New Abuse of Dominance Guidelines Provide Less Guidance

The Competition Bureau has released the final version of its updated Enforcement Guidelines on Abuse of Dominance.

The new Abuse Guidelines are much slimmer than the 2001 guidelines they replace. Gone is the economic approach of the old guidelines. Instead, the 2012 guidelines contain little more than a bare-bones summary of the Competition Act’s abuse of dominance provisions. This is unfortunate, as most of the case law under this provision involves conduct that is not among the enumerated anti-competitive acts in section 79. The guidelines provide no indication at all about how the Bureau determine what remedies to seek, and in particular, when it will seek administrative monetary penalties (AMPs, basically, fines). In the result, the guidelines provide little guidance to business on provisions that now attract penalties of up to $10 million.

Interestingly, in the new guidelines, the Bureau tries to distance itself from the decision of the Federal Court of Appeal in Canada Pipe. In that decision, the court emphasized that to be anti-competitive, conduct must be intended to harm competitors. The Bureau now says that:

In any event, while many types of anti-competitive conduct may be intended to harm competitors, the Bureau considers that certain acts not specifically directed at competitors could still be considered to have an anti-competitive purpose.

This is consistent with our criticism of the Canada Pipe decision (see article):

Desjardins J.A.’s interpretation of the test raises interpretive problems. For instance, must the effects be on an identifiable competitor, as opposed to competitors in general, or a hypothetical competitor? It would seem that they must, since effects on competitors in general, or on hypothetical or potential competitors, would really amount to an effect on competition, which, according to Desjardins J.A., cannot be considered at the s. 79(1)(b) stage. This leads to a further problem. If there must be an effect on an identifiable competitor, then it may be that a monopolist could not engage in anti-competitive acts, since there are no competitors to suffer these effects.

Finally, Desjardins J.A.’s focus on effects on competitors is incongruous, given the oft-stated maxim that competition law protects competition, not competitors.

The author is, of course, pleased that the Bureau now seems to agree with this criticism. But the Bureau’s new position it is not consistent with the decision of the Federal Court of Appeal in Canada Pipe.