Competition Bureau completes investigation of alleged anticompetitive behaviour in Canada’s agricultural sector
March 15, 2022 – GATINEAU, QC – Competition Bureau
Today, the Competition Bureau announced that it has closed an investigation into allegations of anticompetitive behaviour related to the supply of crop inputs (such as seeds, fertilizer and crop protection products) in western Canada.
The Bureau examined allegations that a number of manufacturers and wholesalers disadvantaged, restricted, or blocked the supply of crop inputs to Farmers Business Network Canada Inc. (FBN).
The investigation focused on determining:
- if an agreement or arrangement against FBN existed between any of the targets of the investigation;
- if any of the targets abused a dominant position by acting with negative intent to exclude FBN from the market; and
- if any of the alleged conduct had or would likely, as a result, have substantially prevented or lessened competition.
Following a careful review of the evidence, the Bureau determined that the evidence does not sufficiently demonstrate that an agreement exists between competitors in relation to FBN.
Nonetheless, the evidence does suggest that certain market participants communicated with the goal of influencing suppliers with respect to FBN. The Bureau views these communications – which took place in a highly concentrated sector – to be a significant concern. Firms should be aware that similar communications could create agreements that contravene the civil or criminal conspiracy provisions of the Competition Act depending on their terms.
The Bureau also focused on the conduct of the targets that it believes are most likely to hold dominant market positions under the Act. At this time, the evidence does not clearly demonstrate that their conduct resulted in a substantial lessening or prevention of competition – which is a requirement for behaviour to form an abuse of dominance.
Having carefully considered the full body of evidence, the Bureau does not intend to pursue its investigation. A complete position statement summarizing the Bureau’s findings and the reasons for ending this investigation is available on its website.
The Bureau will continue to closely monitor the crop input industry for any anticompetitive conduct that seeks to restrict new entrants and has the potential to substantially lessen or prevent competition. Should new evidence come to light, the Bureau will take action.
Agriculture is a critical part of the Canadian economy. Protecting competition and innovation remains as important in this industry as in emerging sectors – particularly digital innovation that may provide disruptive competitive threats to established incumbents.
The Bureau opened a formal inquiry into the allegations in October 2019. On February 11, 2020, the Bureau obtained court orders requiring the targets and their affiliates to produce records and information relevant to its investigation.
FBN, which entered Canada in November 2017, is the wholly owned Canadian subsidiary of Farmers Business Network Inc., a United States based company founded in 2014. It operates a digital agriculture platform which gives farmers access to a variety of data-related services.
An agreement or arrangement among competitors may be prohibited under the civil provisions of the Competition Act when it exists or is proposed between persons, two or more of whom are competitors, with the result that competition has been or is likely to be prevented or lessened substantially in a market.
Abuse of dominance occurs when a dominant firm (or group of firms) in a market engages in a practice of anticompetitive acts, with the result that competition has been or is likely to be prevented or lessened substantially.
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The Competition Bureau is an independent law enforcement agency that protects and promotes competition for the benefit of Canadian consumers and businesses. Competition drives lower prices and innovation while fueling economic growth.
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