On March 20, 2014, the Canadian Competition Bureau (the
"Bureau") released new draft Enforcement Guidelines on
Price Maintenance (Section 76 of the Competition Act) ("Draft
Guidelines") for public consultation. Though they are still to
be finalized, the release of these Draft Guidelines has been
eagerly anticipated, particularly in light of the 2009 amendments
to the price maintenance provisions in the Competition Act (the
"Act"), coupled with the release of the landmark
Visa/MasterCard decision handed down by the Competition Tribunal
(the "Tribunal") last year.1The Draft
Guidelines also contain hypotheticals to further explain the
Bureau's enforcement approach.
PRICE MAINTENANCE DEFINITION
Price maintenance – governed by section 76 of the Act
– occurs when a person, directly or indirectly, influences
upward or discourages the reduction of another person's selling
or advertised prices by means of a threat, promise or agreement. It
may also occur when a person refuses to supply another person or
otherwise discriminates against that person because of their low
pricing policy. In either case, the actions taken must result in an
"adverse effect on competition in a market" (i.e. a
market power requirement). In 2009, price maintenance was
decriminalized and is now a reviewable practice pursuant to section
76 of the Act. It no longer carries financial penalties or jail
VISA/MASTERCARD ANALYSIS MENTIONED THROUGHOUT DRAFT
Given its recent release, it is not surprising to find the
Visa/MasterCard decision heavily quoted and discussed throughout
the Draft Guidelines. The approach taken by the Tribunal in the
case was referred to in the discussion of the section's market
power requirement, and indeed, was cited in support of the position
that though the Bureau's general approach is that a market
share of less than 35% will not usually prompt further
investigation, there may be instances that a firm with a market
share below 35% could possess market power.2
GUIDANCE ON REFUSALS TO SUPPLY/DISCRIMINATION DUE TO LOW
The Draft Guidelines confirm that the Bureau will apply a broad
approach in considering the application of the refusal to
supply/discretion aspects of section 76. For instance, the Bureau
asserts that "there is no requirement that a person be an
existing or previous customer of a supplier for the "refusal
to supply" provision of section 76 to apply"3
thereby potentially expanding the scope of the section.
Additionally, the Bureau suggests that the existence of a "low
pricing policy" need not be the only or even predominant
reason for the refusal or discrimination to supply, but merely a
factor informing the supplier's decision. The Bureau also used
the distinction between "policy and practice" in s.
76(1)(a)(ii) and s. 76(8) to confirm that a "low pricing
policy" may exist regardless of if a retailer has actually
engaged in the conduct, declaring that mere "stated
intent" is sufficient to qualify as a "policy".
These aspects of the Draft Guidelines will attract attention.
LIMITED GUIDANCE ON MINIMUM ADVERTISED PRICING
Given the robust demand for guidance on MAP Policies, and the
fact that they are still relatively new to Canada following the
2009 amendments, it is somewhat surprising that the Draft
Guidelines provide very little guidance in this particular
MAP Policies are discussed only briefly in the context of
conduct that "directly or indirectly influences upward or
discourages the reduction of selling or advertised prices of a
product."4 The Draft Guidelines stated that a
suppliers' mere use of an MAP may alone be sufficient to be
considered an "influence" on price, particularly if the
Bureau is not convinced that the supplier has sufficiently
expressed that there is no obligation or consequence whatsoever to
abide by the MAP. Unfortunately, no additional context is
Hopefully this will be addressed in the final version of the
The Draft Guidelines are currently in draft form, and are
subject to public consultation until June 2, 2014. Up until that
time the Bureau will entertain comments/review from any concerned
1. The Commissioner of Competition v. Visa Canada
Corporation and MasterCard International Incorporated et al, 2013
Comp. Trib. 10.
2. One may wonder however, about the utility of the
Bureau issuing interpretations of recent judicial
3. Enforcement Guidelines, Price Maintenance (Section 76
of the Competition Act) at page 10.
4. Enforcement Guidelines, Price Maintenance (Section 76
of the Competition Act) at page 6.
The Commissioner of Competition addressed innovation, enforcement and policy initiatives at the Competition Bureau in his keynote speech, "Strengthening Competition: Innovation, Collaboration and Transparency."
Used car listing website operator CarGurus Inc.'s attempt to force rival Trader Corporation to supply it with vehicle listing data has encountered a dead end as the Competition Tribunal denied it leave to commence a private application under several provisions of the Competition Act.
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