Competition Bureau Using Amazon Canada as a ‘Scapegoat’ Amid Incredible Online Growth

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Canada’s Competition Bureau is investigating whether Amazon’s conduct on is impacting competition.

Recently, the Bureau announced it is inviting market participants to provide input to inform its civil investigation into conduct by Amazon. The Bureau’s investigation is ongoing and there is no conclusion of wrongdoing at this time, it said.


“The Bureau is examining whether Amazon is engaging in conduct on its Canadian marketplace,, that is impacting competition to the detriment of consumers and companies that do business in Canada,” explained the Bureau on its website.

“The Bureau is conducting its investigation under the restrictive trade practices provisions of the Competition Act, with a focus on potential abuse of dominance.”

It said areas of interest include:

  • any past or existing Amazon policies which may impact third-party sellers’ willingness to offer their products for sale at a lower price on other retail channels, such as their own websites or other online marketplaces;

  • the ability of third-party sellers to succeed on Amazon’s marketplace without using its “Fulfilment By Amazon” service or advertising on; and

  • any efforts or strategies by Amazon that may influence consumers to purchase products it offers for sale over those offered by competing sellers.


Gary Newbury, a retail supply chain strategist and serial transformation executive, said Amazon has had a long-term disruptive impact on retail markets due to its ability to both offer a substantial assortment and provide an efficient service to residential addresses unmatched by most small or mid-sized retailers.

“This has forced many retailers to re-evaluate their go-to-market strategies and bring about change. Some retailers have been successful, many have not made changes to compete effectively, despite them having a clear advantage with branding, last mile potential and continuing to build on personal service/customer experience. After all Amazon does have a ‘transaction’ rather than relationship building nature to it,” he said.

“As we approached 2020, having had a lacklustre 2019 trading, January had a rash of store closures and now the deep impact of COVID-19 has driven retailers to raise their concerns on Amazon’s practice of reviewing sellers of fast moving products on their marketplace, find a supplier who could produce an ‘Amazon own label’ and then position it visibly on the virtual shelf with a price point to attract consumers looking for a good deal. The advantage Amazon has is immense data analytics capabilities and a keenness to be the most customer centric retailer in the world.”

He said the practice of retailers checking out competitors’ products, price pointing, and volumes is decades old. Their very existence — and certainly their loyalty building programs — necessitates the development of similar, but slightly differentiated products. Even data on national brands sold through their banners will provide information on where future new product opportunities are.

“Furthermore, it is, perhaps, a less talked about practice of manufacturers developing private label products with a retailer, and then talking to their competitors, making some minor formula changes, repackaging, providing some ‘marketing support’, and hey presto, your competitor has quickly launched a directly competing product,” said Newbury.

“If you go to your local store and look at the positioning of private labels and national brands, price points and overall visual merchandising, you’ll likely see this in action every day. All Amazon has been able to do is to bring more analysis and data science to this situation (i.e. they are more efficient) with a view to drive their sales of own label products. If the national brands have built sufficient loyalty, they might see a slight dip, however, just as the national brand will place itself in various retailers looking to build volume, there is always a risk the same banner (or a competitor) will develop an own label to compete directly with it.”

Despite the cries of “it’s unfair”, logically the Competition Bureau should conclude “nothing to see here”, although to placate the concerns of legacy retailers they may make noises about there being a “borderline” case of merit, he explained. At the end of the day, it is in every retailer’s interest to attract consumers to their stores and persuade them to buy to meet their needs and wants. Amazon is no different in this regard, added Newbury.

“Legacy retailers must up their game, especially during this time, to differentiate the value they can provide to consumers through a combination of their store formats and online proposition. After all, is a relatively new arrival. Many retailers have been here for decades and need to reinvent their propositions to win, rather than exercise the time of the competition bureau. Amazon is here to stay! Their consumers will see to that with their wallets,” he said.


Bruce Winder, author of RETAIL Before, During & After COVID-19 and President of Bruce Winder Retail, said the Bureau investigation signals that e-commerce and specifically Amazon-powered e-commerce has hit the tipping point in Canada.

“With COVID-19, the importance of online shopping has grown significantly and thus has received more attention from small merchants trying to generate cash via e-commerce to stay afloat,” he said.

“Amazon has now arrived at the point where they are an easy target — similar to the role Walmart played in the 1990’s — and an easy scapegoat for the consolidation that’s been hurting the retail industry over the last few years. In Canada, we operate in a retail oligopoly with few players controlling a large portion of the market. With this much concentrated power comes the temptation and potentially realization of market abuse.

“In my opinion, what Amazon is doing is really not that different than other large retailers — having worked at big retail for over two decades.”

He said large retailers are notorious for using their market size and dominance to persuade suppliers and other partners to comply with their demands. Big retail will engage in channel management activities that help semi-control the marketplace to their advantage while straddling the line between being onside and offside from a legal perspective. They also use supplier “partnership” programs to sell advertising packages that give participating vendors better positioning in flyers, online and in-store.


“Big retailers have been using private label programs for decades which are designed to offer better value than competing national brand products while improving retailer gross margin. Sometimes these retailers “knock off” national brands with their own products and place these products “in the strike zone” on shelf or online to persuade the consumer to buy the private label over the national brand,” said Winder.

“Governments around the world have felt pressure from citizenry and small business to tame dominant players through antitrust investigations. Will these investigations yield legislation? Time will tell. Big firms spend billions of dollars on lobbyists to counter this offensive. Does Canada need regulation to protect consumers and small businesses? I say yes. Is Amazon any different than other large retailers? I say no.”

Michael Kehoe, a retail real estate specialist with Fairfield Commercial Real Estate in Calgary, said the Bureau investigation of Amazon will attempt to determine if Canadian retailers have been disadvantaged by not being allowed to list on Amazon.

“The importance of having a level playing field in an extremely competitive industry is of the utmost importance. The results of the scrutiny of this government agency could influence the future of our free-market retail landscape,” he said.

Article Author

Mario Toneguzzi
Mario Toneguzzi
Mario Toneguzzi, based in Calgary, has more than 40 years experience as a daily newspaper writer, columnist, and editor. He worked for 35 years at the Calgary Herald covering sports, crime, politics, health, faith, city and breaking news, and business. He is the Senior News Editor with Retail Insider in addition to working as a freelance writer and consultant in communications and media relations/training. Mario was named as a RETHINK Retail Top Retail Expert in 2024.

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