Canada Pipe Case Settled, Abuse Of Dominance Provision Remains Unresolved

On December 20, 2007, the Competition Bureau announced the end to five years of litigation concerning the Stocking Distributor Program (SDP) of Canada Pipe Company Ltd. with the filing of a consent agreement with the Competition Tribunal. The consent agreement pre-empts the Tribunal's re-determination proceedings in the case.† As a result, the proper legal approach to the Competition Act's abuse of dominance provision, in light of the Commissioner of Competition's position in the proceedings, has yet to be resolved.

The SDP is a loyalty program under which Canada Pipe offers rebates and discounts to distributors that purchase all of their requirements for cast-iron pipe, cast-iron fittings and mechanical joint couplings (collectively known as cast-iron "drain, waste and vent" or DWV products) exclusively from Canada Pipe. Under the terms of the consent agreement, Canada Pipe will implement and offer a modified rebate program to distributors in Canada as an alternative to the SDP, which Canada Pipe may continue to offer. The modified rebate program will provide rebates and multiplier discounts to distributors meeting a minimum purchase requirement, but will not be conditional on exclusive purchases of DWV products from Canada Pipe. Significantly, total rebates and discounts under the SDP (or any other rebate program) are not to exceed those available under the modified rebate program, although Canada Pipe retains the right to offer additional price concessions or discounts "on an as-needed basis in order to match what Canada Pipe believes to be legitimate...