On July 24, 2014, the Supreme Court of Canada refused to grant
leave to appeal the Federal Court of Appeal's February 2014
decision regarding the Commissioner of Competition's abuse of
dominance allegations against the Toronto Real Estate Board (TREB).
The February 2014 decision of the Federal Court of
Appeal overturned the original decision of the Competition
Tribunal (dismissing the Commissioner's allegations against
TREB) and referred the case back for a re-hearing before the
Tribunal.
While the merits of the TREB case will now be decided by the
Tribunal after a re-hearing, the Supreme Court of Canada's
decision to deny leave means that the Federal Court of Appeal's
decision in TREB is, for now, the most recent guidance on the type
of conduct that may be pursued under the Competition Act's
abuse of dominance provisions.
The Federal Court of Appeal concluded that the abuse of dominance
provisions can apply to conduct that impacts a market in which the
dominant entity does not itself compete. Applying this approach to
the specific fact scenario in the TREB case, the Court of Appeal
determined that the abuse of dominance provisions could apply to
conduct by TREB impacting the market for residential real estate
brokerage services, a market in which TREB (a trade association of
realtors) does not itself compete.
In practical terms, the Federal Court of Appeal's decision in
the TREB case has the potential to expand the scope of conduct that
may be pursued under the abuse of dominance provisions. Pending
further guidance, a company that may be considered dominant (under
the Commissioner's guidelines, dominance generally requires a
market share of at least 35%) may be wise to consider whether
proposed conduct could give rise to anti-competitive effects in any
related market (for instance, upstream or downstream
markets).
While it is difficult to anticipate all the circumstances or
markets in which such effects might arise, an illustrative example
of this broader approach to abuse of dominance may be found in a
recent decision in the United Kingdom where an airport authority
was found to have abused its dominant position by restricting the
number of bus routes serving the airport, thereby lessening
competition for local bus transportation — a market in which
the airport authority did not compete.1
Footnote
1.Arriva The Shires Ltd. v London Luton Airport
Operations Ltd., [2014] EWHC 64 (Ch), available at: http://www.bailii.org/ew/cases/EWHC/Ch/2014/64.html
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