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Refusal to Deal

Refusal to Deal involves with situations where a buyer cannot obtain supplies of an available product on usual trade terms and is, as a result, substantially affected in his ability to conduct business with the result that competition is adversely affected. Any company has the basic right to set up its distribution channels as it sees fit. There is no obligation to supply all comers. There are valid business reasons for a company to, for example, establish a policy whereby it will put a limit on the number of retailers that it will supply in a given area. In terms of refusals to deal, the Act may come into play only under certain conditions, primarily: a) the party refused is substantially affected in his business by his inability to obtain supply, b) this inability is because of insufficient competition among suppliers of the product, and c) the refusal is likely to have an adverse effect on competition in a market.

Recent amendments to the Competition Act allow, subject to certain conditions, private parties to take matters directly to the Competition Tribunal for adjudication. Where the matter involves issues covered in section 75 (refusal to deal) or section 77 (exclusive dealing/tied selling), the new section 103.1 provides that "any person" may apply for leave to make an application. The primary criterion in considering the merits of any such matter is whether your business has been directly and substantially affected by the practice or policy at issue.