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May 7, 1999

Competition Bureau Finds No Evidence of Anti-Competitive Acts in the Canadian Auto Glass Industry

OTTAWA, Canada – The Competition Bureau announced today that, after an extensive examination of the Canadian auto glass industry, it has concluded that there are no grounds to warrant an application to the Competition Tribunal for a remedial order.

The examination took place during the period from December 1997 to March 1999, relying on information provided by numerous complainants, extensive interviews with industry participants, Bureau historical information and publicly available data.

The complainants alleged that directing practices by auto insurance companies and auto glass networks to preferred auto glass shops have favoured auto glass chains and have had anti-competitive effects against independent glass shops. It was also alleged that insurance companies, auto glass networks and auto glass chains conspired to reduce competition unduly in the auto glass market. In addition, complainants claimed that prices established by insurance companies, auto glass networks and auto glass chains were below costs and only for the purpose of forcing independent glass shops to exit the market.

The Bureau looked for any evidence that practices had resulted in substantial lessening of competition. Moreover, we examined whether prices would go up for a sustained period of time above competitive levels because of the use of market power by glass chains. We reviewed the allegations under the following sections of the Act : section 77 (tied selling and exclusive dealing), section 50 (1)(c) (predatory pricing) and section 45 (conspiracy).

“We found that the Canadian auto glass market is highly competitive,” said Konrad von Finckenstein, Commissioner of Competition. “The insurance industry is trying to control costs and, consequently, is using new methods to achieve this objective such as directing to preferred shops and using glass claims networks. Ultimately, consumers have benefited from these practices because the prices of auto glass services have declined.”

On the basis of these facts, there are no grounds to proceed with an application to the Tribunal. The conclusions reached indicate clearly that there is robust competition in the Canadian insurance and auto glass markets. Should future competition issues arise in these sectors, the Bureau will not hesitate to take the appropriate action.

A backgrounder is available on the Competition Bureau website.

For further information, please contact:
Richard Taylor
Assistant Deputy Commissioner
Competition Bureau
(819) 997-1990

source: Competition Bureau News Release