Competition Bureau Scores Big Win Against Google in Online Advertising Challenge
Judge rejects search company's arguments that potential financial penalties would represent a violation of its constitutional rights
The Competition Bureau has scored a significant victory against Google, with a judge striking down an attempt by the company to scuttle the enforcement agency’s challenge of its dominance of the online advertising market in Canada.
In a ruling released Wednesday, Justice Andrew Little of the Competition Tribunal rejected Google’s arguments that the Bureau’s case would violate its constitutional rights. The company had argued that the potential financial penalty stemming from the case could exceed a “shocking, gargantuan” $90 billion, which would qualify it as a “true penal consequence” and therefore a criminal offence that would bring the Charter of Rights and Freedoms into play.
In Canadian law, a “true penal consequence” refers to severe state-imposed penalties that activate section 11 rights under the Charter for the accused, which include the right to a fair trial. Consequences that trigger the rights can include imprisonment and in some cases substantial fines intended to punish or deter the accused rather than to merely regulate behaviour.
With the potential outcome supposedly making the challenge criminal under the Charter rather than a civil proceeding governed by the Competition Act, Google argued that much of the evidence it has presented so far – since the case began in November, 2024 – should be excluded and stricken from the record.
Justice Little, however, agreed with the Bureau’s counter-arguments – that the potential administrative monetary penalties (AMPs) are intended to bring violators into conformity with competition laws rather than to “redress a wrong done to society at large.”
Though he conceded that any possible AMP could indeed be “very large” and that Google could ultimately be exposed to a significant penalty, the Bureau’s charges under the Competition Act are intended to get the company to cease its alleged abuses of dominance rather than to punish it for its behaviour.
The company’s estimate of $90 billion or more is therefore premature and “hypothetical at best,” he said, thus clearing the way for the case to proceed.
The Competition Bureau cheered the ruling by the Tribunal, an adjudicative body comprised of federal judges and lay members.
“The Tribunal’s decision reinforces its clear authority to order administrative monetary penalties to promote compliance and deter anti-competitive behaviour,” said acting Competition Commissioner Jeanne Pratt in a statement.
“We continue to stand by our investigative findings that, through its anti-competitive conduct, Google has been able to entrench its dominance, prevent rivals from competing, inhibit innovation, inflate advertising costs and reduce publishers’ revenues. The final decision in this matter, including any penalties, rests with the Competition Tribunal.”
Google did not return a request for comment.
The Canadian Anti-Monopoly Project also welcomed the decision.
“Today’s ruling is an important signal that new powers under Canada’s recently strengthened Competition Act are here to stay,” said executive director Keldon Bester in a statement.
“Financial penalties will always be secondary to structural remedies that promote competition, but they remain an important tool for deterring conduct that harms competition. While we wait for the full case to go to trial, the Tribunal’s decision is a welcome affirmation of a stronger defence of competition in Canada.”
Despite Wednesday’s ruling, Google has dodged several significant bullets in recent months.
The Tribunal in January rejected a separate challenge of the company’s dominance in search by a Toronto-based independent game developer under new laws that allow private parties – and not just the Bureau – to bring abuse-of-dominance cases against large companies.
In September, Google also avoided serious repercussions – including potential forced spin-offs of parts of its business or even a breakup – in a U.S. antitrust case despite being found guilty of being a monopoly, though the Department of Justice is now appealing the court’s ruling.
Read the Competition Tribunal’s judgment here.