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August 26th, 2025
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Competition Act Amendments and What It Means for Fintech
Regulation | Jun 25, 2024
Image: Freepik/Racool studio
Here's what fintechs need to know about major amendments to the Competition Act to boost fairness, protect consumers.
On June 20, 2024, Canada introduced and implemented important modifications to the Competition Act (See: release), taking a critical step toward improving market fairness and protecting consumers. These modifications are intended to solve modern market concerns, ensuring that enterprises compete on an equal playing field while protecting consumer interests. These developments have a significant impact on the fintech industry, which is known for its quick growth and innovation.
See: AI’s Impact on Competition: Bureau Calls for Insights
Matthew Boswell, Commissioner of Competition:
“These amendments are a key step in modernizing Canada’s competition law and give the Bureau more effective tools to protect and promote competition in Canada. A modern Competition Act is fundamental to driving lower prices and innovation while fueling economic growth. A more competitive economy will benefit all Canadians – by offering more choice and greater affordability for consumers and businesses.”
Key Changes and Impact
1. More Effective Merger Control
See: DoF Consultation: Financial Competition in Canada
- The modifications strengthen the Competition Bureau's authority to investigate and prosecute deals that may harm competition by establishing a presumption that a merger is anti-competitive if it significantly increases market concentration or share.
- If a large financial institution wants to buy a fast-growing fintech business, the Bureau will have an easier job challenging the merger if it significantly increases market concentration. For example, a planned merger between two major banks would be carefully evaluated to avoid hurting competition in the financial services industry.
2. Stronger Powers to Address Anti-Competitive Agreements
- The changes strengthen civil restrictions on anti-competitive agreements (up to 3 years old), and include monetary fines and restorative remedies.
See: Can Canada Harvest the Next Wave of Productivity Growth?
- Agreements between major banks and fintech companies that limit them from working with other financial institutions may be contested. The latest amendments may address circumstances in which a major bank has an exclusive agreement with a fintech company that sells blockchain technology, preventing the firm from providing services to other banks.
3. Enhanced Refusal to Deal Provision
- The changes widen the refusal to deal clause to cover circumstances where rejection has a significant impact on a company, while also guaranteeing that independent repair service providers have access to diagnostic or repair information.
- A fintech business that relies on data from a major bank to provide innovative financial services may dispute the bank's refusal to provide critical information. This enables fintech companies to collect critical information for developing competitive products and services.
4. Improvements to Deceptive Marketing Provisions
- The statute now requires firms to justify discount claims and prohibits omitting required costs from advertised prices unless enforced by the government.
See: RBC’s Climate Claims Being Investigated by Competition Bureau
- Fintech companies that offer financial services, such as loans or credit cards, must ensure that all fees are fully disclosed. Misleading techniques, such as concealing expenses in the fine print of digital contracts, would be outlawed under the new regulations. This influences how fintech companies market their products and services to customers.
5. Expanded Private Access to the Competition Tribunal
- Private parties can now directly challenge anti-competitive conduct, including as deceptive marketing and anti-competitive agreements, broadening who can petition the Tribunal and reducing the legal threshold for cases to continue.
- Small financial firms can directly challenge larger incumbents who engage in anti-competitive activity, such as exclusive contracts or exploitative pricing. This clause enables fintech companies to pursue legal action more easily, resulting in a more competitive market.
Conclusion
The June 20, 2024 amendments to the Competition Act are a major leap forward in Canada's ongoing efforts to create a competitive, fair, and transparent marketplace.
See: Canada’s Competition Problem: 7 Reasons
These measures, which streamline merger evaluations, increase fines, enhance transparency, strengthen consumer protection, and support SMEs, ensure that the Canadian market remains dynamic and fair for all participants, including the fintech industry.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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