Reference: The Used Car Dealers Association of Ontario v. Insurance Bureau of Canada, 2011 Comp. Trib. 10

File No.: CT-2011-06

Registry Document No.: 29

IN THE MATTER of the Competition Act, R.S.C. 1985, c. C-34, as amended;

AND IN THE MATTER of an Application by the Used Car Dealers Association of Ontario for an Order pursuant to section 103.1 granting leave to make application under sections 75 and 76 of the Competition Act.

BETWEEN: Used Car Dealers Association of Ontario (applicant) and Insurance Bureau of Canada (respondent)

Decided on the basis of the written record

Before Judicial Member: Simpson J. (Chairperson)

Date of Reasons and Order: September 9, 2011

Reasons and Order signed by: Madam Justice Sandra J. Simpson

REASONS FOR ORDER AND ORDER GRANTING THE APPLICANT LEAVE TO FILE AN APPLICATION PURSUANT TO SECTION 75 OF THE COMPETITION ACT

I.  THE APPLICATION

[1]  The Used Car Dealers Association of Ontario (the “UCDA”) seeks leave from the Competition Tribunal (the “Tribunal”) to commence an application pursuant to section 75 and subparagraph 76(1)(a)(ii) of the Competition Act, R.S.C. 1985, c. C-34 (the “Act”). The proposed application names the Insurance Bureau of Canada as the respondent.

II.  THE DECISION

[2]  For the following reasons leave has been granted to commence an application under section 75 of the Act. However, leave to proceed under section 76 has been denied.

III.  THE APPLICANT

[3]  The UCDA was founded in 1984. It is a not-for-profit trade association which represents more than 4500 motor vehicle dealers in Ontario. The UCDA provides a variety of services to its members including one called Auto Check™ (“Auto Check”). It provides dealers who are selling used cars with information about the accident history of the vehicles they intend to sell. Using a vehicle’s VIN number, a dealer who is a member of the UCDA pays a fee of $7.00 (before taxes) to conduct an Auto Check vehicle accident history search.

[4]  The UCDA’s evidence for this application is found in an affidavit sworn by Robert G. Beattie on June 29, 2011 (the “Beattie Affidavit”). Mr. Beattie is the UCDA’s Executive Director.

IV.  THE RESPONDENT AND ITS DATABASES

[5]  The Insurance Bureau of Canada (the “IBC”) is a national not-for-profit industry association which represents home, vehicle and business insurers. The IBC is, according to the UCDA, the only source of integrated industry wide data collected from all insurers who sell auto insurance as well as from independent adjusters and investigators. The data are located on a database which IBC describes as its Web Claims Search Application. However, that database does not include information about the dollar value of claims made when vehicles are in accidents. Those values are found in information provided to IBC by its members and collected in a second IBC database called the Automotive Statistical Plan (“ASP Database”).

V.  THE BACKGROUND

[6]  In 1998, the UCDA became an Associate Member of the IBC primarily to gain access to the information in IBC’s Web Claims Search Application. That information is a critical input into UCDA’s Auto Check business.

VI.  OTHER PROVIDERS OF VEHICLE ACCIDENT SEARCHES

[7]  3823202 Canada Inc., carrying on business as CarProof (“CarProof”), began to provide vehicle accident searches in 2005. It is now the market leader and its searches cost $34.95 (Cdn) before taxes.

[8]  In 2008, CARFAX, Inc. (“Carfax”), an American based provider of vehicle accident histories, began to sell them in Ontario. It charges $34.99 (U.S.) before taxes.

[9]  Both CarProof and Carfax purchase IBC’s data for their accident history searches and, according to the Beattie Affidavit, they are both able to provide the dollar value of claims as part of their search results.

[10]  The relationship between Auto Check and CarProof has, from the UCDA’s perspective, been troubled. The UCDA took CarProof to court to prevent it from misrepresenting the services offered by Auto Check. In the end, a settlement achieved Auto Check’s objective. CarProof has also twice (in 2009 & 2010) tried to persuade the UCDA to enter into a partnership in which the Auto Check service would be terminated and CarProof would supply vehicle accident histories to UCDA’s members. The UCDA refused to entertain these proposals because it believes that its members place a high value on their ability to purchase inexpensive vehicle accident histories through Auto Check.

