Navigating the new landscape: Competition Act amendments expand opportunities for private litigation

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, 2024. Our publication summarizing the amendments can be found here.

The amendments will significantly expand rights to bring private actions and seek damages under the Act in four distinct ways:

• Expanding the types of conduct for which private parties can apply to the Competition Tribunal (the Tribunal);
• Broadening what is considered “anticompetitive”;
• Lowering the threshold for private parties to obtain leave to apply to the Tribunal; and
• Increasing the availability of damages for private applications for reviewable trade practices.

While not directly related to the expansion of private actions, the recent amendments to the Act have increased the amount of the monetary penalties that can be awarded under several of the civil provisions to a maximum of 3% of gross worldwide revenues. The possibility of a significant fine being levied (in addition to any damages or corrective behavioural orders) may provide private litigants with significant leverage in threatening to bring competition law applications to achieve business outcomes or in settlement discussions.

Businesses must seriously consider their litigation exposure risk in light of the cumulative effect of these changes.

Expanding the scope of private enforcement

During the last round of substantive amendments to the Act in 2009, private parties gained the right to bring applications to the Tribunal to challenge refusals to deal, price maintenance, exclusive dealing, and tied selling. To obtain leave, applicants had to demonstrate that their businesses were “directly and substantially” affected by the alleged conduct, or simply “directly affected” for price maintenance allegations – fairly stringent thresholds that have resulted in only a handful of private applications being brought before the Tribunal over the past 15 years. Further, the only remedy was an order prohibiting the conduct at issue.

In mid-2022, private parties gained the right to seek leave to bring applications for abuse of dominance to the Tribunal.¹

Recent amendments to the Act will allow private parties to seek leave to bring applications to the Tribunal to challenge civil anticompetitive agreements and civil deceptive marketing. These amendments will also allow private parties to seek damages. These changes have a delayed coming into force date of June 20, 2025 – giving businesses a brief window to assess their current practices and risk exposure.

Broadening of conduct considered anticompetitive

The amendments broaden the types of conduct that may be considered anticompetitive and subject to review:

• Abuse of Dominance: Under the restructured legal test, the Tribunal may make an order against a dominant firm or group if its conduct meets either the anticompetitive intent or effect requirement. The amendments also add the practice of “directly or indirectly imposing excessive and unfair selling prices” to the non-exhaustive list of anticompetitive acts at s. 78.²
• Civil Collaborations: The amendments expand the scope of section 90.1 to apply to agreements that are not between competitors (i.e. joint ventures and strategic alliances) if it can be shown that 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.³ The amendments also repealed the efficiency defence for civil collaborations.⁴
• Civil Deceptive Marketing: The amendments add new provisions relating to drip pricing, product-specific greenwashing claims and a broader provision targeting environmental representations, including “net-zero” type claims.⁵

The Tribunal now has jurisdiction to review and sanction conduct that was previously unreviewable, and when viewed together with the expansion of private applications for the same conduct, businesses are at risk of both enhanced public and private enforcement against conduct that was previously immune.

Lowering the threshold for leave to apply to the Tribunal

The amendments lower the threshold for private parties to obtain leave to challenge civilly reviewable conduct in two ways:

• Part of Their Business: Private parties can now seek leave to challenge civilly reviewable conduct even if it affects only part of their business. Previously, the leave test was stricter, as it would only be granted where the applicant’s business was “directly and substantially” affected by the challenged conduct, which the Tribunal held to mean an impact on the whole of the business.
• Public Interest: Leave can now also be granted if the Tribunal believes it is in the public interest to do so (although there is no guidance as to what is considered in the public interest).

Businesses have some breathing room in terms of considering the potential exposure to private claims, as the amendments to the leave test have a delayed coming into force date of June 20, 2025.

However, businesses will need consider the impact of the substantive changes on their activities, as the majority of these are now in force, and the Commissioner of Competition can begin to take enforcement action where he believes there has been a contravention of these new provisions.

In addition to the increased prospect of strategic claims being brought by competitors and customers, it is also likely NGOs and other public interest organizations will be incentivized to bring applications on behalf of a class of affected individuals or businesses once the lower leave threshold and damages provisions are in force, particularly as damages would be payable to individuals harmed by the conduct (including those who are not parties to the application). Such applications may result in class action-like applications being brought before the Tribunal in the absence of procedural safeguards found in class proceedings legislation.

Available soon: damages for reviewable trade practices and collaborations that prevent or lessen competition

Private parties have historically been able to seek leave from the Tribunal to make an application under the Act’s civilly reviewable restricted trade practices provisions. But, successful litigants were barred from recovering damages (beyond their legal costs).

As of June 20, 2025, private parties can seek damages for this conduct, as well as for anticompetitive collaborations under section 90.1, up to the amount of the benefit derived from the conduct that is the subject of the order, to be distributed among the applicant and any other affected person at the Tribunal’s discretion. The Tribunal is also empowered to impose any necessary related terms on a private damages award.

The quantum of private damages in these cases will focus on the benefit to the actor, rather than the damages suffered by those allegedly harmed by the conduct at issue. This could result in damages awards exceeding the alleged losses.

In addition to damages, penalties available for private applications include temporary orders, interim injunctions, prohibition orders, restitution orders, and administrative monetary penalties (payable to the government).

Private applications can also be resolved by consent agreements that can be entered into and filed with the Tribunal. The interplay between these outcomes has yet to be seen in practice. However, the possibility of a significant monetary penalty being imposed by the Tribunal does seem to open the door to potentially vexatious litigation and may pose challenges in terms of negotiating settlements with private litigants.

Restitutionary damages for civil deceptive marketing

The Tribunal has long been able to order a restitutionary remedy for breach of the general prohibition against false and misleading representations (section 74.01(1)(a)) that requires payment to those affected by the conduct of an amount “not exceeding the total of the amounts paid to [the wrongdoer] for the products in respect of which the conduct was engaged in.”

The proposed amendments simply open this door further by allowing private litigants to bring applications for these damages, rather than relying on the Commissioner of Competition who previously had the sole right to bring applications for contravening this provision.

While there is some debate, the general consensus is that, while the wider range of remedies (including administrative monetary penalties and prohibition orders) applies to the broader list of marketing-related conduct (for example, drip pricing), the provision providing for restitution is specifically narrowed to the general prohibition against misleading advertising, and may not apply to the majority of the deceptive marketing practices listed in the Act. However, it is likely private applicants will bring claims under the new anti-greenwashing provisions and this general provision at the same time.

Takeaways

The transformative nature of these amendments requires businesses to re-assess their compliance and risks under the Act. Businesses with strong market positions should pay particular attention to how these amendments will impact their businesses, including the increased litigation risk that may result from expanded private rights of action for damages for civilly reviewable matters. In addition, all companies should assess their past, present and future environmental claims.

Our expectation is that private litigation will increase, as the enhanced statutory rights of action, ability to collect damages and lowered leave threshold converge with the broader definition of what conduct is considered anticompetitive. Moreover, the possibility of class action-type private applications under the Act is another tool in claimants’ toolboxes for leverage in litigation and settlement discussions. Until there is Competition Bureau guidance and a body of case law, companies will have to manage their legal exposure by assessing how the significant changes to the Act apply to their business activities.