Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Canada Competition Bureau’s draft price maintenance guidelines released for comment, (Mar 20, 2014)

By Jeffrey May, J.D.

The Canada Competition Bureau is seeking comments on draft enforcement guidelines regarding resale price maintenance. The guidelines are intended to describe the Bureau’s current approach to enforcing Section 76 of the Competition Act, including with respect to common business practices such as minimum resale pricing, manufacturer-suggested resale pricing (MSRP) and minimum advertised pricing (MAP). Canada’s price maintenance laws were amended in 2009.

The guidelines note that price maintenance practices can be procompetitive. The conduct may enhance the overall level of demand in a market through the stimulation of inter-brand competition and non-price dimensions of intra-brand competition, according to the Competition Bureau.

The conduct is subject to challenge under the Competition Act where it has had, is having, or is likely to have an adverse effect on competition in a market. The Competition Tribunal has held that, based on its plain meaning, the phrase “adverse effect” has “a lower threshold” than “substantial lessening or prevention of competition”, which is the standard for effects under some other provisions of the Competition Act.

The guidelines discuss market definition, market power, and the circumstances in which price maintenance may adversely affect competition, such as where it serves to create, preserve or enhance market power. In addition, the Bureau notes that it will, upon a finding of a violation, a remedy that is based “on the particular facts of each case, the market situation and any other relevant considerations.”

The guidelines also provide examples to illustrate the analytical framework applied by the Bureau in conducting a review of alleged price maintenance conduct.

Comments on the draft guidelines will be accepted through June 2, 2014.

Comments can be submitted by email, fax, or regular mail to:

News: Antitrust