Refusal to deal

There is no absolute obligation on any business to supply to, or buy a product from, another business. However, under certain circumstances, if a business refuses to supply another business, section 75 of the Competition Act may apply.

For the Act to apply, the following requirements must be met:

  • The would-be customer shows that the business has been substantially affected, or that she or he is unable to carry on business as a result of not being able to obtain adequate supplies of a product on usual trade terms.
  • The inability to obtain adequate supplies must result from a lack of competition among suppliers.
  • The would-be customer must be willing and able to meet the supplier's usual trade terms.
  • The product must be in ample supply.
  • The refusal to supply has an adverse effect on competition in a market, or is likely to do so.

Where appropriate, the Commissioner will open discussions to obtain voluntary compliance. A more formal solution would involve the registration of a consent agreement with the Competition Tribunal. If voluntary compliance cannot be achieved, the Commissioner may file an application before the Tribunal for an order to remedy the situation. To overcome the effects of a refusal to supply, the Tribunal may issue an order requiring that one or more suppliers accept the customer who was refused supply.

The Act allows a person to apply directly to the Tribunal for a hearing when it believes that the actions of a supplier meet all the requirements under the refusal to supply provisions.

For more information

Date modified: