Duhaime's Law Dictionary


Abuse of Dominant Position Definition:

Intentional anti-competitive acts by persons substantially in control of a market, that has had, is having, or is likely to have the effect of preventing or lessening competition.

Related Terms: Predatory Pricing, Exclusive Dealing, Vertical Restraint, Abuse, Delivered Pricing

Canada's Competition Act defines an anti-competitive act but in the header to §78, describes it as abuse of dominant position and includes:

"... use of fighting brands introduced selectively on a temporary basis to discipline or eliminate a competitor; pre-emption of scarce facilities or resources required by a competitor for the operation of a business, with the object of withholding the facilities or resources from a market; buying up of products to prevent the erosion of existing price levels; adoption of product specifications that are incompatible with products produced by any other person and are designed to prevent his entry into, or to eliminate him from, a market; requiring or inducing a supplier to sell only or primarily to certain customers, or to refrain from selling to a competitor, with the object of preventing a competitor’s entry into, or expansion in, a market; and selling articles at a price lower than the acquisition cost for the purpose of disciplining or eliminating a competitor. "

In Canada v NutraSweet, the Competition Tribunal held:

"This list of anti-competitive acts is clearly not meant to be exhaustive and the respondent admits that other conduct not specifically mentioned in section 78 can constitute an anti-competitive act. A number of the acts share common features but, as recognized by the Director and the respondent, only one feature is common to all: an anti-competitive act must be performed for a purpose, and evidence of this purpose is a necessary ingredient. The purpose common to all acts, save that found in paragraph 78(f) (buying up of products to prevent the erosion of existing price levels), is an intended negative effect on a competitor that is predatory, exclusionary or disciplinary."

In Canada (Commissioner of Competition) v. Air Canada, Canada's Competition Tribunal held that many (but not all) odf the acts lsted in the statyute require evidence of:

"... an object, design or intent to engage in an exclusionary conduct that is having the effect of augmenting, entrenching or extending market power."

To defer to the Canadian policy on the issue, a market share would be dominant if the target company has or controls over 35% of that market.1

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