The new "refusal to deal": Tribunal rejects GPAY claim

Posted on March 1, 2007

Susan M. Hutton and Ian Disend

Section 75 of the Competition Act addresses the reviewable practice of "refusal to deal." In June of 2002, the Act was amended so as to allow private parties to bring actions under this section before the Competition Tribunal (the Tribunal), where leave has been granted by the Tribunal pursuant to s. 103.1 of the Act. Prior to the 2002 amendments, s. 75(1) had required four conditions to be met before relief could be granted. Pursuant to those amendments, however, a fifth condition was added; namely, that the refusal to deal must have caused or be likely to cause an "adverse effect" on competition in a market.

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Landmark merger review decision from the Competition Tribunal

Posted on March 1, 2007

The Competition Tribunal has dismissed an application by the Commissioner of Competition to delay closing of a transaction between Labatt Brewing Company and Lakeport Brewing Income Fund. Both parties sell beer in Ontario. Stikeman Elliott represented Lakeport on the transaction and before the Competition Tribunal.

On February 1, 2007, Labatt and Lakeport jointly announced a supported offer by Labatt for all of Lakeport's trust units. The parties mailed their offer materials on February 22 and the offer period expired on March 29. The parties also filed long form merger notification materials under the Competition Act - the statutory waiting period relating to those expired on March 26. Lakeport units trade on the Toronto Stock Exchange.

The support agreement included an obligation for Labatt to attempt to negotiate a "hold separate" arrangement with the Commissioner of Competition, if needed, and to take any and all possible steps within the requirements of the support agreement to be able to pay for the units at the earliest possible date, including vigorously resisting any application by the Commissioner to delay closing.

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