Competition Act (R.S.C., 1985, c. C-34)

Exclusive Dealing, Tied Selling and Market Restriction

Marginal note:Definitions

• 77 (1) For the purposes of this section,

  exclusive dealing

  exclusive dealing means

  • (a) any practice whereby a supplier of a product, as a condition of supplying the product to a customer, requires that customer to

    • (i) deal only or primarily in products supplied by or designated by the supplier or the supplier’s nominee, or

    • (ii) refrain from dealing in a specified class or kind of product except as supplied by the supplier or the nominee, and

  • (b) any practice whereby a supplier of a product induces a customer to meet a condition set out in subparagraph (a)(i) or (ii) by offering to supply the product to the customer on more favourable terms or conditions if the customer agrees to meet the condition set out in either of those subparagraphs; (exclusivité)

  market restriction

  market restriction means any practice whereby a supplier of a product, as a condition of supplying the product to a customer, requires that customer to supply any product only in a defined market, or exacts a penalty of any kind from the customer if he supplies any product outside a defined market; (limitation du marché)

  tied selling

  tied selling means

  • (a) any practice whereby a supplier of a product, as a condition of supplying the product (the “tying” product) to a customer, requires that customer to

    • (i) acquire any other product from the supplier or the supplier’s nominee, or

    • (ii) refrain from using or distributing, in conjunction with the tying product, another product that is not of a brand or manufacture designated by the supplier or the nominee, and

  • (b) any practice whereby a supplier of a product induces a customer to meet a condition set out in subparagraph (a)(i) or (ii) by offering to supply the tying product to the customer on more favourable terms or conditions if the customer agrees to meet the condition set out in either of those subparagraphs. (ventes liées)

• Marginal note:Exclusive dealing and tied selling

  (2) Where, on application by the Commissioner or a person granted leave under section 103.1, the Tribunal finds that exclusive dealing or tied selling, because it is engaged in by a major supplier of a product in a market or because it is widespread in a market, is likely to

  • (a) impede entry into or expansion of a firm in a market,

  • (b) impede introduction of a product into or expansion of sales of a product in a market, or

  • (c) have any other exclusionary effect in a market,

  with the result that competition is or is likely to be lessened substantially, the Tribunal may make an order directed to all or any of the suppliers against whom an order is sought prohibiting them from continuing to engage in that exclusive dealing or tied selling and containing any other requirement that, in its opinion, is necessary to overcome the effects thereof in the market or to restore or stimulate competition in the market.

• Marginal note:Market restriction

  (3) Where, on application by the Commissioner or a person granted leave under section 103.1, the Tribunal finds that market restriction, because it is engaged in by a major supplier of a product or because it is widespread in relation to a product, is likely to substantially lessen competition in relation to the product, the Tribunal may make an order directed to all or any of the suppliers against whom an order is sought prohibiting them from continuing to engage in market restriction and containing any other requirement that, in its opinion, is necessary to restore or stimulate competition in relation to the product.

• Marginal note:Damage awards

  (3.1) For greater certainty, the Tribunal may not make an award of damages under this section to a person granted leave under subsection 103.1(7).

• Marginal note:Where no order to be made and limitation on application of order

  (4) The Tribunal shall not make an order under this section where, in its opinion,

  • (a) exclusive dealing or market restriction is or will be engaged in only for a reasonable period of time to facilitate entry of a new supplier of a product into a market or of a new product into a market,

  • (b) tied selling that is engaged in is reasonable having regard to the technological relationship between or among the products to which it applies, or

  • (c) tied selling that is engaged in by a person in the business of lending money is for the purpose of better securing loans made by that person and is reasonably necessary for that purpose,

  No order made under this section applies in respect of exclusive dealing, market restriction or tied selling between or among entities that are affiliated.

