In March, 2009, sweeping amendments to the Competition Act came into force that included, among many other things, the introduction for the first time in Canada of monetary penalties for abuse of dominance (“administrative monetary penalties” or “AMPs”). Under Canada’s amended section 79, the Competition Tribunal may now order AMPs of up to $10 million ($15 million for subsequent orders).
Since that time, one contested abuse case has proceeded to the Competition Tribunal (the Bureau’s ongoing challenge against The Toronto Real Estate Board, in which the Bureau is seeking only remedial remedies not AMPs) and two new versions of the Bureau’s Abuse of Dominance Enforcement Guidelines have been issued for comment (the current draft version of which, while setting out when the Tribunal may order AMPs in abuse cases, provides no guidance as to when the Bureau will seek them).
On May 15, 2012, the C.D. Howe Institute’s Competition Policy Council issued a report, the result of its third meeting on May 7, 2012, calling for the Bureau to clarify its position as to when it will seek AMPs in abuse cases. (Unlike some provisions of the Act, in Canada the Bureau has exclusive jurisdiction to bring and prosecute abuse cases, which are heard before the federal Competition Tribunal.)
In issuing the Report, the C.D. Howe Institute’s Council said:
“The Competition Bureau should clarify how it will apply its powers under the Competition Act in seeking administrative monetary penalties for abuse of dominance, according to a consensus of the C.D. Howe Institute’s Competition Policy Council, which held its third meeting on May 7, 2012. …
There was a range of views among the Council members about whether AMPs for abuse of dominance are ever appropriate. Some members contended that AMPs are appropriate as a deterrence mechanism. Others expressed the view that the possibility of a firm’s being subject to AMPs would chill efficient arrangements. There was unanimity, however, on the point that the risks of over-deterrence associated with AMPs are real, and that it would be appropriate to know how the Bureau plans to approach the issue of AMPs in particular cases. Accordingly, the Council’s key recommendation is that the Competition Bureau issue guidance and explain the basis on which it will assess the AMPs it seeks.”
Some of the issues discussed in the Council’s Report include the constitutionality of AMPs (as yet to be determined) and a more reticent Bureau in terms of its abuse of dominance enforcement positions.
With respect to the latter, the Commissioner of Competition has indicated in recent public remarks that the markedly shorter draft Abuse Guidelines currently subject to public comments is an effort to let the Competition Tribunal, not the Bureau, decide where the boundaries of section 79 lie (which provides little comfort to firms given that there have only been about ten contested abuse cases since the modern Competition Act was introduced in 1986).
For a copy of the C.D. Howe Institute’s news release and Report see:
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