Enforcement

Complaints procedure for private parties

Is there a procedure whereby private parties can complain to the authority responsible for antitrust enforcement about alleged unlawful vertical restraints?

Yes, private parties may make complaints informally to the Bureau. Additionally, section 103.1 of the Act permits private parties to apply to the Tribunal for leave to make an application if they are directly and substantially affected by the conduct of another party. Private access to the Tribunal is only available for conduct reviewable under sections 75 (refusal to deal), 76 (price maintenance) and 77 (tied selling, exclusive dealing and market restriction) of the Act, which are all Reviewable Matters.

Regulatory enforcement

How frequently is antitrust law applied to vertical restraints by the authority responsible for antitrust enforcement? What are the main enforcement priorities regarding vertical restraints?

Antitrust enforcement against vertical restraints is not overly common in comparison to other provisions of the Act. This is in part owing to the private right of action that is available for affected parties to challenge the conduct on their own. The Bureau has indicated in the last few years that an increasingly important enforcement priority is ensuring that consumers are able to enjoy the competitive benefits of e-commerce.

What are the consequences of an infringement of antitrust law for the validity or enforceability of a contract containing prohibited vertical restraints?

Conduct that is reviewable by the Tribunal under Part VIII of the Act is not per se illegal; the Tribunal must first make a finding that it is prohibited conduct under Part VIII. Therefore, a party to a contract cannot challenge the enforceability of the contract until the Tribunal makes a finding that it is contrary to the Part VIII of the Act. See Chadha v Bayer Inc [1998] OJ No 6419.

May the authority responsible for antitrust enforcement directly impose penalties or must it petition another entity? What sanctions and remedies can the authorities impose? What notable sanctions or remedies have been imposed? Can any trends be identified in this regard?

The Bureau must petition the Tribunal for an order under Part VIII or the court for an order under section 11 (discussed further below). The Act contemplates serious penalties for failure to comply with such orders. For instance, section 66 of the Act provides for serious penalties for failure to comply with an order imposed by the Tribunal under the provisions of Part VIII of the Act (subject to certain exceptions), including a fine in the discretion of the court and imprisonment for a term not exceeding five years. Section 65(1) sets the penalty for failure to comply with an order made under section 11 (or a contravention of subsection 15(5) or 16(2), which refer to cooperation with a warrant). Contraventions could lead to a fine in the discretion of the court and imprisonment for two years.

Investigative powers of the authority

What investigative powers does the authority responsible for antitrust enforcement have when enforcing the prohibition of vertical restraints?

Section 11 allows a judge to make an order on application by the Commissioner for, among other things, the production of documents. Subsection 11(4) establishes that an order made under section 11 has effect anywhere in Canada. It is possible, though very rare, that the Bureau would request information from suppliers outside Canada.

Private enforcement

To what extent is private enforcement possible? Can non-parties to agreements containing vertical restraints obtain declaratory judgments or injunctions and bring damages claims? Can the parties to agreements themselves bring damages claims? What remedies are available? How long should a company expect a private enforcement action to take?

Section 36 of the Act provides a limited statutory right of action for damages granted to persons who have suffered loss or damages resulting from actions contrary to the criminal provisions of the Act (which does not include the provisions dealing with vertical restraints), or the failure to comply with any orders made under the Act. Court actions can take several years.

Section 103.1 of the Act permits private litigants to apply to the Tribunal an order (but not damages) in certain circumstances. See the discussion in question 49.