On January 10, 2022, the Canadian Competition Bureau (the Bureau) and Health Canada’s Health Products and Food Branch (the HPFB) issued a  to stakeholders on their continued collaboration to support Canadians’ access to safe, effective, and affordable pharmaceuticals and biologics.

Although the Bureau and HPFB are independent entities, they have complementary mandates in the pharmaceutical sector. The Bureau is responsible for administering and enforcing the Competition Act, which includes addressing competition issues for the pharmaceutical industry. While the HPFB regulates, evaluates, and monitors therapeutic products available in Canada under the Food and Drugs Act. This overlap has led to past collaboration on several issues, including mergers and acquisitions, deceptive and misleading claims, and claims of abuse of dominance.

As part of their goal for continued collaboration, both entities plan to maintain a channel of communication to ensure the mutual success of their policy objectives. This includes having the Bureau report to the HPFB on aspects of the pharmaceutical regulatory framework that may impact competition, and the HPFB providing feedback to the Bureau when competition-related issues may result in problems for access to medicines.

The Bureau and HPFB have also committed to working together on Bureau-led enforcement actions, such as when generic pharmaceutical companies report having difficulty obtaining reference samples from branded drug manufacturers. These samples are necessary for generic companies to perform testing for regulatory approval and any difficulties in obtaining samples would delay market launch, with corresponding impact on drug availability. Both the Bureau and HPFB have released guidance for providing access to reference samples and plan to continue working together to monitor and address issues in this area. Based on the extent of guidance documents made available from both entities, branded drug manufacturers are advised to anticipate that the Bureau will treat any explanation for delay in supplying reference products with a high degree of skepticism.

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The Bureau recently that Phase 2 of the IPEGs update could address anti-competitive activity surrounding standard essential patents (SEPs). SEPs are patents that are considered essential to implement an industry standard and are common within the technology industry. The European Commission (EC) that competition concerns arise from SEP holders gaining market power once a standard has been adopted by competing rivals. This makes ensuring fair, reasonable and non-discriminatory (FRAND) licensing commitments particularly important. Google/Motorola and Apple’s recent SEP litigation coupled with the corresponding enforcement by the EC and the United States Federal Trade Commission (FTC) raises questions as to how the Bureau will position the pendulum toward SEP activity.

The Competition Bureau’s Current Approach to Anti-Competitive SEP Activity

While not directly addressed, the Bureau’s note one example in which the Bureau would target anti-competitive SEP activity through of the Competition Act. Section 32 allows the Federal Court, on the advice of the Attorney General, to issue an order that remedies an anti-competitive act occurring from the mere use of an IP right. The IPEGs imply that the Bureau must first establish that the SEP holder dominates the relevant market and that refusing to licence the SEP prevents other firms from effectively competing in the relevant market. Second, the Bureau must establish that invoking section 32 against the SEP holder would not adversely affect the incentives to invest in research and development.

Section 32’s procedurally cumbersome requirements partially explain why it hasn’t been used for decades. The section requires the Attorney General to apply to the Federal Court. The Commissioner is also required to meet the “undue lessening” standard that was from other Competition Act provisions due to its outdated language.

Potential New Approaches to Target Anti-Competitive SEP Activity

The Bureau might characterize anti-competitive SEP activity as an abuse of dominance. The EC recently that Motorola’s efforts to seek injunctive relief against Apple’s use of a smartphone SEP constituted an illegal abuse of dominance pursuant to . The Bureau could argue that similar conduct is an abuse of dominance under of the Competition Act. However, unlike Article 102, explicitly exempts “an act engaged in pursuant only to the exercise of any right…under the…Patent Act”. The Competition Tribunal held in that the refusal to licence an IP right falls under the section 79(5) exemption. Therefore, the Bureau might refrain from characterizing the activity as an abuse of dominance unless it argued that the SEP holder’s breach of its FRAND commitments was something more than a mere refusal to licence.

