Friday, February 7, 2014

Group Buying—A Canadian Case Study

Neil Campbell, Jun Chao Meng, James Musgrove, and Francois Tougas (McMillan) offer Group Buying—A Canadian Case Study.

ABSTRACT: Historically, group buying has been treated more leniently under Canadian competition law than coordination between competing sellers. This is, in part, because such arrangements are often viewed as procompetitive. However, a recent (and rare) group buying case had challenged this generally accepted view before the case was overturned on appeal. In 321665 Alberta Ltd. v. ExxonMobil Canada Ltd. and Husky Oil Operations Ltd. (Husky Oil ),1 the Alberta Court of Queen’s Bench ruled that two joint purchasers unduly lessened competition and contravened the conspiracy offense; the Alberta Court of Appeal disagreed. Although the final outcome was correct, both decisions rely on some non-germane factors and fail to provide a coherent framework for assessing the competitive effects of purchaser collaborations. In our view, the case should have been analyzed using a coherent economic framework, such as the Competition Bureau’s enforcement guidelines, which, with perhaps one exception, properly take into account the procompetitive effects that often arise from group buying.

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