Nipped in the Bud: Applying Abuse of Dominance to Facebook’s Nascent Competitor Acquisitions

Abstract

Nascent competitor acquisitions in digital industries pose a unique threat to competition, but it can be challenging to determine whether any one such acquisition will harm competition in the market. Thanks to recent changes to the Competition Act, nascent competitor acquisitions can likely be challenged under abuse of dominance in some circumstances. Abuse of dominance may have advantages over merger review, because the Commissioner would be able to retrospectively analyze the anti-competitive impact of nascent competitor acquisitions and draw from a more flexible set of remedies to address those effects. Applying the Canadian abuse of dominance doctrine to the allegations in the American FTC v Facebook case demonstrates the benefits and drawbacks of this approach.