The Bureau does not publish up-to-date statistics on the number of abuse of dominance investigations commenced or discontinued. However, abuse of dominance ranks very high among Bureau’s enforcement priorities and the abuse of dominance provisions are vigorously enforced.
In recent cases, the forms of abuse that have been prosecuted have varied. For example, TREB dealt with a restriction by the Toronto Real Estate Board of members’ access to multiple listing service information. Recent cases involving residential water heaters involved alleged ‘aggressive retention tactics’ during customer calls, as well as other policies and procedures aimed at hindering switching to competitors. A case in the pharmaceutical sector involved alleged ‘product hopping’ through intentional disruption of the supply of a branded prescription anti-allergy drug in order to limit or prevent meaningful competition from generic drug companies. In the medical devices sector, a recent case involved the imposition of warranty terms relating to one company’s insulin pumps with other companies’ equipment, which allegedly limited competition and restricted consumer choice. A recent case involving an online search engine and advertiser dealt with alleged conduct intended to exclude or disadvantage competitors, including through the imposition of conditions and demands on customers preventing rivals from competing. Another investigation focused on a device manufacturer’s agreements with Canadian wireless carriers. The Bureau’s recently discontinued three-year investigation in the grocery sector targeted a large grocery retailer’s pricing strategies and programmes in the context of its relationship with its suppliers. (See also below and question 8 for more details.)
Based on these recent cases, abuse of dominance cases generally may last between two and five years, from the Bureau’s initiation of an investigation or filing of an application with the Tribunal, to an order of the Tribunal or registration of a consent agreement. It is not uncommon for the Bureau to initiate an investigation that lasts two or more years before the Bureau makes an application to the Tribunal or discontinues the investigation.
In August 2018, the Supreme Court of Canada dismissed an application by TREB seeking leave to appeal a decision of 1 December 2017 of the Federal Court of Appeal, bringing an end to a long-running case that concerned one of the prevailing tests for finding that an abuse of dominance has occurred. The case involved restrictions on TREB members’ provision of direct access to multiple listing service information such as sales inventory, selling price and broker compensation, which the Bureau argued prevented the introduction of internet-based services such as ‘virtual office websites’ through which such information could be made available at low cost. In its original 2013 decision, the Tribunal found that TREB did not compete with its members, and, therefore, could not satisfy this test. However, on appeal, the Federal Court of Appeal held that the abuse of dominance provisions could apply on the basis that TREB controls the market for residential real estate services in the Toronto metropolitan area, even though it is not technically a competitor in that market, and referred the matter back to the Tribunal for reconsideration. Following the rehearing, the Tribunal ruled in April 2016 that abuse of dominance was established; the Federal Court of Appeal’s decision in December 2017 upheld that ruling.
In September 2016, the Bureau also filed a notice of application against the Vancouver Airport Authority (VAA) under the abuse of dominance provisions of the Act with respect to restrictions that decrease competition among in-flight catering companies at Vancouver International Airport. Similar to TREB, the case involves alleged abuse of dominance in a market in which the VAA technically is not a direct competitor. Following further proceedings, the Commissioner and the VAA submitted their closing arguments in November 2018.
In November 2017, the Bureau announced the discontinuation of its three-year investigation into a large grocery retailer, indicating in its Position Statement that it reached two conclusions before deciding to do so: that the retailer in question no longer enforced certain policies (further to an earlier communication by the retailer to its suppliers during the investigation that it would cease to do so effective January 2016), and that, on balance, there was insufficient evidence to conclude that the policies had lessened or prevented competition substantially. At the end of 2018, the Bureau also closed an investigation into practices of three brand name pharmaceutical manufacturers involving attempts to restrict access by generic drug manufacturers to samples of brand name drugs required to prove the bio-equivalency of the generic products. While the Bureau concluded that there was insufficient evidence to demonstrate substantial prevention or lessening of competition (and, as a result, the contravention of the abuse of dominance provisions), it acknowledged that evidence obtained during the investigation supported the generic manufacturers’ position that they faced barriers impeding their access to the branded drugs, which, in some cases, were likely because of the actions of brand manufacturers. In its press release, the Bureau also specifically states that this type of alleged conduct may warrant further enforcement or advocacy action in the future.
In January 2018, the Bureau entered into a settlement agreement with a software development company in the travel industry, pursuant to which the company committed to ending certain restrictive business practices that the Bureau considered to have lessened or prevented competition in markets relating to the supply of ‘all-inclusive’ travel packages.
The Bureau has also recently commenced an investigation into a national airline’s low-cost carrier division, alleging that its below-cost fares amounted to predatory pricing as they were designed to force rivals out of the market.
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