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OVERVIEW OF DECEMBER 2023
COMPETITION ACT AMENDMENTS (BILL C-56)

On December 15, 2023, Bill C-56 (An Act to amend the Excise Tax Act and the Competition Act), which introduced the first of two new significant rounds of amendments to the federal Competition Act, largely came into force.

This first new round of amendments to the Competition Act, which is intended to strengthen the ability of the Competition Bureau (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 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 repealing the efficiencies defences under section 90.1 and also for mergers under section 96.

These amendments 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 law.

The amendments introduced by Bill C-56 in December 2023 are expected to be followed by a second and more significant round of amendments contained in Bill C-59, which is currently working its way through Parliament. If passed, Bill C-59 would be the most important amendments to Canadian competition law since the current modern Competition Act replaced the former Combines Investigation Act in the 1980s.

For more information about the December 2023 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. For more information about Bill C-59, the second amending bill, which has not yet passed, see here.

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OVERVIEW OF
COMPETITION ACT AMENDMENTS (2009 and 2022)

2022 COMPETITION ACT AMENDMENTS

On June 23, 2022, significant amendments to many of the key criminal and civil provisions of the Competition Act came into force.

These amendments to the Competition Act include significant increases to the civil and criminal penalties under the Competition Act, new wage fixing and no poach offences, new prohibitions on 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, with the amendments to the conspiracy provision (including new wage fixing and no poaching offences and increased criminal fines) coming into force on June 23, 2023 to allow companies to adjust for the criminal conspiracy-related changes.

For a summary of the June 2022 amendments, see:

Sweeping Canadian Competition Act Amendments Passed

2009 COMPETITION ACT AMENDMENTS

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.

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.

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).

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.

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).

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.

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).

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.

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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.

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

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    WELCOME TO CANADIAN COMPETITION LAW! - OUR COMPETITION BLOG

    We are a Toronto based competition, advertising and regulatory law firm.

    We offer business, association, government and other clients in Toronto, Canada and internationally efficient and strategic advice in relation to Canadian competition, advertising, regulatory and new media laws. We also offer compliance, education and policy services.

    Our experience includes more than 20 years advising companies, trade and professional associations, governments and other clients in relation to competition, advertising and marketing, promotional contest, cartel, abuse of dominance, competition compliance, refusal to deal and pricing and distribution law matters.

    Our representative work includes filing and defending against Competition Bureau complaints, legal opinions and advice, competition, CASL and advertising compliance programs and strategy in competition and regulatory law matters.

    We have also written and helped develop many competition and advertising law related industry resources including compliance programs, acting as subject matter experts for online and in-person industry compliance courses and Steve Szentesi as Lawyer Editor for Practical Law Canada Competition.

    For more about us, visit our website: here.