competition policy

Competition policy is a set of policies and regulations that affect how various markets in the private sector and provide rules for investors and companies to protect the public interest. Generally, competition policy seeks to ensure that
  1. companies do not collude to fix prices or restrict consumer choice.
  2. companies do not engage in anti-competitive activities (unfair competition).

In Canada, competition regulator is the Competition Bureau

The types of anti-competitive activities investigated by the Bureau include:

  • Price fixing: When competitors agree on the prices that they will charge their customers.
  • Bid-rigging: When, in response to a call or request for bids or tenders, one or more bidders agree not to submit a bid, or two or more bidders agree to submit bids that have been prearranged among themselves.
  • False or misleading representations: When materially false or misleading representations are made knowingly or recklessly to the public.
  • Deceptive notice of winning a prize: When a notice, sent by any means, gives a recipient the impression of winning a prize and requires the recipient to incur a cost to obtain the prize.
  • Abuse of dominant position: When a dominant firm engages in anti-competitive practices that substantially lessen competition in a market, or are likely to do so.
  • Exclusive Dealing, Tied Selling and Market Restrictions: When a supplier requires or induces a customer to deal only, or mostly, in certain products; requires or induces a customer to buy a second product as a condition of supplying a particular product; requires a customer to sell specified products in a defined market.
  • Refusal to deal: When someone is substantially affected in his or her business, or is unable to carry on business, because of the inability to obtain adequate supplies of a product on usual trade terms.
  • Mergers: When all or part of one business is acquired by another. The Bureau has the authority to review any merger, regardless of its size. However, the Bureau must be notified in advance of proposed transactions when the value of the assets or the target firm exceeds $50 million or the value of the amalgamated company exceeds $70 million, and when the combined dollar value of the parties and their respective affiliates exceeds $400 million.
  • Multi-level Marketing Plans and Schemes of Pyramid Selling: Multi-level marketing, when it operates within the limits set by the Competition Act, is a legal business activity, while a scheme of pyramid selling is illegal as defined by the law.
  • Deceptive Telemarketing: When a product's representation is false or misleading while promoting the supply of a product or a business interest during person-to-person telephone calls.
  • Deceptive marketing practices: When a product is advertised at a bargain price and is not supplied in reasonable quantities; when a product is supplied at a price above the advertised price; when retailers make "regular price" claims without selling a substantial volume of the product, or offering the product, at that price or a higher price in good faith for a substantial period of time; or when a contest, lottery, or game of chance or skill is conducted without making adequate and fair disclosure of facts that affect the chances of winning.

related issues: consumer protection, environmental policy, product safety, CRTC, private sector, regulation industrial policy


Competition Bureau