Canadian COMPETITION & ANTITRUST LAW

OVERVIEW 

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 ABUSE OF DOMINANCE

Section 75 is one of four provisions of the Act under which potential competition law remedies may be available for refusals to deal/supply.

Depending on the circumstances, remedies may also be available to parties who have been refused supply (or been the subject of a refusal to deal / boycott / concerted refusal to deal) under sections 45 (criminal conspiracy), 76 (price maintenance) or 79 (abuse of dominance).

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.

COMPETITION/ANTITRUST LAW & ECONOMIC TERMS

For competition/antitrust definitions and terms see:

Antitrust Alphabet

REFUSAL TO DEAL LINKS & RESOURCES

Competition Act

Competition Act

Competition Tribunal

Competition Tribunal – homepage

Remedies are also available for refusals to deal from Canadian courts – for example, if section 45 (conspiracy) is argued, rather than a refusal to deal under section 75 of the Act (the Competition Tribunal has exclusive jurisdiction to hear refusal to deal applications under section 75 of the Act).

Competition Bureau

Pamphlets

Refusal to Supply (Section 75 – refusal to deal)

Abuse of Market Power (Section 79 – abuse of dominance)

Setting Your Own Price (Section 76 – price maintenance)

Bulletins

Information Bulletin on Private Access to the Competition Tribunal

Enforcement Guidelines

Competitor Collaboration Guidelines (Section 45 – conspiracy)

Updated [Draft] Enforcement Guidelines on the Abuse of Dominance Provisions (Section 79 – abuse of dominance)

Enforcement Guidelines on the Abuse of Dominance Provisions (Section 79 – abuse of dominance)

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