VII.  REGULATORY CHANGES

[11]  On January 1, 2010, changes to the regulations under the Ontario Motor Vehicle Dealers Act, 2002, S.O. 2002, c. 30, Schedule B, required motor vehicle dealers to disclose to potential purchasers whether a used vehicle had ever suffered damage which cost more than $3000.00 to repair.

[12]  To assist its members to meet this new obligation, the UCDA decided to try to obtain additional information from IBC about the dollar value of insurance claims. IBC has that information on its ASP Database. The Beattie Affidavit describes the UCDA’s early efforts to secure this information in paragraphs 21 and 25-28:

In early June 2009, in anticipation of these [Regulatory] changes, Robert Pierce, the UCDA's Director of Member Services, contacted Marti Pehar, Manager, Business Partnerships, of IBC by telephone and requested that IBC expand the scope of the information it provided to Auto Check™ to include dollar value claims information.

I understand from Mr. Pierce that he met with Ms. Pehar on June 16, 2009 to discuss Auto Check™’s request for dollar value claims information. Although UCDA had indicated its willingness to compensate IBC for the provision of this additional information, on June 24, 2009, Ms. Pehar informed Mr. Pierce that IBC had refused UCDA's request. I understand and believe that at that time IBC provided, and presently continues to provide, similar information directly or indirectly to CarProof.

On May 17, 2010 Warren Barnard, UCDA's Legal Services Director, and I met with Ralph Palumbo, IBC Vice-President - Ontario, and Randall Bundus, IBC Vice-President -Operations and General Counsel, and renewed Auto Check™'s request for dollar value claims information. Mr. Palumbo stated that he did not see any reason why IBC would not provide this information to UCDA. Mr. Bundus indicated that IBC would need to obtain authorization from its member insurers in order to provide the ASP information to UCDA.

The requirement to obtain insurer consents in respect of dollar claims data came as a surprise to UCDA because this has never been an issue with the Web Claims Search application. Nevertheless, on May 20, 2010, I wrote to Mr. Palumbo and formally requested that IBC seek the requisite authorization from its member insurers to provide the ASP dollar value claims information to Auto Check™.

In a letter dated May 26, 2010, Mr. Bundus wrote to me to state that IBC would not seek the authorization UCDA had requested to supply dollar claims data from its insurer members. Instead, Mr. Bundus indicated that UCDA should contact each insurer member of IBC in order to obtain individual consents for provision of dollar claims information.

[The emphasis is mine]

VIII.  THE TERMINATION OF THE UCDA’S ACCESS TO IBC’s WEB CLAIMS SEARCH APPLICATION

[13]  The Beattie Affidavit deals with this subject and the UDCA’s ongoing efforts to secure consents in paragraphs 28-37. There he says:

[In a letter dated May 26, 2010] …, without any prior warning, Mr. Bundus informed me that IBC was terminating UCDA's Associate Membership, thereby ending the 12-year relationship between the parties and Auto Check™'s ability to continue to obtain the claims data from the Web Claims Search application.

On June 2, 2010, my colleague Warren Barnard wrote to Mr. Bundus expressing the UCDA's shock over the unexplained and unforeseen termination of its Associate Membership, and requesting that the IBC reconsider its decision. In the alternative, Mr. Barnard requested an extension of the termination notice period to six months (i.e., to November 26,2010) in order to (i) allow the UCDA a reasonable opportunity to contact the individual insurers whose authorization would be required for UCDA to obtain ASP information from IBC, and (ii) continue using the Web Claims Search application.

In the absence of a reply to Mr. Barnard's letter, on June 9, 2010, McMillan LLP, external counsel to UCDA, wrote to Mr. Bundus expressing UCDA's concerns that IBC's conduct raised issues under the Competition Act and reiterating UCDA's request that IBC reconsider the termination of UCDA's membership and its ability to source vehicle claims data (or, alternatively, extend the notice period to six months).

On June 23, 2010, McMillan LLP again wrote to Mr. Bundus, requesting that IBC grant the six-month extension and, in the meantime, provide UCDA with further particulars as to the form and content of the insurer authorizations required by IBC in order to supply the ASP information to Auto Check™. Mr. Bundus replied on June 28, 2010 providing information about the form of authorization required, but refusing to reconsider IBC's termination of UCDA's membership and provision of the Web Claims Search application, or UCDA's request for an extension of the notice period.

After further discussions and emails, IBC reinstated UCDA's Associate Membership and ability to use the Web Claims Search application until November 26, 2010. UCDA also began a process of contacting numerous insurers to obtain consent for IBC to provide ASP information to UCDA, something that has never been required to use the Web Claims Search application.

Between July 2010 and May 2011, UCDA obtained consents from insurers in respect of ASP information, and was also dealing with IBC on a range of contractual, technical and logistical issues related to ASP information. UCDA's Associate Membership has continued on a month to month basis as did its ability to use the Web Claims Search application.

On April 18, 2011, UCDA signed a Service Provider Agreement with IBC for the provision of ASP information from consenting insurers. UCDA was then in a position to seek consent from three insurers who had apparently withdrawn their earlier consents. However, UCDA was not made aware until May 30, in an email from James Fordham, Director of Customer Service at IBC, to Neil Elgar, UCDA's Manager of Administrative Services, that several other insurers had withdrawn their consents in the period from January to March, 2011. Mr. Fordham did not explain how the withdrawals occurred or why UCDA was not informed about them many months earlier when the withdrawals took place.

On June 7, 2011, Mr. Fordham informed Mr. Elgar by email that IBC would be terminating use of the Web Claims Search application. IBC gave notice that termination would take place on June 10, 2011, although after subsequent correspondence between Messrs. Elgar and Fordham, the date was extended to June 17, 2011. Mr. Fordham did not give a reason for the termination or for the briefness of the notice period.

On June 9, 2011, Mr. Barnard communicated with Mr. Bundus and requested continuing provision of the Web Claims Search application, for which insurer consents had never been required, while UCDA pursued consents from insurers for supply of the ASP information. On June 16, 2011, McMillan LLP reiterated Mr. Barnard's request in voicemail and email messages to Mr. Bundus.

On June 16, 2011, UCDA advised its members that the Auto Check™ searches would be suspended effective June 17, 2011 until further notice due to the inability to obtain supply of sufficient data to provide vehicle accident history searches. On June 17, 2011 at 5:00 pm IBC terminated supply of the Web Claims Search application to UCDA.

[The emphasis is mine]

IX.  THE EFFECT OF THE TERMINATION

[14]  The termination on June 17, 2011 (the “Termination”) ended a 13 year arrangement which had cost the UCDA $65,000.00 in annual dues plus $16,000.00 which the UCDA provided to IBC in June of 2007 to help finance upgrades to IBC’s database. As well, in 2010, IBC added a fee for the information supplied to the UCDA from the Web Claims Search Application. The UCDA has always paid IBC as required.

[15]  The Termination also caused the UCDA to suspend its Auto Check business.

X.  THE FUTURE OF AUTO CHECK

[16]  The UCDA takes the position that its Auto Check service would again be viable if it had the data from the Web Claims Search Application. In other words, although it would have been helpful, the UCDA’s members do not need the dollar value claims information from the ASP Database because, according to the Beattie Affidavit, approximately 2/3 of the searches show that vehicles have not been in accidents. Further, where accidents have occurred, the UCDA’s member dealers are free to exercise judgment about whether the damage would have cost below or above $3000.00 to repair. In other words, dealers don’t usually need the dollar value of the claims. However, the Beattie Affidavit concedes that, in the small number of situations in which a precise dollar value is needed, dealers can purchase the more costly searches from CarProof or Carfax which include the dollar amounts.

XI.  PART I – SECTION 75 – REFUSAL TO SUPPLY

[17]  Subsection 103.1(7) sets out the test for granting leave under section 75 of the Act. It reads:

103.1 (7) The Tribunal may grant leave to make an application under section 75 or 77 if it has reason to believe that the applicant is directly and substantially affected in the applicants' business by any practice referred to in one of those sections that could be subject to an order under that section.

103.1 (7) Le Tribunal peut faire droit à une demande de permission de présenter une demande en vertu des articles 75 ou 77 s’il a des raisons de croire que l’auteur de la demande est directement et sensiblement gêné dans son entreprise en raison de l’existence de l’une ou l’autre des pratiques qui pourraient faire l’objet d’une ordonnance en vertu de ces articles.

[18]  The law is clear that there must be sufficient credible evidence to give rise to a bona fide belief (i) that an applicant is directly and substantially affected by the refusal to supply and (ii) that an order could be made under subsection 75(1)(a-e) of the Act (Symbol Technologies Canada ULC v. Barcode Systems Inc., 2004 FCA 339, at paragraph 16, and National Capital News Canada v. Milliken, 2002 Comp. Trib. 41, at paragraphs 14-15).

XII.  THE PRODUCT

[19]  The UCDA says that the product is IBC’s Web Claims Search Application and notes that it has the following distinguishing features:

• The data are available to the UCDA without the need to secure consents from the parties who provide the data.
• It includes integrated industry wide claims data.
• It is offered through IBC’s web portal.
• It does not include information about the dollar value of claims.

[20]  The UCDA says that the Web Claims Search Application is the product that has been refused, and that, for the reasons described above in paragraph 16, it is a viable product which meets the needs of the UCDA’s members in almost all situations.

[21]  The IBC takes a different view and says that the product at issue is the right to access IBC’s Web Claims Search Application and that the product is therefore properly characterized as a license. IBC says that, because the Tribunal held in Canada (Director of Investigation and Research) v. Warner Music Canada Ltd., 78 C.P.R. (3d) 321, that licenses are not products for the purpose of section 75 of the Act, an order could not be made.

[22]  However, I have not been persuaded by this submission. There is no evidence to suggest that IBC ever characterized its arrangements with the UCDA as a license. The evidence is that access to the Web Claims Search Application data was incidental to the UCDA’s Associate Membership in IBC.

[23]  In the alternative, IBC submits that the proper product market is “vehicle insurance claims data” and that data of that kind is available in both IBC’s Web Claims Search Application and in its ASP Database.

[24]  Evidence about the contents and attributes of the ASP Database is sparse but it does appear that the UCDA could use the ASP data to operate Auto Check if it were available. In this regard, the Beattie Affidavit says at paragraph 40:

The Web Claims Search application will remain critical to the Auto Check™ business unless and until UCDA is able to obtain consents from individual insurers to access sufficient ASP information to offer a viable vehicle accident history search service.

[25]  As noted above, the Beattie Affidavit shows that the UCDA initially approached IBC asking only for the dollar values of claims on the ASP Database and IBC refused. However, UCDA’s request appears to have changed over time into one for access to all the ASP data. This change may have been motivated by IBC’s first decision to terminate UCDA’s access to the Web Claims Search Application in May 2010. In any event, IBC subsequently agreed to give the UDCA access to the ASP Database but said that consents were required from the insurance companies whose data are found therein (the “Consent(s)”). IBC initially offered to secure the Consents from its members.

[26]  However, IBC changed its mind and, instead of providing the Consents itself, required the UCDA to approach each insurance company for its Consent. The UCDA undertook this exercise and, over a period of almost one year, from July 2010 to May 2011 it secured many Consents. On April 18, 2011, the UCDA signed a Service Provider Agreement with IBC for the provision of ASP information from consenting insurers. When the agreement was signed, the UCDA knew that three insurers who had consented had withdrawn their earlier Consents. However, it was not until the end of May 2011 that IBC told the UCDA that several other Consents had also been withdrawn earlier in the year. No reasons were provided. Without those Consents, the UCDA does not have access to sufficient ASP data to make the ASP Database a viable alternative for the data on IBC’s Web Claims Search Application.

[27]  Given these facts, I find that the Tribunal could conclude that the fact that access to the ASP Database requires Consents, which are not readily available, means that it is not in the same product market as the Web Claims Search Application data for which no Consents are required.

