Most mobile phones in Canada contain software that prevents the consumer from using the phone on multiple networks. This is known as a ‘software lock’, and is installed prior to the point of sale by the mobile service providers. As of 2011, all three large Canadian service providers have adopted a similar practice to charge a fee to remove the software lock from phones. This fee applies even after the consumer’s service contract with the provider ends. This thesis examines whether the practice of charging consumer a fee for removing the software lock after the contract expires is anti-competitive in Canada. Through examining economic theory and undergoing legal analysis, this thesis will argue that while the practice is clearly anti-competitive, it does not substantially lessen competition enough to be prevented under competition law. This thesis suggests that this industry practice should be prohibited through the passing of consumer protection legislation.

Most mobile phones in Canada contain software that prevents the consumer from using the phone on multiple networks. This is known as a ‘software lock’, and is installed prior to the point of sale by the mobile service providers. As of 2011, all three large Canadian service providers have adopted a similar practice to charge a fee to remove the software lock from phones. This fee applies even after the consumer’s service contract with the provider ends. This thesis examines whether the practice of charging consumer a fee for removing the software lock after the contract expires is anti-competitive in Canada. Through examining economic theory and undergoing legal analysis, this thesis will argue that while the practice is clearly anti-competitive, it does not substantially lessen competition enough to be prevented under competition law. This thesis suggests that this industry practice should be prohibited through the passing of consumer protection legislation.