Canadian COMPETITION LAW

In a significant recent decision by the federal Competition Tribunal, the Tribunal granted leave to the Used Car Dealers Association of Ontario (the “UCDA”) to make a section 75 refusal to deal application relating to a refusal by the Insurance Bureau of Canada (the “IBC”) to supply data to it for one of its products for its members.

This recent case, reasons for which were issued on September 9, 2011, is significant, in that the UCDA was seeking leave to make its refusal to deal application in light of a longstanding adverse decision – the Warner music case.

(Leave from the Tribunal is a prerequisite to making refusal to deal applications to the Competition Tribunal, as well as private applications under the price maintenance (section 76) and exclusive dealing/tied selling/market restriction sections (under section 77).)

In its earlier Warner decision, the Tribunal held that licenses to use and reproduce intellectual property (music in Warner) was not a “product” for section 75 of the Competition Act and also that a license could not be in “ample supply” (two of a number of requirements under section 75), given that a license holder has a right under intellectual property legislation (e.g., the Copyright Act) to decide whether or not to license its IP to third parties.

In light of Warner, it has generally been thought that refusals to license intellectual property could not be the subject of refusal to deal applications under section 75 (or at minimum, that arguments would need to be made as to why Warner should not apply to a particular case, and that this could reduce the likelihood of success of section 75 applications in the context of intellectual property refusals to deal).

In granting leave to the UCDA, the Tribunal rejected arguments made by the IBC that, as in Warner and the licensing of music, the data in this case was being licensed to the UCDA to use and therefore could not be the subject of an application under section 75.

Interestingly, the Tribunal held, among other things, in this preliminary leave application that the data had never been characterized by the parties as a license, that this “product” was only incidental to membership in the IBC generally and also that the data at issue (vehicle accident history data) was in ample supply.

In short, the UCDA was successful in convincing the Tribunal, at least at the preliminary leave stage in this case, that Warner was not an obstacle to proceed to try and obtain a Tribunal remedy for the IBC’s refusal to supply vehicle accident history data.

In addition to potentially giving private applicants helpful precedent for refusal to supply cases involving intellectual property, this recent case is also significant as it adds to the previously small number of successful leave applications to the Tribunal under section 75 of the Act.

In this regard, the number of applicants that have been successful in obtaining leave to the Tribunal since the “private access” provisions of the Act were introduced in 2002 has been relatively negligible.

For a copy of the Tribunal’s decision see:

Used Car Dealers Association of Ontario v. Insurance Bureau of Canada

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