[28]  For this reason, I have decided that the Tribunal could conclude that the vehicle insurance claims data from IBC’s Web Claims Search Application is the product at issue in this application.

[29]  IBC also says that, even if the data on the Web Claims Search Application is the product, leave should be denied because the UCDA fails to consistently describe the product it says is at issue. IBC notes that the data the UCDA received before the Termination is variously described as:

• Web Search claims data.
• Vehicle Insurance claims data
• Supply from the IBC Web Claims Search Application
• Vehicle Insurance Claims data

[30]  In my view, there is no lack of clarity. In spite of the various descriptions provided, it is clear that the UCDA is speaking of the data it has received since 1998 using IBC’s Web Claims Search Application.

XIII.  DIRECTLY AND SUBSTANTIALLY AFFECTED – SUBSECTION 103.1(7)

[31]  The Beattie Affidavit shows that Auto Check’s business accounted for more than 50% of the UCDA’s net income in the year ended December 31, 2010. As well, Mr. Beattie says that Auto Check is a service which the UCDA’s members consider to be “critical” and that it has been suspended as a consequence of the Termination. In my view, this evidence is sufficient to show that, as a result of the Termination, the UCDA is directly and substantially affected in its business. While it may be useful to consider earnings over time as the Tribunal suggested in Nadeau Poultry Farm Ltd v. Groupe Westco Inc., 2009 Comp. Trib. 6, aff’d 2011 FCA 188, I do not accept IBC’s submission that such data is required. Further, it is noteworthy that subsection 103.1(7) reads in the present tense and that the UCDA has provided current information.

XIV.  THE MEANING OF “COULD”

[32]  I now turn to the question of whether an order could be made under section 75 and I think it useful at this juncture to reflect on the meaning of the word “could”. The context is important. The question of whether an order “could” be made is being considered in an application for leave which is not supported by a full evidentiary record. Parliament decreed that an applicant would file an affidavit and a respondent would file representations. This means that there will inevitably be incomplete information on some topics. As well, the process is to be expeditious and the burden of proof is lower than the ordinary civil burden which is “a balance of probabilities”.

[33]  In my view, the lower threshold means that the question is whether an order is “possible” and “could” is used in that sense.

[34]  In deciding whether an order is possible the Tribunal must assess whether there is sufficient credible evidence to give rise to a bona fide belief that an order is possible. However, given the context described above, it is not reasonable to conclude that hard and fast evidence is required on every point. In my view, reasonable inferences may be drawn where the supporting grounds are given and circumstantial evidence may be considered.

XV.  THE UCDA’S INABILITY TO OBTAIN ADEQUATE SUPPLIES OF A PRODUCT ANYWHERE IN A MARKET ON USUAL TRADE TERMS 75(1)(a)

[35]  The UCDA says that IBC is the only supplier of integrated insurance claims data. IBC disputes this saying that the UCDA could acquire the information it needs for its Auto Check business from CarProof and Carfax. However, in my view, the Tribunal could not conclude that the phrase “anywhere in a market” is intended to require the UCDA to purchase the data it needs from Auto Check’s competitors.

[36]  IBC also says that the UCDA has failed to define the geographic market. However, since the UCDA’s members are in Ontario and, since the used vehicle accident histories are sought for their use, it is reasonable to conclude Ontario is the geographic market and that an order could therefore be made.

[37]  Finally, with respect to usual trade terms, the evidence shows that the UCDA is willing to continue to pay IBC and since the Web Claims Search Application data is only available from IBC, this aspect of the test is met and an order could be made.

XVI.  INSUFFICIENT COMPETITION AMONG SUPPLIERS – 75(1)(b)

[38]  In my view, because IBC is the sole supplier, the Tribunal could conclude that the UCDA’s inability to secure the data on IBC’s Web Claims Search Application is due to insufficient competition.

XVII.  THE PERSON REFERRED TO IN PARAGRAPH (A) IS WILLING AND ABLE TO MEET THE USUAL TRADE TERMS OF THE SUPPLIER OR SUPPLIERS OF THE PRODUCT – 75(1)(c)

[39]  There is no question that the UCDA is prepared to continue to pay for the Web Claims Search Application data. In these circumstances, I find that the Tribunal could conclude that this test has been met.

