Pricing and Distribution

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

On 17 June 2015, the Competition Appeal Court of South Africa (CAC) overturned the Competition Tribunal’s decision which found Sasol Chemical Industries Limited (Sasol) guilty of excessive pricing.

The CAC’s judgment is thorough and the factual, legal, accounting and economic issues covered are complicated. Although redeeming for Sasol, the judgment may give rise to a number of significant implications for future enforcement action against excessive pricing South Africa.

We set out below a review of the questions raised in the decision as well as the potential implications of the CAC’s answers.

The feedstock debate – Actual costs or notional costs?1

The first and potentially most important question addressed by the CAC related to what the CAC referred to as the ‘feedstock debate’. According to the Competition Act2 , a price charged by a dominant firm is excessive and illegal if it has no reasonable relation to the economic value of the product in question.

In conditions of competition, prices will normally be driven down towards a firm’s costs of production (plus a reasonable return). A firm’s costs (including a reasonable return) therefore usually provide an insightful proxy for the price that would prevail under conditions of competition, and therefore a product’s ‘economic value’.

In the only previous excessive pricing case in South Africa, the Mittal case, the CAC held:

economic value is a notional objective market standard, not one derived from circumstances peculiar to the particular firm… The criterion of economic value…recognizes only the costs that would be recovered in long run competitive equilibrium3.

Sasol has a peculiar cost advantage because it procures its feedstock propylene from its sister company – Sasol Synfuels – at a low internal transfer price. Feedstock propylene is a critical input in the production of purified propylene, which is then converted into polypropylene.

One of the key questions in the Sasol case was how
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On December 9, 2014, Bill C-49, the Price Transparency Act, received first reading in the House of Commons. It proposes to amend the Competition Act in two respects.  First, it proposes price transparency measures, pursuant to which the Commissioner of Competition is (i) authorized to conduct inquiries to determine why a product or

On October 3, 2014, the Commissioner of Competition (“Commissioner”) announced the appointment of Rambod Behboodi as the Deputy Commissioner of the Competition Promotion Branch – the new branch within the Competition Bureau (“Bureau”) that will be created as part of the Bureau’s realignment initiative, where its existing eight branches will be consolidated into four.  The

This note summarizes the recent decision of the South African Competition Tribunal, which found Sasol Chemical Industries guilty of excessive pricing.

South Africa is one of the few competition law jurisdictions that actively pursues cases of ‘excessive pricing’ by dominant firms.  The Competition Commission had alleged that Sasol had charged domestic customers excessive prices