Appellate court said commissioner failed to justify its request for the company’s transaction data
The Federal Court of Appeal has rejected the Commissioner of Competition’s request to access transaction data related to certain Amazon.ca products, affirming a lower court’s finding that the commissioner had failed to adequately justify the broad scope of the request.
The commissioner is currently investigating whether Amazon.ca allows fake reviews purchased by vendors to remain on its website, arguing that such a practice could potentially violate the Competition Act’s ban on deceptive marketing practices.
According to the lower court, not knowing the scope of the commissioner’s data request made it impossible to determine whether the request met the standard outlined in two federal court decisions from 2014 and 2015, Canada (Commissioner of Competition) v. Pearson Canada Inc. and Canada (Commissioner of Competition) v. Bell Mobility Inc. The so-called Pearson/Bell Mobility standard requires courts to strike a balance between what the commissioner needs to conduct an investigation on the one hand, and the burden that an information request would likely impose on respondents on the other.
“When the application judge’s reasons are read as a whole, the decisive factors in the exercise of his discretion were uncertainty about the scope of the data request and a concern that the request was excessive to what the commissioner reasonably needed for the inquiry,” the FCA said in its decision Friday, Canada (Commissioner of Competition) v. Amazon.com.ca, ULC.
In a statement on Monday, Amazon spokesperson Julie Lawless said the company agreed with the FCA’s decision and is working with the Competition Bureau “to share more about Amazon’s longstanding commitment to fighting fake or improperly incentivized reviews, both in Canada and globally.
“Amazon has invested significant resources to proactively stop incentivized reviews using machine-learning models, expert investigators, and legal action, among other tools,” Lawless added. “Understanding that fake reviews are a global issue affecting different industries, Amazon has long welcomed greater collaboration across the private and public sector to protect customers from bad actors.”
Marianne Blondin, a spokesperson for the Competition Bureau, meanwhile, told Canadian Lawyer that the bureau was disappointed with the FCA’s conclusions.
“We will take time to carefully review the ruling and assess our next steps,” Blondin said. “The additional data requested would have supported the bureau’s investigation into whether Amazon’s marketing practices raise concerns under the deceptive marketing provisions of the Competition Act.”
Blondin added that the bureau’s investigation into Amazon’s marketing practices is ongoing.
The case dates back to April 2024, when the commissioner informed Amazon that he planned to seek a Federal Court order to compel data from the company under s. 11 of the Competition Act. S. 11 allows courts to order an individual to produce information relevant to Competition Bureau inquiries, once they have determined that the individual has or likely has that information.
The commissioner wanted several buckets of information, including transaction data for products Amazon sold in Canada across the following categories: health and personal care, home and kitchen, tools and home improvement, and electronics. However, counsel for Amazon pushed back against the commissioner, arguing that his request was too broad and that the four categories covered billions of products.
The Federal Court rejected the commissioner’s request because it did not have enough information to conduct a Pearson/Bell Mobility analysis. The commissioner appealed the ruling, arguing that the Federal Court erred by relying on the Pearson and Bell Mobility cases. According to the commissioner, the “excessive, disproportionate and unnecessarily burdensome” standard outlined in those cases is inconsistent with s. 11 of the Competition Act and s. 8 of the Canadian Charter of Rights and Freedoms, which guarantees the right to be free from unreasonable search or seizure.
The commissioner also argued that the Pearson/Bell Mobility standard inappropriately relies on principles related to discovery in civil proceedings, even though the standard applies to Competition Bureau investigations – not litigation.
The FCA sided with the lower court. “Reading the Federal Court’s reasons as a whole, I am unconvinced that the application judge committed any of the errors alleged by the commissioner,” the appellate court said.
First, the FCA found that the lower court did not apply civil litigation concepts to the investigative process under s. 11 of the Competition Act, noting, for example, that the lower court did not require the commissioner to prove that the information it was requesting from Amazon was relevant to a case that is going to trial. In civil litigation, documentary production must be relevant to the pleaded case.
The FCA also rejected the commissioner’s claim that the Pearson/Bell Mobility standard inappropriately requires judges reviewing s. 11 applications to assess the burden imposed by an information request.
However, the appellate court was unmoved.
“The application judge did not reject the commissioner’s data request based on the effort or cost that would be imposed on the respondents,” the FCA said, adding that the lower court decided to reject the request based on uncertainty about its scope.
“On the factual record before it, the Federal Court did not make a reviewable error when it declined to order the production requested by the commissioner,” the FCA said. “An application judge cannot conduct the balancing exercise required by section 8 – determining whether the intrusiveness of the production order is justified by the state’s interest in law enforcement – if they do not know the extent of what the state seeks to have produced.”
