Erika Douglas, Mark Katz, Nov 14, 2013
The Canadian Competition Act was amended in 2009 to repeal the former criminal prohibition against price maintenance and introduce a new civil “reviewable practice” which prohibits suppliers from adversely affecting competition by “influencing upward or discouraging the reduction” of resale prices.
The Competition Bureau brought its first case under the new price maintenance provision in 2010 alleging that certain of Visa and MasterCard’s “merchant acceptance rules” had the effect of “influencing upward or discouraging the reduction” of credit card acceptance fees charged to merchants, to the detriment of competition in the relevant market.
The Bureau’s price maintenance case against Visa and MasterCard attracted a great deal of interest and attention in Canada. Ultimately, the Competition Tribunal (which adjudicates such matters) ruled against the Bureau because it concluded that the Bureau’s case did not fit within the intended scope of the new price maintenance provision.
In many respects, the Bureau proceedings against Visa and MasterCard can be regarded as a “one off” case with only minor implications for the future enforcement of the price maintenance provision in Canada. The case certainly did not involve a typical resale price maintenance scenario. However, it is also possible that theVisa/MasterCard case may one day be regarded as the high water mark for price maintenance enforcement in Canada. That is because the Bureau is currently signaling that it does not consider resale price maintenance to be a top enforcement priority. If that truly turns out to be the case, the result would be consistent with the recent trend in Canadian competition law to downplay enforcement of pricing conduct outside of horizontal price-fixing.
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