The Bureau might instead choose to characterize anti-competitive SEP activity as an unfair trade practice. The United States FTC recently Google/Motorola’s FRAND commitment breach through of the FTC Act, which prohibits unfair deceptive acts involving commerce. There currently does not seem to be a provision in the Competition Act synonymous with section 5 of the FTC Act. The Bureau could instead argue that such conduct constitutes an illegal refusal to deal pursuant to of the Competition Act, which might allow the Tribunal to order the supplier of a product (the SEP) to sell to a party within usual trade terms (the FRAND commitment). However, the Tribunal held in that the term “product” in section 75 was not intended for licences of intellectual property, making it much less likely that the Bureau could use section 75 to target breaches of FRAND commitments.

Finally, a uniquely Canadian solution would entail amending section 32’s procedural obstacles outlined above to target SEP activity. Amending these obstacles, which is  by the former head of the Bureau, could improve the provision’s functionality while ensuring common ground with the EC and FTC’s competitive analyses by preserving the IPEGs’ mandated balancing of competitive effects. Overall, the Bureau has some significant provisions with which to target SEP activity. Whichever route they take, however, evidence suggests that the pendulum will continue moving toward antitrust enforcement.


Peter Neufeld is a JD Candidate at Osgoode Hall Law School and is enrolled in Osgoode’s Intellectual Property Law Intensive Program. As part of the program requirements, students were asked to write a blog on a topic of their choice.

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Following the bid, campaigns such as and have been created with the purpose of informing the public about the potential consequences of such an acquisition and to persuade the government, the Canadian Radio-television Telecommunications Commission (CRTC), and the Competition Bureau that such a move by BCE should be blocked in order to protect consumers across the country. While there is some doubt as to whether steps being taken by BCE’s competitors are being done with consumer rights as the main motivator, important issues have been raised by both sides concerning the potential deal. From September 10^th – 14^th, 2012, the CRTC heard arguments from all parties involved at a and will be presenting their decision in the near future; a decision that could have heavy implications on consumer access to media in Canada, regardless of what is chosen.

According to OpenMedia.ca – the group behind Stop the Takeover – , with Bell, Shaw, Rogers, and Quebecor contributing the overwhelming majority of cable/satellite transmissions as well as raking in the majority of revenues for wireless and internet services. The CRTC has placed limits on the English and French content any one company can control – 35% in the case of English content. With the acquisition of Astral, Bell states that it would own 33.5%, just under this threshold. However, rival and the . Much of the arguments presented at the hearing concerned these figures as well as the impact the Astral deal could have on the Canadian consumer.

During the CRTC hearing on the matter, George Cope – CEO of BCE – , “Canada should not have to wait any longer to deploy a viable, national multi-platform solution, backed by a company with the resources to compete against well-funded global competitors.” Without the content that Astral Media owns, Bell fears that it will not be able to stand up to the likes of Netflix and other companies that have been using updated business models (other than the expensive subscription fee that cable TV is well-known for) in order to attract new customers. However, executives at competing Canadian companies don’t believe this argument. Ken Engelhart, a Senior VP at Rogers (another company against the purchase) that a number of cable companies in Canada and the US have launched their own services to compete with Netflix and this makes Bell’s situation no different than that of any other.

One of the issues with the Astral bid that could affect consumers is the possibility that Bell could leverage its new-found position to unfairly overcharge other cable companies that want to broadcast Bell-owned programming. Such increases would then be passed off to consumers, resulting in higher prices and less options for Canadians – one of the issues with having content and distribution controlled by the same company. and have both cited times where Bell has exhibited this type of behaviour, and there is potential for future dealings to follow a similar pattern if the Astral deal is allowed to go forward. In addition, unnecessary duplication of positions between the two companies will mean within the sector.

The government of Canada and the Competition Bureau both have the ability to veto the purchase, whether or not the CRTC does so. However, are unsure as to whether either of those bodies will step in. Making matters more uncertain is the by the Harper government of Jean-Pierre Blais as the CRTC chair. in order to provide Canadian consumers with better accessibility to content and services (a change from the previous objectives under previous chair Konrad von Finckenstein), the decision on this case may probe deeper into the Commission’s motivations.

Adam Del Gobbo is a JD Candidate at Osgoode Hall Law School.

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