• Marginal note:If entity affiliated

  (5) For the purposes of subsection (4), in addition to the circumstances specified in paragraph 2(2)(a) or (b) under which two entities are affiliated, an entity is affiliated with another entity in respect of any agreement between them in which one of them grants to the other the right to use a trademark or trade name to identify the business of the grantee, if

  • (a) the business is related to the sale or distribution, in accordance with a marketing plan or system prescribed substantially by the grantor, of a multiplicity of products obtained from competing sources of supply and a multiplicity of suppliers; and

  • (b) no one product dominates the business.

• Marginal note:When persons deemed to be affiliated

  (6) For the purposes of subsection (4) in its application to market restriction, where there is an agreement whereby one person (the “first” person) supplies or causes to be supplied to another person (the “second” person) an ingredient or ingredients that the second person processes by the addition of labour and material into an article of food or drink that he then sells in association with a trademark that the first person owns or in respect of which the first person is a registered user, the first person and the second person are deemed, in respect of the agreement, to be affiliated.

• Marginal note:Inferences

  (7) In considering an application by a person granted leave under section 103.1, the Tribunal may not draw any inference from the fact that the Commissioner has or has not taken any action in respect of the matter raised by the application.

Abuse of Dominant Position

Marginal note:Definition of anti-competitive act

• 78 (1) For the purposes of section 79, anti-competitive act means any act intended to have a predatory, exclusionary or disciplinary negative effect on a competitor, or to have an adverse effect on competition, and includes any of the following acts:

  • (a) squeezing, by a vertically integrated supplier, of the margin available to an unintegrated customer who competes with the supplier, for the purpose of impeding or preventing the customer’s entry into, or expansion in, a market;

  • (b) acquisition by a supplier of a customer who would otherwise be available to a competitor of the supplier, or acquisition by a customer of a supplier who would otherwise be available to a competitor of the customer, for the purpose of impeding or preventing the competitor’s entry into, or eliminating the competitor from, a market;

  • (c) freight equalization on the plant of a competitor for the purpose of impeding or preventing the competitor’s entry into, or eliminating the competitor from, a market;

  • (d) use of fighting brands introduced selectively on a temporary basis to discipline or eliminate a competitor;

  • (e) pre-emption of scarce facilities or resources required by a competitor for the operation of a business, with the object of withholding the facilities or resources from a market;

  • (f) buying up of products to prevent the erosion of existing price levels;

  • (g) adoption of product specifications that are incompatible with products produced by any other person and are designed to prevent his entry into, or to eliminate him from, a market;

  • (h) requiring or inducing a supplier to sell only or primarily to certain customers, or to refrain from selling to a competitor, with the object of preventing a competitor’s entry into, or expansion in, a market;

  • (i) selling articles at a price lower than the acquisition cost for the purpose of disciplining or eliminating a competitor;

  • (j) a selective or discriminatory response to an actual or potential competitor for the purpose of impeding or preventing the competitor’s entry into, or expansion in, a market or eliminating the competitor from a market; and

  • (k) directly or indirectly imposing excessive and unfair selling prices.

• (2) [Repealed, 2009, c. 2, s. 427]

Marginal note:Prohibition if abuse of dominant position

• 79 (1) On application by the Commissioner or a person granted leave under section 103.1, if the Tribunal finds that one or more persons substantially or completely control a class or species of business throughout Canada or any area of Canada, it may make an order prohibiting the person or persons from engaging in a practice or conduct if it finds that the person or persons have engaged in or are engaging in

  • (a) a practice of anti-competitive acts; or

  • (b) conduct

    • (i) that had, is having or is likely to have the effect of preventing or lessening competition substantially in a market in which the person or persons have a plausible competitive interest, and

    • (ii) the effect is not a result of superior competitive performance.

• Marginal note:Additional or alternative order

  (2) If, on an application under subsection (1), the Tribunal finds that a practice of anti-competitive acts amounts to conduct that has had or is having the effect of preventing or lessening competition substantially in a market in which the person or persons have a plausible competitive interest and that an order under subsection (1) is not likely to restore competition in that market, the Tribunal may, in addition to or in lieu of making an order under subsection (1), make an order directing any or all persons against whom an order is sought to take actions, including the divestiture of assets or shares, that are reasonable and necessary to overcome the effects of the practice in that market.

