Navigating the new landscape: Competition Act amendments on collaborations that prevent or lessen competition

Since 2022, the Government of Canada has introduced three waves of amendments to the Competition Act (Act), making substantive changes to Canada’s competition laws, with the most recent amendments receiving royal assent on June 20. Our publication on all the amendments can be found here.

Among the amendments are several changes to the provisions of section 90.1 of the Act, which are aimed at civil (non-criminal) anti-competitive agreements. The amendments to section 90.1 broaden the scope of captured agreements, introduce significant fines, and allow for private rights of action with damages.

Prior to the amendments, section 90.1 of the Act targeted competitor collaborations, that is to say agreements or arrangements between actual or potential competitors that prevented or lessened competition substantially (or were likely to) in a market. This provision allowed the Commissioner of Competition (the Commissioner) to review collaborative agreements or arrangements between businesses that competed against each other for a product, including joint ventures and strategic alliances, to ensure competition was not harmed by these otherwise lawful agreements. 

Until the amendments, contravention of section 90.1 could only result in a prohibitive or prescriptive order made by the Competition Tribunal (Tribunal) requiring the competitors to stop any contravening activities. There were no fines, penalties or other financial consequences that could flow from a contravention, other than the costs associated with complying with such an order. 

The recent amendments change the scope of the provision significantly, to now capture anti-competitive agreements between non-competitors, including agreements no longer in effect. The new wording of the provision also allows the Tribunal to issue significant fines and allows private parties to pursue claims for compensation before the Tribunal resulting from contraventions of section 90.1.  

Expanded scope to capture agreements between non-competitors

Effective December 15, 2024, section 90.1 will be expanded to include agreements between non-competitors where a “significant purpose” of the agreement, or part of the agreement, is to harm competition and the agreement has the effect of preventing or lessening competition substantially. 

Previously, the definition of “competitor” used to be a limiting factor on the scope of section 90.1, requiring an agreement to be between competitors or potential competitors for a product (i.e., its applicability was limited to horizontal collaboration). While any competitive relationship between parties to an agreement or arrangement may still play a role in determining if an agreement substantially prevents or lessens competition in a market, the nuance resulting from this amendment is that an agreement is not automatically insulated where parties do not (potentially or actually) compete. 

This amendment seems directly connected to the federal government’s desire to expand the scope of civil enforcement under the Act, in particular to capture agreements between companies at different trade levels such as suppliers and retailers. For example, under the previous wording of section 90.1 of the Act, licensing and franchise agreements that could indirectly compromise the potential entry of a competitor were difficult to challenge because the parties to the agreement (franchisor and franchisee) were not competitors. Soon that will no longer be an impediment to challenging an agreement under the new wording of section 90.1.  

Ending problematic agreements no longer guarantees insulation 

Further amendments to the Act reword section 90.1 to permit examining past behaviour and whether an agreement or arrangement has prevented or lessened competition in a market (i.e., in the past). This amendment is seemingly designed to disincentivize businesses from “crossing the line until required to stop.”¹ The amendments do include a limitation period specifying no action can be taken on agreements that have been terminated for more than three years.

Previously, voluntary cessation of an agreement or arrangement that violated section 90.1 was sufficient. With the expansion to allow enforcement action for past anti-competitive effects, putting an end to problematic agreements or conduct may no longer be enough to insulate parties.

This amendment came into force with royal assent on June 20, 2024, meaning the Commissioner can pursue past conduct under this section immediately.

Significant fines for contravention 

Prior to the amendments, the Tribunal could not order administrative monetary penalties for violations of section 90.1 of the Act. The main remedy available to the Commissioner was to seek an order prohibiting the anti-competitive conduct. 

With the amendments, the Tribunal can impose potentially significant administrative monetary penalties not exceeding the greater of (i) $10 million ($15 million for subsequent orders) or (ii) three times the value of the benefit derived from the agreement or, if that cannot be reasonably determined, 3% of the worldwide gross revenues. 

When determining the amount of an administrative penalty, one of the aggravating or mitigating factors is the entity’s history of compliance with the Act. As a result, a history of non-compliance with the Act could result in significantly increased fines under the new wording of section 90.1. The Tribunal can also make orders for the divestiture of assets or shares that are reasonable and necessary to overcome the anti-competitive effects of the agreement.

These new enforcement measures significantly change the assessment in determining whether to enter into agreements that might contravene section 90.1. Prior to the amendments, the most likely consequence was an order stopping the problematic conduct. Now, the same conduct can have significant financial and business consequences for the parties.  

There is no delayed entry into force provision for introducing these additional penalties, meaning the Commissioner could take enforcement action and seek fines (via an application to the Tribunal) at any time. The amendments specify that the purpose of an order imposing a monetary penalty is to promote practices that conform with the purposes of section 90.1 of the Act, and not to punish the person receiving the fine. However, this does not prevent the Commissioner or private litigants from seeking significant fines at the outset of any enforcement action to obtain leverage.

Private parties can soon seek compensation  

In addition to potential fines and penalties, section 90.1 was also amended to allow private parties to seek damages from parties to certain anti-competitive arrangements. This new private right of action and entitlement to damages represents a significant question mark on the practical impact of the recent amendments.  

Effective June 20, 2025, private parties can seek leave from the Tribunal to bring an application under section 90.1. The test for leave will be relaxed to permit applications “in the public interest” or when “all or part” of the applicant’s business is affected. What constitutes “public interest” is not defined and unlikely to become clear until the Tribunal adjudicates its first cases under the new wording.  

Successful private applicants will be able to seek from the Tribunal an award of damages in an amount “not exceeding the value of the benefit derived from the conduct.” How this will be determined in practice will remain an open question until there is at least some case law on point. In making a damages order, the Tribunal will be permitted to specify any terms it considers necessary for the order’s implementation, including terms related to notifying potential claimants, specifying the time and manner for making a claim, specifying the eligibility of claimants, and specifying how unclaimed damages should be distributed.

Takeaways

In the wake of the expanded scope of section 90.1 of the Act, businesses should carefully consider existing and future agreements and arrangements with competitors and non-competitors, especially if the Commissioner, or private litigants, could argue that the effect of the agreements or conduct was anti-competitive. Businesses should also conduct regular risk assessments for current and proposed business practices and strategic plans considering the expanded scope for both public and private enforcement actions, as well as the newly added possibility of substantial fines for contravention of section 90.1. 

While the Bureau has announced its intention to consult Canadians as its guidelines are updated to account for amendments,² the timing or utility of any such guidance is unknown and in the interim, businesses face uncertainty over potential private and public enforcement under this broadened enforcement framework.