Competition Act (R.S.C., 1985, c. C-34)

Act current to 2014-04-02 and last amended on 2010-03-12. Previous Versions

Exclusive Dealing, Tied Selling and Market Restriction

Marginal note:Definitions
  •  (1) For the purposes of this section,

    “exclusive dealing”

    « exclusivité »

    “exclusive dealing” means

    • (a) any practice whereby a supplier of a product, as a condition of supplying the product to a customer, requires that customer to

      • (i) deal only or primarily in products supplied by or designated by the supplier or the supplier’s nominee, or

      • (ii) refrain from dealing in a specified class or kind of product except as supplied by the supplier or the nominee, and

    • (b) any practice whereby a supplier of a product induces a customer to meet a condition set out in subparagraph (a)(i) or (ii) by offering to supply the product to the customer on more favourable terms or conditions if the customer agrees to meet the condition set out in either of those subparagraphs;

    “market restriction”

    « limitation du marché »

    “market restriction” means any practice whereby a supplier of a product, as a condition of supplying the product to a customer, requires that customer to supply any product only in a defined market, or exacts a penalty of any kind from the customer if he supplies any product outside a defined market;

    “tied selling”

    « ventes liées »

    “tied selling” means

    • (a) any practice whereby a supplier of a product, as a condition of supplying the product (the "tying" product) to a customer, requires that customer to

      • (i) acquire any other product from the supplier or the supplier’s nominee, or

      • (ii) refrain from using or distributing, in conjunction with the tying product, another product that is not of a brand or manufacture designated by the supplier or the nominee, and

    • (b) any practice whereby a supplier of a product induces a customer to meet a condition set out in subparagraph (a)(i) or (ii) by offering to supply the tying product to the customer on more favourable terms or conditions if the customer agrees to meet the condition set out in either of those subparagraphs.

  • Marginal note:Exclusive dealing and tied selling

    (2) Where, on application by the Commissioner or a person granted leave under section 103.1, the Tribunal finds that exclusive dealing or tied selling, because it is engaged in by a major supplier of a product in a market or because it is widespread in a market, is likely to

    • (a) impede entry into or expansion of a firm in a market,

    • (b) impede introduction of a product into or expansion of sales of a product in a market, or

    • (c) have any other exclusionary effect in a market,

    with the result that competition is or is likely to be lessened substantially, the Tribunal may make an order directed to all or any of the suppliers against whom an order is sought prohibiting them from continuing to engage in that exclusive dealing or tied selling and containing any other requirement that, in its opinion, is necessary to overcome the effects thereof in the market or to restore or stimulate competition in the market.

  • Marginal note:Market restriction

    (3) Where, on application by the Commissioner or a person granted leave under section 103.1, the Tribunal finds that market restriction, because it is engaged in by a major supplier of a product or because it is widespread in relation to a product, is likely to substantially lessen competition in relation to the product, the Tribunal may make an order directed to all or any of the suppliers against whom an order is sought prohibiting them from continuing to engage in market restriction and containing any other requirement that, in its opinion, is necessary to restore or stimulate competition in relation to the product.

  • Marginal note:Damage awards

    (3.1) For greater certainty, the Tribunal may not make an award of damages under this section to a person granted leave under subsection 103.1(7).

  • Marginal note:Where no order to be made and limitation on application of order

    (4) The Tribunal shall not make an order under this section where, in its opinion,

    • (a) exclusive dealing or market restriction is or will be engaged in only for a reasonable period of time to facilitate entry of a new supplier of a product into a market or of a new product into a market,

    • (b) tied selling that is engaged in is reasonable having regard to the technological relationship between or among the products to which it applies, or

    • (c) tied selling that is engaged in by a person in the business of lending money is for the purpose of better securing loans made by that person and is reasonably necessary for that purpose,

    and no order made under this section applies in respect of exclusive dealing, market restriction or tied selling between or among companies, partnerships and sole proprietorships that are affiliated.

  • Marginal note:Where company, partnership or sole proprietorship affiliated

    (5) For the purposes of subsection (4),

    • (a) one company is affiliated with another company if one of them is the subsidiary of the other or both are the subsidiaries of the same company or each of them is controlled by the same person;

    • (b) if two companies are affiliated with the same company at the same time, they are deemed to be affiliated with each other;

    • (c) a partnership or sole proprietorship is affiliated with another partnership, sole proprietorship or a company if both are controlled by the same person; and

    • (d) a company, partnership or sole proprietorship is affiliated with another company, partnership or sole proprietorship in respect of any agreement between them whereby one party grants to the other party the right to use a trade-mark or trade-name to identify the business of the grantee, if

      • (i) the business is related to the sale or distribution, pursuant to a marketing plan or system prescribed substantially by the grantor, of a multiplicity of products obtained from competing sources of supply and a multiplicity of suppliers, and

      • (ii) no one product dominates the business.

  • Marginal note:When persons deemed to be affiliated

    (6) For the purposes of subsection (4) in its application to market restriction, where there is an agreement whereby one person (the "first" person) supplies or causes to be supplied to another person (the "second" person) an ingredient or ingredients that the second person processes by the addition of labour and material into an article of food or drink that he then sells in association with a trade-mark that the first person owns or in respect of which the first person is a registered user, the first person and the second person are deemed, in respect of the agreement, to be affiliated.

  • Marginal note:Inferences

    (7) In considering an application by a person granted leave under section 103.1, the Tribunal may not draw any inference from the fact that the Commissioner has or has not taken any action in respect of the matter raised by the application.

  • R.S., 1985, c. C-34, s. 77;
  • R.S., 1985, c. 19 (2nd Supp.), s. 45;
  • 1999, c. 2, ss. 23, 37, c. 31, s. 52(F);
  • 2002, c. 16, ss. 11.2, 11.3.