The Canadian Competition Tribunal (Tribunal) issued its reasons for denying an application in a recent “refusal to deal” case. The case, Audatex Canada, ULC v. CarProof Corporation, is notable because it emphasizes the need for private litigants to present “non-speculative, cogent evidence” at the very outset of their case.
Audatex, a supplier of automotive data to insurance companies, sought leave of the Tribunal to bring an application to compel parties with access to automotive listings data to supply Audatex with the listings data. Audatex alleged that the respondents had engaged in a “refusal to deal.”
The Tribunal applied prior case law to assess whether Audatex had presented evidence showing the “existence of reasonable grounds for a belief” that Audatex could satisfy each of the elements of a “refusal to deal” case. This includes an obligation to demonstrate that Audatex was directly and substantially affected in its business as a result of the refusal to deal. The Tribunal found that Audatex had failed to present such evidence and dismissed Audatex’s application, without inquiry into whether Audatex’s evidence established the other elements of a “refusal to deal” case.
- In the U.S. and European Union, pure “refusal to deal” allegations between customers and suppliers (especially absent wider allegations of abuse of dominance) have become increasingly rare. In Canada, the Competition Actcontains a stand-alone “refusal to deal” provision, and it is one of the few provisions in the statute that gives private litigants the ability to bring actions directly if they obtain leave of the Tribunal (i.e., private litigants can only complain to the Competition Bureau about abuses of dominance, but cannot commence their own litigation). As a result, “refusal to deal” is an area of law that is alive and well in Canada.
- Obtaining leave of the Tribunal to bring a “refusal to deal” application under the Competition Act requires that a private litigant present “non-speculative, cogent evidence” at the outset of its case, usually in affidavits attached to its application, of every element of a “refusal to deal” case. It was the failure to present evidence on one of these grounds that Audatex’s application failed.
- The decision pays careful attention to the public policy purposes of the Competition Act, reasoning that even though the “refusal to deal” section gives private litigants access to the Tribunal, the section “is not there to arbitrate private contractual disputes relating to the supply of a product in circumstances where the refusal to deal does not result from insufficient competition and does not have a market impact.”