Pricing and Distribution

So-called “excessive price” prohibitions are premised on a theory of harm that is generally rejected in competition law. Indeed, Canada’s Competition Act does not even contain a prohibition against excessive pricing. Among the many reasons for not prohibiting excessive prices are that to do so would undermine investment incentives (both of firms already in the market and potential entrants). Further, the phenomenon of excessive prices, in the absence of exclusionary conduct, is generally viewed as a temporary phenomenon that will be corrected by the market. Also, the legal uncertainty associated with the vagueness of the ‘excessive’ element in the concept could easily result in regulatory overreach.

In the context of COVID-19, the traditional arguments against prohibiting excessive prices have given way to a more consumer-oriented approach with respect to those supplying consumers directly. In response to concerns that retailers may be incentivized to substantially increase prices for products critical to the COVID-19 response, three Canadian provinces (i.e. British Columbia, Ontario & Nova Scotia) have specifically prohibited selling essential goods at unconscionable prices, or at prices markedly higher than fair market value. Other provinces appear to be more actively seeking to enforce pre-existing price gouging prohibitions in their consumer protection legislation, particularly in regards to necessary goods.

Yet, as already noted, it is unclear what constitutes an ‘excessive’ or ‘unconscionable’ price. Despite the fact that some provinces have had prohibitions on price gouging in their consumer protection legislation for decades, those provisions have been rarely used and scarcely considered by Canadian courts. At the same time, failing to comply with these provisions can have serious consequences, including financial penalties, restitution and reputational harm – and in some cases criminal fines and jail time. There is also the possibility a class action lawsuit could be instituted by a consumer on behalf of a class of consumers. What follows is a description of the price gouging laws of each Canadian province, as well as a description of their enforcement approach, where available, in order to help businesses understand how to avoid liability in respect of this particularly vague area of law.
Continue Reading Price Gouging Prohibitions across Canada

Many have expressed concern that retailers are now incentivized to unilaterally increase the prices for products critical to the COVID-19 response. Canada’s competition enforcer, the Competition Bureau, does not have clear jurisdiction to regulate prices or otherwise directly prevent price gouging. However, the Ontario government is now expressly prohibiting price gouging for “necessary goods” (as defined). In particular, through an emergency prohibition order made under the Emergency Management and Civil Protection Act on March 27, 2020, certain persons are prohibited from selling “necessary goods” at “unconscionable prices”.


Continue Reading Ontario Implements Price Gouging Measures: What You Need to Know

Canada’s antitrust/competition, marketing and foreign investment laws continue to apply despite the global health and economic crisis arising from COVID-19. However, the enforcement of these laws are being significantly impacted by the COVID-19 response. These developments are fast moving and change almost daily.

Fasken’s Antitrust/Competition & Marketing Group continues to monitor these developments very closely.

On 13 February 2020, the Minister of Trade, Industry and Competition (South Africa) brought the long-awaited buyer-power and price discrimination provisions into effect. These provisions were introduced through a suite of amendments made to the Competition Act (the “Act”) in early 2019. They may be summarized as follows:

  • the price discrimination provisions prohibit dominant sellers

It is generally accepted that agreements between competitors to fix prices, allocate markets and collude on tenders almost always have harmful effects on competition. Competition laws in various jurisdictions have, therefore, been drafted to address this and, in turn, agreements or understandings between competitors which provide for price fixing, allocating of markets and / or

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On February 17, 2017, Toronto-based e-books retailer Rakuten Kobo Inc. (“Kobo”) sought judicial review of the consent agreements reached between the Commissioner of Competition (“Commissioner”) and three e-books publishers earlier this year.

The consent agreements reached between the Commissioner and each of Hachette, Macmillan, and Simon & Schuster are aimed at resolving the Commissioner’s concerns

Despite the fact that Canada’s Competition Bureau had concluded that the proposed acquisition of Canexus Corporation by Superior Plus Corp. would likely result in a substantial lessening of competition for the supply of various industrial chemical products in Canada, the Bureau issued a “no action” letter clearing the transaction under the Competition Act because of

Moose International Inc. has filed its response to the Competition Bureau’s recent allegations that Moose had, contrary to paragraph 74.01(1)(a) of the Competition Act, made materially false or misleading “made in Canada” representations with respect to its Moose Knuckles winter parkas.

In its response, Moose has asked that the Competition Tribunal dismiss the Commissioner

The Competition Bureau recently announced that it had taken action under the Competition Act against Moose Knuckles, a Canadian-based manufacturer of premium winter jackets, for alleged deceptive marketing practices associated with its high-end parkas.  The Bureau’s application to the Competition Tribunal alleges that the jackets are marketed as “Made in Canada” when the winter apparel

The Competition Bureau (Bureau) announced yesterday that the Public Prosecution Service of Canada (PPSC) has entered a stay of proceedings against 4 key targets, in one of the Bureau’s most labour-intensive, criminal investigations to date. Indeed, following the Bureau’s 6-year investigation of alleged price-fixing in the chocolate confectionary industry, criminal proceedings against ITWAL Ltd., Mars