none of the activities dealt with in the reviewable matters provisions are unlawful. Indeed, they can be pro-competitive and efficiency-enhancing. Before the Tribunal can order a remedy more is needed, generally, a substantial lessening of competition.[3]

Third, the reviewable matters provisions generally deal with situations where a firm that already has market power engages in a practice designed to maintain or enhance its market power. Usually, but not always, the firm with market power is acting alone. By contrast, the merger provisions are designed to prevent situations where the merger of two firms increases the market power of the merged firm, thus harming competition. The criminal conspiracy provisions also deal with market power differently: they deal with cases where two or more firms that should be competing instead act in concert, achieving sufficient market power to harm competition unduly.

Fourth, the Tribunal is the exclusive forum for all applications under the reviewable matters provisions. Only the Commissioner of Competition (the “Commissioner”) can bring applications to the Tribunal, except for applications under the refusal to deal and exclusive dealing/tied selling/market restriction provisions, where private applicants can apply for leave to commence an application.

Fifth, the only remedies available are injunctive in nature: generally, either orders that the respondent stop some anti-competitive conduct, or that the respondent take positive steps to restore competition. So-called “structural orders” breaking up a company are possible, but have never been ordered. Punitive orders such as fines or prison are not available.[4] Nor are damages or restitutionary orders. In this way the reviewable matters provisions are distinct from the criminal provisions, where the remedies tend to be punitive,[5] and from the merger provisions, where only structural remedies are available in contested cases.[6]

The most important of the reviewable matters provisions are:

Abuse of dominance (s. 78 & 79): if a firm that controls a market engages in anti-competitive conduct, causing a substantial lessening or prevention of competition, the Tribunal can order the firm to stop the anti-competitive conduct or take positive measures to remedy the damage to competition. Anti-competitive conduct is basically conduct that is predatory, exclusionary or disciplinary. Section 78 contains a non-exhaustive list of examples of anti-competitive conduct. Anti-competitive conduct most frequently takes the form of exclusive contracting practices that shut other competitors out of the market.

Refusal to deal (s. 75): if a person’s business is substantially affected by an inability to obtain a product, and that inability is due to a lack of competition in that product market, and certain other requirements are met, the Tribunal can order a supplier of the product to accept that person as a customer on the usual trade terms.

Exclusive dealing, tied selling, and market restriction (s. 77): the Tribunal can prohibit these restrictive distribution practices if they are causing a substantial lessening or prevention of competition. In practice, the Tribunal is most likely to order a remedy when these practices also amount to an abuse of dominant position.

To date, the abuse of dominance provisions been the most used of the reviewable matters provisions. However, now that the refusal to deal provisions have been opened up to private applications, they are being used more frequently.

This paper discusses the elements of each of the key reviewable matters and covers the contested cases and major interpretive issues raised by each. Although these provisions are approaching their twentieth anniversary, they have spawned relatively few decided cases. As a result, the interpretation of these provisions is still in its infancy.

This is the shorthand by which s. 75-84 of the Act are known. The term comes from the title of Part VIII of the Act: “Matters Reviewable by Tribunal”. These sections are also sometimes called “Civil Matters”.

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Published May 9, 2005

[1] This is the shorthand by which s. 75-84 of the Act are known. The term comes from the title of Part VIII of the Act: “Matters Reviewable by Tribunal”. These sections are also sometimes called “Civil Matters”.

[2] R.S.C. 1985, c. C-34.

[3] The precise test varies.

[4] There is one exception, discussed below: the airline specific abuse of dominance provisions, which allow the Tribunal to impose “administrative monetary penalties” (fines). There have also been proposals for administrative monetary penalties for all abuse cases.

[5] Although injunctive relief in the form of prohibition orders is frequently ordered.

[6] Behavioural orders are possible in merger cases that proceed on consent.