Wrongful Violations And Innocence In The Regulation Of The Digital Economy

• Published date: 09 July 2025
• Subject Matter: Antitrust/Competition Law, Litigation, Mediation & Arbitration, Criminal Law, Antitrust, EU Competition , Trials & Appeals & Compensation, Crime
• Law Firm: Gardiner Roberts LLP
• Author: Mr Kenneth Jull

Would you make a major financial decision in the digital economy on behalf of yourself or your corporation on the basis of a flip of a coin? The probabilities on this coin flip are equal at 50%, provided that the person flipping the coin does not see the starting state of the coin before the flip.¹ Most participants in the digital economy would not be so precipitative as to base a major financial decision on the flip of a coin. If the odds were just slightly changed to 50.1% in your favour, would that change your risk analysis? In linguistic terms, would you make a decision risking millions of dollars on the basis that is "more probable than not"? In legal terms, would you make a decision involving the future of your corporation on a balance of probabilities?²

After answering the above questions, it may surprise you to learn that in some jurisdictions such as Canada, the innocence or liability of your company may be decided by administrative tribunals on this same 50.1% standard. For example, the Canadian Competition Tribunal applies the 50.1% standard in determining whether it will impose an administrative monetary penalty ("AMP").³ Under some regimes these AMPs may be in the millions or even billions of dollars, described as "King Kong" AMPs.⁴ In Canada, a recent example of the potential magnitude of AMPs is the decision by Justice Little in the Cineplex case, imposing an AMP in the amount of $38.978 million with respect to deceptive drip pricing.⁵ We use this case only as a recent example of a large AMP, but we believe that it was correctly decided on the merits and the constitutionality of the AMP was not challenged in that case.

AMPs are increasingly used to police the digital economy. In Europe, a record EU antitrust fine of 4.3-billion-euro ($4.5 billion) imposed on Google is being appealed.⁶ EU antitrust regulators imposed the first penalties under the Digital Markets Act (DMA) doling out total fines of 700 million euros ($797 million) to Apple and Meta.⁷ In the European Union, while the term "balance of probabilities" is not commonly used in the same way as in common law jurisdictions, the standard applied in competition law proceedings is widely understood to be more stringent. The European Commission is required to present evidence that is "sufficiently precise and consistent to support the firm conviction that the alleged infringement took place.⁸ This formulation has been upheld in several decisions of the General Court and the Court of justice of the European Union (CJEU), and is considered stricter than the civil standard of proof applied in Canada.

It is the thesis of this article that the danger lurking beneath AMPs is the risk of a wrongful finding of a violation. By contrast, in criminal law there is a collective worry about the risk of a wrongful conviction. The requirement of an exacting standard of proof for criminal conviction dates back centuries. English jurist William Blackstone wrote in the 18th century, "[As the] law holds, it is better that ten guilty persons escape than that one innocent suffer" (Blackstone 1769, p. 352).⁹ The standard of proof beyond a reasonable doubt has been defined by the Supreme Court of Canada using its contrast with the balance of probabilities standard:

In my view, an effective way to define the reasonable doubt standard for a jury is to explain that it falls much closer to absolute certainty than to proof on a balance of probabilities. As stated in Lifchus, a trial judge is required to explain that something less than absolute certainty is required, and that something more than probable guilt is required, in order for the jury to convict. Both of these alternative standards are fairly and easily comprehensible. It will be of great assistance for a jury of the trial judge situates the reasonable doubt standard appropriately between these two standards.¹⁰ [emphasis added]

The importance and significance of the burden of proof is illustrated by the Finkelstein¹¹ case. Former Toronto Bay Street lawyer, Mitchell Finkelstein, was sanctioned by the Ontario Securities Commission ("OSC") for misusing confidential information which he obtained...