Canadian COMPETITION LAW

On May 22, 2012, the American Bar Association issued joint Antitrust and International Law Section comments on the Competition Bureau’s revised draft Abuse of Dominance Enforcement Guidelines.  (The Bureau issued revised draft Abuse Guidelines for public comment on March 22^nd – see: Competition Bureau Issues Revised Abuse of Dominance Guidelines for Comment).

Some of the more interesting points of the ABA Sections’ joint comments include:

Unilateral conduct.  The Sections recognize that unilateral conduct is inherently ambiguous (as well as the relative vacuum of section 79 abuse of dominance jurisprudence to date in Canada, unlike some other major jurisdictions including the United States and European Union).

AMPs.  The Sections call for additional guidance as to when the Bureau will seek administrative monetary penalties (the current revised draft Guidelines describe when the Tribunal may order AMPs but contain no guidance as to when the Bureau may seek AMPs, which were introduced in March, 2009 and expose companies to penalties of up to $15 million).  The ABA Sections specifically recommend that the Bureau “offer guidance on practical aspects of the use of AMPs, including when and why AMP remedies will be sought by the Bureau, the scale of AMPs likely to be sought, and what type of conduct will typically be in issue when AMPs are sought.”

Examples and analysis.  The Sections criticize the significant reduction in examples and analysis in the revised draft Guidelines compared to the previous 2001 Guidelines, which the ABA refers to as a “substantial loss of guidance to the business community”.

Intent and joint abuse.  The Sections question why the Bureau has chosen to take the position that intent to injure or exclude a competitor is not a necessary element of abuse under section 79 (which is well established in Canada) and call for increased guidance on the Bureau’s position of what will constitute joint dominance (an issue that remains unsettled in Canada).  With respect to intent, it is well established that an allegedly dominant firm must engage in intentional anti-competitive conduct (i.e., conduct that is “predatory, exclusionary or disciplinary” toward a competitor).

Replacement of sector and conduct specific guidelines.  The Sections ask for clarification as to whether the Bureau’s updated Abuse Guidelines are meant to replace earlier sector and conduct specific abuse related guidelines (including the Bureau’s draft Enforcement Guidelines on Abuse of Dominance in the Airline Industry, grocery abuse guidelines (Abuse of Dominance Provisions as Applied to the Grocery Sector), Information Bulletin on the Abuse of Dominance Provisions as Applied to the Telecommunications Industry and Predatory Pricing Enforcement Guidelines).

Regulated conduct defence.  The Sections suggest that earlier language be added once again to the current draft relating to whether (and under what circumstances) the Bureau will consider the application of Canada’s regulated conduct defence (a previously completely common law doctrine, recently partially codified under section 45 of the Competition Act, but which remains unsettled in relation to the Competition Act’s civil reviewable practices provisions including section 79).

The ABA Sections’ comments also address other aspects of the Bureau’s draft Guidelines including the hypothetical monopolist test, degree of market power (and time period during which market power must be exercised for control of a market(s) to exist), business justifications (which the Federal Court of Canada has held can offset allegedly anti-competitive acts) and the interplay between sections 79 (abuse of dominance) and 90.1 (civil agreements provision) of the Act.

For the ABA’s cover letter and comments see:

Cover letter

Comments

____________________

For more information about our regulatory law services contact: contact

For more regulatory law updates follow us on Twitter: @CanadaAttorney

Comments are closed.