Canada’s Amazon Test: Encouraging Competition or Undermining It?

Parliament’s 2023 reforms to the Competition Act made it easier for the Competition Bureau to challenge supposedly dominant firms, giving it greater latitude to intervene when it suspects they are engaging in anticompetitive conduct. The Bureau’s investigation into Amazon’s Marketplace Fair Pricing Policy is the first major test of that new flexibility. What’s at stake isn’t Amazon’s size but whether the pricing rules raise prices for Canadians. The short answer is: They don’t.

The Competition Bureau is investigating whether Amazon’s Marketplace Fair Pricing Policy, which (among other things) can restrict placement for third-party sellers who list products on Amazon.ca at higher prices than on other Canadian sites, and in turn, allegedly allows Amazon to restrict rival marketplaces, raise seller fees, and weaken price competition across online retail. The inquiry closely parallels the U.S. Federal Trade Commission’s ongoing antitrust case, which alleges that Amazon maintained monopoly power through “anti-discounting” rules similar to Amazon Canada’s pricing policy. ITIF has questioned that theory, noting it rests on uncertain economic assumptions and thin evidence of consumer harm.

While the claims are similar, Canada’s new competition rules give the Bureau greater flexibility to act against conduct that it believes has “adverse effects on competition,” even when intent or consumer harm is difficult to prove. The 2023 reforms allow the Competition Tribunal to issue orders where a dominant firm’s conduct shows either anticompetitive intent or effect, rather than requiring both, and replace the older “substantial lessening of competition” effects test with the broader “adverse effect” standard, enabling earlier intervention without necessarily needing concrete evidence of consumer harm.

By contrast, under the U.S. Sherman Act, the U.S. Federal Trade Commission must show both monopoly power (a higher standard than dominance) and consumer harm, typically through higher prices, reduced output, or lower quality. The evidentiary bar for proving illegality is therefore far higher than under Canada’s new framework. That difference could matter: If Canada can move forward on evidence that falls significantly short of what the U.S. Federal Trade Commission must prove, this case could set an early benchmark for how aggressively the Bureau uses its expanded mandate in digital markets. Some observers worry this shift could tilt Canada’s enforcement approach closer to Europe’s, where competition law often focuses on protecting competitors rather than directly improving consumer outcomes.

Even under the new lower threshold, the Bureau’s case likely faces a basic analytical problem.It defines the market narrowly as the “supply of online marketplace services” to third-party sellers, treating Amazon as an infrastructure provider rather than a two-sided platform connecting sellers and consumers. That framing isolates one side of the market while ignoring the network effects that make platforms competitive in the first place. The marketplace’s value to sellers depends on how many consumers shop there, and its value to consumers depends on how many sellers offer low prices. Any assessment of dominance or harm should consider both sides together, not just one side in isolation. If the Bureau does the latter, it risks missing the very feedback loop that makes platforms work for consumers and sellers alike.

Even if one just focuses on the supply side, the Bureau is missing the competitive dynamics that actually discipline Amazon’s behaviour. Sellers have multiple alternatives, like independent Shopify stores, specialized platforms like Newegg or SSENSE, rival marketplaces like eBay and Well.ca, or brick-and-mortar retailers with online operations such as Walmart and Canadian Tire. Indeed, consumers continue to value in-person shopping: 61 percent of Canadians still make most purchases in physical stores, showing that online marketplaces are only one part of a broader retail ecosystem.

The second issue is conduct. The Bureau is asking whether Amazon’s rule—which places limits on sellers who charge higher prices on Amazon than elsewhere—is anti-competitive. That is a hard case to make. Price-parity rules can, in theory, blunt discounting or slow new entrants, which could reflect coordinated pricing or exclusion, neither of which is likely to be proven here. Specifically, the inquiry treats Amazon’s Fair Pricing Policy as a platform-wide issue rather than a market-specific one. Yet Amazon sells millions of items across nearly every retail category. Demonstrating that its policy has raised prices or blocked rivals across the board will be a high bar to clear. Without clear evidence of consumer harm, the case risks becoming less about conduct and more about scale.

In practice, Amazon’s policy also has pro-competitive benefits. Rather than harm competition, the Fair Pricing Policy reflect standard retail practice that even predates e-commerce. Retailers regularly require suppliers not to undercut them in other channels. The purpose is straightforward: Protect the retailer’s reputation for price competitiveness and predictability. Moreover, it is difficult to see how a policy designed to prevent mark-ups could leave Canadians paying more. Amazon’s policy keeps prices lower, not higher, on its platform. Interpreting that as price inflation risks punishing a policy that delivers exactly what competition is supposed to achieve—lower prices for consumers. A rule that prevents overpricing may frustrate rivals, but that frustration is not the same as harm to competition. In fact, lower prices attract more consumers, which in turn attract more sellers: a feedback loop that reflects competition on the merits.

The Amazon case will test how Canada’s new competition law handles big digital platforms. The Bureau should only challenge Amazon’s price-parity rule if it has genuinely harmed Canadian consumers by raising prices or eliminating choice. Amazon’s practices may upset some sellers, but they keep prices consistent and low for consumers. Focusing only on sellers risks missing how competition actually works on platforms like Amazon, where lower prices and more buyers on one side attract more sellers on the other. The outcome of this investigation will say less about Amazon than about whether Canada intends to use its new competition tools to target successful digital platforms for the very practices that define retail competition on the merits.