• Marginal note:Limitation

  (3) In making an order under subsection (2), the Tribunal shall make the order in such terms as will in its opinion interfere with the rights of any person to whom the order is directed or any other person affected by it only to the extent necessary to achieve the purpose of the order.

• Marginal note:Administrative monetary penalty

  (3.1) If the Tribunal finds that a person has engaged in or is engaging in a practice of anti-competitive acts that amounts to conduct that has had or is having the effect of preventing or lessening competition substantially in a market in which the person has a plausible competitive interest and it makes an order against the person under subsection (1) or (2), it may also order them to pay, in any manner that it specifies, an administrative monetary penalty in an amount not exceeding the greater of

  • (a) $25,000,000 and, for each subsequent order under either of those subsections, an amount not exceeding $35,000,000, and

  • (b) three times the value of the benefit derived from the anti-competitive practice, or, if that amount cannot be reasonably determined, 3% of the person’s annual worldwide gross revenues.

• Marginal note:Aggravating or mitigating factors

  (3.2) In determining the amount of an administrative monetary penalty, the Tribunal shall take into account any evidence of the following:

  • (a) the effect on competition in the relevant market;

  • (b) the gross revenue from sales affected by the practice;

  • (c) any actual or anticipated profits affected by the practice;

  • (d) the financial position of the person against whom the order is made;

  • (e) the history of compliance with this Act by the person against whom the order is made; and

  • (f) any other relevant factor.

• Marginal note:Purpose of order

  (3.3) The purpose of an order made against a person under subsection (3.1) is to promote practices by that person that are in conformity with the purposes of this section and not to punish that person.

• Marginal note:Factors to be considered

  (4) In determining, for the purposes of subsections (1) and (2), whether conduct has had, is having or is likely to have the effect of preventing or lessening competition substantially in a market, the Tribunal may consider

  • (a) the effect of the conduct on barriers to entry in the market, including network effects;

  • (b) the effect of the conduct on price or non-price competition, including quality, choice or consumer privacy;

  • (c) the nature and extent of change and innovation in a relevant market; and

  • (d) any other factor that is relevant to competition in the market that is or would be affected by the conduct.

• Marginal note:Exception

  (5) For the purpose of this section, an act engaged in pursuant only to the exercise of any right or enjoyment of any interest derived under the Copyright Act, Industrial Design Act, Integrated Circuit Topography Act, Patent Act, Trademarks Act or any other Act of Parliament pertaining to intellectual or industrial property is not an anti-competitive act.

• Marginal note:Limitation period

  (6) No application may be made under this section in respect of a practice of anti-competitive acts or conduct more than three years after the practice or conduct has ceased.

• Marginal note:Where proceedings commenced under section 45, 49, 76, 90.1 or 92

  (7) No application may be made under this section against a person on the basis of facts that are the same or substantially the same as the facts on the basis of which

  • (a) proceedings have been commenced against that person under section 45 or 49; or

  • (b) an order against that person is sought by the Commissioner under section 76, 90.1 or 92.

• Marginal note:Inferences

  (8) In considering an application by a person granted leave under section 103.1, the Tribunal may not draw any inference from the fact that the Commissioner has or has not taken any action in respect of the matter raised by the application.

Marginal note:Unpaid monetary penalty

79.1 The amount of an administrative monetary penalty imposed on a person under subsection 79(3.1) is a debt due to Her Majesty in right of Canada and may be recovered as such from that person in a court of competent jurisdiction.

Delivered Pricing

Marginal note:Definition of delivered pricing

• 80 (1) For the purposes of section 81, delivered pricing means the practice of refusing a customer, or a person seeking to become a customer, delivery of an article at any place in which the supplier engages in a practice of making delivery of the article to any other of the supplier’s customers on the same trade terms that would be available to the first-mentioned customer if his place of business were located in that place.

• Marginal note:Definition of trade terms

  (2) For the purposes of subsection (1), the expression trade terms means terms in respect of payment, units of purchase and reasonable technical and servicing requirements.