REFUSAL TO DEAL
OUR SERVICES
We practice federal competition law, have provided Canadian competition law advice to clients across Canada and internationally and provide a full range of competition law and foreign investment law services including in relation to the criminal conspiracy, merger, abuse of dominance, misleading advertising and deceptive marketing provisions of the federal Competition Act. Our competition law services in relation to refusals to deal include advice on Competition Act remedies for refusals to deal (the refusal to deal, conspiracy, abuse of dominance and price maintenance provisions), penalties and process for seeking refusal to deal remedies.
OVERVIEW OF REFUSAL TO DEAL IN CANADA
The refusal to deal provisions are contained in section 75 of the Competition Act (the “Act”). Under these provisions, a distributor whose supply has been terminated by a supplier may, if it can establish the elements of the provision, have an alternate remedy in addition to any contractual remedies (i.e., under a supply or distribution agreement). The refusal to deal provisions were enacted to respond to a concern that in some Canadian industries there may be relatively few suppliers and, as such, a customer that has been terminated from supply may be unable to secure alternate sources of supply.
Competition Act Remedies for Refusals to Supply
Section 75 is one of four provisions of the Act under which potential competition law remedies may be available to distributors whose supply of a product has been terminated (in addition to the criminal conspiracy and civil abuse of dominance and price maintenance provisions).
Elements
Under section 75, the Tribunal has the power to order a supplier to accept a person as a customer on ”usual trade terms” where all of the following elements are established: (i) a person is substantially affected in his business, or precluded from carrying on business, due to his inability to obtain adequate supplies of a product anywhere in a market on usual trade terms, (ii) the person is unable to obtain adequate supplies of the product because of insufficient competition among suppliers of the product in the market, (iii) the person is willing and able to meet the usual trade terms of the supplier (or suppliers) of the product, (iv) the product is in ample supply and (v) the refusal to deal is having (or is likely to have) an adverse effect on competition in a market.
Both the Commissioner and private parties (with leave) may make applications to the Tribunal for orders under section 75. To date, there have been approximately three cases brought by the Commissioner under section 75 and fifteen “private access” applications commenced by private parties seeking resupply of products. While the refusal to deal provisions offer terminated distributors a potential additional cause of action (i.e., in addition to contractual remedies), the provisions have not been an enforcement priority for the Bureau to date and private parties seeking Tribunal orders for re-supply have met with mixed results under section 75.
CANADIAN COMPETITION LAW LINKS
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CONTACT US
We provide Canadian competition law and consulting services to Canadian and international clients. For more information about our services contact us at steve@nortonstewart.com, info@competitionlawcanada.com or call us on +1 604 687 0555 or +1 778 867 5558. Visit us on the web in Toronto at www.torontocompetitionlawyer.com or www.torontocompetitionlaw.com.