Abuse of Dominance and Competitor Losses

The ‘Benefit Derived’ Regime is not Fit for Purpose

Abstract

As part of the amendments to the Competition Act enacted in June 2024, Parliament created a right for affected private parties to seek monetary compensation for abuses of dominant position. The new private compensation regime is centered around the concept of the “benefit derived” by the dominant firm from its anticompetitive conduct. This language frames compensation around a concept of disgorgement, as opposed to a concept of awarding damages for losses suffered by affected parties. The creation of a disgorgement-style remedy will pose a number of challenges for both private parties and the Competition Tribunal. This paper traces the history of the new compensation provision. It then identifies some of the challenges created by the legislative language, particularly for competitors that have been affected by anticompetitive conduct, and explains how these challenges would be addressed by implementing a damages-based regime, or failing such amendment, through a broad and remedial interpretation of the “benefit derived.”