XVIII. THE PRODUCT IS IN AMPLE SUPPLY – 75(1)(d)

[40]  The Beattie Affidavit shows that IBC was able to reinstate the UCDA’s associate membership and its access to the Web Claims Search Application after the initial termination of the UCDA’s membership on May 26, 2010. Thereafter, it continued supplying the data on a month to month basis until the Termination. Based on this evidence, the Tribunal could conclude that the product is in ample supply.

XIX.  THE REFUSAL TO DEAL IS HAVING OR IS LIKE TO HAVE AN ADVERSE EFFECT ON COMPETITION IN A MARKET – 75(1)(e)

[41]  In my view, the Tribunal could find that IBC’s refusal to supply the Web Claims Search Application has caused Auto Check’s exit from the market. Since Auto Check was the low cost provider of accident claims searches to approximately 4500 used car dealers and, since it is reasonable to conclude that these dealers will now be forced to purchase more expensive searches from CarProof or Carfax, the Tribunal could find that the test is met.

XX.  PART II – PRICE MAINTENANCE – 76(1)(a)(ii)

[42]  The test for leave to bring applications under section 76 of the Act is found in subsection 103.1(7.1). It says that the Tribunal must have reason to believe that an applicant is directly affected by any conduct that could be the subject of an order.

[43]  For the reasons given in paragraph 31 above, I have concluded that the UCDA is directly affected by the closure of its Auto Check business.

[44]  The more difficult question is whether I can conclude that an order “could” be made under subparagraph 76(1)(a)(ii) in the absence of any direct evidence in the Beattie Affidavit showing that IBC’s refusal to supply its Web Claims Search Application data to the UCDA is a result of Auto Check’s low pricing. The only evidence before the Tribunal is circumstantial.

[45]  Some of the circumstantial evidence described below relates to the actions and affiliations of two companies called CGI Group Inc. (“CGI”) and i2iQ Inc. (“i2iQ”)

[46]  In its submissions the UCDA says at paragraph 25:

UCDA is unable to establish definitively, without discovery pursuant to the Tribunal’s rules, whether IBC’s refusal to supply occurred because of concerns about Auto Check™’s low pricing policy. However, there is significant circumstantial evidence related to the large difference between Auto Check™ and CarProof prices, the actions of CarProof, connections between CarProof and i2iQ and communications between i2iQ and IBC, that provides reason to believe that IBC’s refusal to supply occurred because of Auto Check™’s low pricing policy.

[47]  Further in its reply submissions the UCDA said at paragraph 39:

In this situation, the circumstantial evidence that IBC was acting to benefit CGI, with whom it has a preferred business relationship, and which in turn has a close business relationship with i2iQ and CarProof, is the only evidence on the record related to the reasons for IBC’s refusal to supply. It is noteworthy that, as Mr. Beattie indicated in his affidavit, IBC did not provide reasons when it terminated supply to UCDA, and again in its Representations IBC has remained silent about any other reasons for the termination. UCDA submits that in such a situation an adverse inference should be drawn from IBC’s silence and/or the “sufficient credible evidence” test should be applied in a manner which allows potentially viable claims to proceed and be tested on the merits rather than be frustrated by the Applicant’s inability to access relevant evidence in the possession of the Respondent during the leave stage.

[48]  While I accept that circumstantial evidence and reasonable inferences may be relied on, the question is whether the circumstantial evidence in this case meets the requirement that there be sufficient credible evidence to give rise to a bona fide belief that the conduct could be subject to an order.

[49]  The UCDA relies on four pieces of circumstantial evidence to show that the Termination was because of UCDA’s $7.00 price contrasted with CarProof’s price of $34.95. I will deal with each in turn.

A.  The Price Difference

[50]  The evidence shows that CarProof has twice approached the UCDA with a view to acquiring its dealers as its customers. These approaches failed because the UCDA believes that its members prefer Auto Check’s low priced searches. Accordingly, CarProof’s searches will only be attractive to the UCDA’s members if Auto Check’s low cost searches are no longer available.

