The Insurance Corporation of British Columbia (ICBC) Removes Restrictive Provision from Agreements with Repair Shops

OTTAWA, November 2, 1999 — ICBC has agreed to withdraw the "Most Favoured Customer" clause from agreements it has with auto body shops that participate in the Corporation's Alternative Transportation Program (ATP). Removing this clause will resolve the Competition Bureau's concerns under section 79, the abuse of dominant position provision of the Competition Act.

Under the ATP, which began in 1997, participating repair shops agreed to provide courtesy cars to ICBC's customers in return for specified payments. The "Most Favoured Customer" clause in the ATP agreement required the repair shop to charge ICBC no more than the shop charged other insurance companies.

Information obtained from a number of insurance companies and published sources showed that in this case the "Most Favoured Customer" clause discouraged selective discounting by repair shops. Based on this effect, the Bureau was concerned that the clause substantially lessened competition in markets for insured auto body repair services. In addition, by raising the costs of ICBC's rivals, the clause likely lessened competition in the optional auto insurance market in B.C.

With the change in ICBC's conduct, the Bureau has concluded its examination.

ICBC is a provincial crown corporation which provides mandatory basic automobile insurance to all residents of British Columbia and competes with other insurance companies in supplying optional auto insurance products.

ICBC co-operated fully with the Bureau throughout the examination.

A transcript of ICBC's advice to its accredited repair facilities is available here.
(PDF 51 KB)

For more information, please contact:
Richard Taylor
819-997-1990