Competition Bureau

News & Resources > Public comments > Draft - Information Bulletin on the Abuse of Dominance Provisions as applied to the Telecommunications Industry > V. Substantial Lessening or Prevention of Competition

Draft - Information Bulletin on the Abuse of Dominance Provisions as applied to the Telecommunications Industry: Part 5 - Substantial Lessening or Prevention of Competition

Subsection 79(1) requires that “the practice [of anti-competitive acts] has had, is having, or is likely to have the effect of preventing or lessening competition substantially in a market.”  The focus of the inquiry at this stage is on the impact of the practice in question on competition, not on competitors.  The Bureau analyzes a potential substantial lessening or prevention of competition using a “but for” test: “but for” the practice in question, would there be substantially greater competition in the relevant market, in the past, present, or future?^[61] The Tribunal has agreed that a relative assessment of whether the relevant markets would be substantially more competitive in the absence of the impugned practice, rather than an absolute assessment of whether the prevailing level of competition is sufficient, is required.^[62]

More specifically, a substantial lessening or prevention of competition is an effect that significantly preserves or enhances barriers to entry and/or expansion. In examining whether barriers to entry are preserved or enhanced the Bureau will focus on whether the practice in question has materially altered the prospects or feasibility of entry, such as whether, “but for” the practice in question, an effective competitor or group of competitors could have emerged within a reasonable period of time to challenge the market power of the firm responsible for that practice.^[63]

There are a variety of other considerations in determining whether or not there has been a substantial lessening or prevention of competition, such as whether or not consumer prices might be significantly lower, or product quality, innovation, or choice significantly greater, in the absence of the practice. 

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[61] This test was endorsed by the Federal Court of Appeal. Canada Pipe, supra note 10 at para. 38.

[62] Laidlaw, supra note 16 at 346.

[63] In the Bureau's analysis, a period of two years would be “reasonable”.