Google loses discovery appeal in online advertising competition case

Google has lost an appeal seeking to overturn limits on pre-hearing questioning and document disclosure in the Competition Commissioner’s case over some of its online advertising services.

In Google Canada Corporation v. Canada (Commissioner of Competition), 2026 FCA 173, decided October 14, 2026, the Federal Court of Appeal upheld a Competition Tribunal ruling on discovery refusals and dismissed the appeal with costs.

The judgment does not decide whether Google Canada Corporation or Google LLC violated competition law. It addresses how the parties must exchange information before the merits hearing, including when the Commissioner may temporarily withhold material protected by litigation privilege.

Relevance is only part of the discovery test

The Commissioner alleges that some of the companies’ online advertising services are anti-competitive under section 79 of the Competition Act. During discovery, questions were refused on grounds that included relevance and litigation privilege. Tribunal chair Andrew Little ruled on those refusals in 2026 Comp. Trib. 17, prompting the companies’ appeal.

Writing for a unanimous three-judge panel, Justice David Stratas explained that discovery is intended to help resolve a dispute fairly, efficiently and on an informed record. It can clarify which allegations have evidentiary support, reduce surprises at trial and give parties a better basis for settlement.

But allowing every question that has some logical connection to a case can generate disproportionate searches, repeated examinations and large volumes of marginally useful material. The court said relevance must therefore be considered together with materiality and proportionality.

Materiality asks whether a fact actually matters to the claims or defences under the applicable law. Proportionality weighs the value of the information against the expense, delay and intrusion involved in obtaining it.

The court identified several ways discovery can go too far: a question may concern a fact that does not matter to the case; it may be too remote to assist significantly with a material issue; or the combined burden of a line of inquiry may outweigh its likely benefit, even if individual questions appear defensible.

That does not justify an unduly narrow approach. Excessive restrictions can cause unfairness and delay at trial, and the court said genuine doubt will often favour allowing a question. Questions about a party’s legal positions can also be proper when they advance discovery’s purposes.

Tribunal’s decision survived appellate scrutiny

The appeal court found that the Tribunal had considered relevance, materiality and proportionality throughout its reasons and had applied the accepted discovery principles without a reviewable error.

Google’s other arguments did not establish an error of law, including on litigation privilege or the relationship between discovery and issues reserved for the merits hearing. The court distinguished a genuinely separable legal mistake from disagreement with a decision that mixes law and case-specific facts.

Without such a legal error, the companies had to demonstrate a palpable and overriding error. The court found none. It emphasized the Tribunal’s specialized experience with complex proceedings and its ability to manage procedure while preserving fairness and the companies’ opportunity to answer the case against them.

A brief affidavit could support litigation privilege

A central dispute concerned whether documents withheld by the Commissioner had been created for the dominant purpose of litigation. Google argued that the Tribunal had accepted a single paragraph in an affidavit without sufficiently scrutinizing it.

The affidavit said its author had reviewed the disputed documents and, apart from three exceptions already produced, confirmed their litigation purpose. It grouped them into communications seeking information from third parties for litigation, communications with prospective witnesses, communications about witness statements, and exhibits to witness statements.

The appeal court rejected the claim that the Tribunal had simply accepted this assertion without analysis. The Tribunal had required evidence showing that each document fell within the protected class, found that the witness had reviewed the documents, and considered the categories and the witness’s knowledge appropriate.

The reasons also addressed the exhibits to witness statements. The Tribunal found that producing them at that stage could reveal the statements’ contents and the Commissioner’s litigation strategy. The appeal court found no reviewable error in that conclusion.

The affidavit was brief, but sufficient in the circumstances. The court noted the difficulty of adding detail without disclosing the protected documents’ substance.

Later disclosure remains possible

The court stressed the limited nature of the privilege ruling. It preserved a private space for the Commissioner’s case preparation at that stage; it did not foreclose necessary disclosure later.

Under the Tribunal’s rules, the Commissioner would have to disclose witness statements and supporting documents before the hearing, potentially including some disputed material. At the hearing, Google could cross-examine witnesses and seek production orders where needed for fairness and accurate decision-making.

The court also expressly left open further disclosure or other procedural accommodation at the hearing beyond the privilege dispute. The ruling therefore upholds this discovery decision, rather than giving the Commissioner permanent protection from disclosure or deciding the underlying competition allegations. The reasons do not fix a dollar amount for costs.