Final Submissions Filed with Competition Tribunalin Canada Pipe Abuse of Dominance Proceeding
Following a hearing in the spring of 2004, the Competition Tribunal (the Tribunal) received this past August the final submissions of the Parties in Canada Pipe1.
Market Definition in Dispute
In his 2002 Application, the Commissioner alleged that a "Stocking Distributor Program" (the Program) operated by Canada Pipe's Bibby Ste-Croix Division ("Bibby") was substantially lessening or preventing competition among manufacturers and importers in the markets for cast iron drain, waste and vent (DWV) pipe, fittings and mechanical joint couplings (the "Products"), in six Canadian regions2. During the period from 1998 to 2002, Bibby accounted for more than 85% of total sales of the Products in Canada and for 80% or more of total sales of the Products in each of the six geographic markets. The Program provided preferential discounts and rebates to customers who purchased the Products exclusively from Bibby.
The pleadings reveal that the Commissioner and Canada Pipe disagree fundamentally as to whether cast iron DWV pipe, fittings and couplings constitute markets separate and distinct from those for DWV pipe, fittings and couplings manufactured from other materials. Moreover, the Parties disagree on the process for and, indeed, even the necessity of, defining a relevant product market as an exercise separate from the assessment of power within that market. According to the Commissioner, "[w]here there is direct evidence of market power [eds: e.g., the ability to charge supra-competitive prices for a considerable period of time], a separate analysis of indirect indicators of market power (including the process of market definition) is redundant."3
If the Commissioner is indeed suggesting that the product market need not be defined separately from an assessment of market power, it would arguably mark a change in the method of legal analysis from that which was followed in previous abuse of dominance cases4, and in the Abuse of Dominance Guidelines5. Ultimately, as with so many such issues, the case will be decided on its own unique facts. Given the length of the submissions to date, the Tribunal appears to be amply supplied with those.
FOOTNOTES
[1] The Commissioner of Competition v. Canada Pipe Company Ltd./Tuyauteries Canada Ltée, CT-2002-006.
[2] The six regions are B.C., Alberta, the Prairies (Saskatchewan and Manitoba), Ontario, Quebec and Atlantic Canada, and correspond to the six different pricing zones established by Bibby.
[3] Canada Pipe, Memorandum of Argument in Reply of the Commissioner, dated August 10, 2004, at para. 79.
[4] See, for example, Director of Investigation and Research v. Tele-Direct (Publications) Inc., CT-1994/003, Reasons and Order dated February 26, 1997, at p. 34: "A necessary first step in deciding this case is to define the relevant market. This must be done for purposes of section 79 ."
[5] To view the Enforcement Guidelines on the Abuse of Dominance Provisions, (Ottawa: Industry Canada), section 3.2.1. CLICK HERE
