Federal Court Rules That Making Available Free Online Aviation Guides Does Not Constitute Predatory Pricing

The Federal Court of Canada (Trial Division) has ruled that offering free aviation guides on a web site did not breach the predatory pricing provisions of the Competition Act. In a somewhat unusual move, the plaintiff, Michael Culhane, an aviation author and publisher, brought a civil action based on an alleged breach of the predatory pricing provisions of the Competition Act. Culhane had objected to the decision of the defendant, ATP Aero Training Products Inc, to offer free aviation guides through its web site. The plaintiff claimed that the defendant was engaged in a predatory pricing scheme contrary to s 50(1) of the Competition Act by selling products at unreasonably low prices. As well, the plaintiff contended that the defendant's activities unlawfully interfered with his economic interests. The relief sought included a declaration, a prohibitory injunction and damages. The Court rejected both claims of predatory pricing and unlawful interference with economic interests. To determine if the defendant was engaged in predatory pricing, the Court considered the five elements necessary to establish the claim: Although the defendant had been providing the aviation exams free of charge since 1998, the Court nevertheless found that it was engaged in a policy of "selling products", given that the guides had been previously sold for a price and updated regularly. Further, the Court found that the defendant sold the exam guides at an unreasonably low price (namely, zero). However, the Court found no evidence to suggest that the defendant had a design or had carried out actions that had the tendency to lessen competition nor that the defendant's unreasonably low pricing caused loss or damage to the plaintiff. Further, the Court found the defendant did not unlawfully interfere with the plaintiff's economic interests. For a copy of the decision (Culhane v ATP Aero Training Products Inc), see: http://decisions.fct-cf.gc.ca/fct/2004/2004fc535.shtml. Summary by: Colin Adams