SIGNIFICANT COMPETITION ACT AMENDMENTS CAME INTO FORCE
ON DECEMBER 15, 2023 (Bill C-56)
On December 15, 2023, Bill C-56 (An Act to amend the Excise Tax Act and the Competition Act), which introduces the first of two sweeping rounds of federal Competition Act (“Act”) amendments in Canada together with Bill C-59, received royal assent.
This first new round of amendments to the Act, which is intended, among other things, to strengthen the ability of private parties and the Competition Bureau to enforce the Act and competition in Canada overall, includes a number of fundamental changes to Canadian competition law. Bill C-59, once it is passed (expected in early 2024), will likely include a number of advertising/marketing law related amendments, including related to drip-pricing and green (environmental) claims.
These initial amendments under Bill C-56 include new broad powers for the Competition Bureau to conduct market studies, fundamental changes to the substantive test for abuse of dominance under section 79 of the Act (creating a new two-track test for abuse of dominance), new penalties for abuse of dominance, broadening the civil agreements provision (section 90.1) to include agreements between non-competitors, repealing the efficiencies provisions under section 90.1 and repealing the former efficiencies defence for mergers under section 96.
Our blog overview pages will be updated to reflect these important amendments, as well as the second round of amendments under Bill C-59, which are expected to come into force in early 2024.
For more information, see: Competition Bureau, Guide to the December 2023 amendments to the Competition Act.
********************
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, including the criminal and civil misleading advertising provisions.
These amendments to the Competition Act include significant increases to the civil and criminal penalties under the Competition Act including for civil misleading advertising, 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 $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 $750,000 for individuals and $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.
********************
SERVICES AND CONTACT
We are a Toronto based Canadian competition and advertising law firm that helps clients in Toronto, Canada and the United States practically navigate Canada’s advertising and marketing laws and offers Canadian advertising/marketing law services in relation to print, online, new media, social media and e-mail marketing.
Our Canadian advertising/marketing law services include advice in relation to anti-spam legislation (CASL), Competition Bureau complaints, the general misleading advertising provisions of the federal Competition Act, Internet, new media and social media advertising and marketing, promotional contests (sweepstakes) and sales and promotions. We also provide advice relating to specific types of advertising issues, including performance claims, testimonials, disclaimers, drip pricing, astroturfing and native advertising.
For more information about our services, see: services
To contact us about a potential legal matter, see: contact
For more information about our firm, visit our website: Competitionlawyer.ca
