Price Maintenance in Canada – Guidance from the Competition Bureau

Authors: John Bodrug and Jim Dinning

In 2009, Canada’s Competition Act1 (the Act) was amended to decriminalize price maintenance and to introduce a competitive effects criterion. These amendments responded to the 2008 Competition Policy Review Panel report,2 which noted that Canada’s criminal offense for price maintenance was more restrictive than comparable U.S. law as reflected in the Leegin decision,3 and that earlier studies had recommended changes to the price maintenance provision.4 These amendments significantly expanded the scope for permissible price maintenance in Canada.

Although the general intent was to more closely harmonize Canadian and U.S. price maintenance law, the Canadian amendments are quite detailed and include express elements that may both expand and limit the law’s application relative to U.S. federal antitrust law. Guidelines from the Canadian Competition Bureau (the Bureau) released in September 2014 seek to clarify the Canadian provision and identify price maintenance practices that may still be at risk of challenge.5

In this article, we review the price maintenance provision in the Act, discuss concerns raised by the Bureau in some recent cases, and note key aspects of the Guidelines that may point to the Bureau’s future enforcement priorities. We conclude that the current climate creates a generally permissive regime for suppliers that do not possess market power, with some potential uncertainties resulting from possible expansive applications of the price maintenance provision suggested by the 2014 Guidelines.

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