[51]  The evidence, which is said to suggest that the Termination was due to Auto Check’s low price, is as follows:

• CarProof doesn’t deal directly with IBC to obtain its ASP data. It deals through an intermediate company. Mr. Beattie speculates that that company is either i2iQ or CGI or perhaps both. CGI is contractually linked to IBC because CGI operates the ASP Database for IBC and provides other data services to IBC members. One service is called Auto Plus and it provides information to assist insurers when making decisions about coverages and premiums. Another service is Enhanced Auto Plus. It includes vehicle claim histories from CarProof.
• I2iQ’s website also offers CarProof’s vehicle claim history searches and says that i2iQ has a partnership or strategic alliances with CarProof and with a division of CGI called CGI Insurance Information Services. However, there is no evidence about whether i2iQ has a contractual relationship with IBC.

[52]  If CGI is the intermediary between CarProof and IBC, the Tribunal is asked to speculate that, because CGI provides important data services to IBC, IBC will be inclined to do a favour for CGI by helping its customer, CarProof. This would be accomplished by refusing to supply data to its low cost competitor Auto Check.

[53]  Regarding i2iQ, the evidence shows (i) that i2iQ’s CEO is able to say to IBC that UCDA’s dealers could purchase data from CarProof, (ii) that i2iQ and IBC were in prompt telephone contact about the UCDA’s request for dollar claims information and (iii) that i2iQ has a partnership or strategic alliance with a division of CGI. This information suggests to me that i2iQ has a degree of control over CarProof and that i2iQ has a close relationship with IBC and may be the intermediary selling IBC’s data to CarProof. If those facts were true, I must infer that IBC would be inclined to do a favour for i2iQ by, in turn, helping its customer CarProof. Again, this would involve refusing to supply the Web Claims Application Search data to Auto Check.

B.  CarProof’s Actions

[54]  These are described in the following paragraphs taken from paragraphs 13-15 of the Beattie Affidavit:

CarProof has grown substantially and is the market leader in the supply of vehicle accident history searches in Ontario. In 2004, CarProof began distributing false and misleading promotional materials to motor vehicle dealers in Canada, which misrepresented the nature and scope of UCDA’s lien search and other services. Following written warnings from UCDA’s legal counsel, CarProof abandoned this negative campaign. It again began distributing false and misleading promotional material in 2007 in connection with UCDA’s services including its Auto Check™ service. I believe that this may have been motivated in whole or in part by UCDA’s position as the low-price supplier in the market. UCDA’s efforts to resolve the situation out of court were unsuccessful, leading it to commence litigation against CarProof. That litigation was ultimately settled in 2009, with CarProof and UCDA issuing a joint statement in which CarProof acknowledged that UCDA provides accident claim information through its Auto Check™ service and undertook not to make misleading statements in the future.

In early 2009, representatives of CarProof approached UCDA and proposed that UCDA partner with CarProof to provide CarProof vehicle accident histories to UCDA members rather than doing so directly through the Auto Check™ business. Such a proposal, if adopted, would have meant the end of the Auto Check™ business. Bearing in mind CarProof’s aggressive business tactics and the significantly higher prices at which it provides vehicle accident history searches, UCDA concluded that a relationship with CarProof was not in the best interests of its members and declined the CarProof proposal.

In early 2010, representatives of CarProof again approached UCDA and requested that UCDA partner with CarProof to provide CarProof vehicle accident histories to UCDA members, rather than doing so directly through the Auto Check™ business. UCDA’s views on such a relationship had not changed, and we again rejected CarProof’s overtures.

[55]  In sum, the evidence indicates that CarProof appears to have misrepresented Auto Check’s business and has suggested closing it down. However, these efforts have failed because of Auto Check’s low price.

C.  Connections Between CarProof and i2iQ

[56]  This topic is dealt with above in paragraphs 51 and 53.

D.  Communications Between i2iQ and IBC

[57]  In June 2009, the UCDA contacted Ms. Pehar of IBC to ask for access to the dollar value claims information in the ASP Database. Shortly thereafter, the CEO of i2iQ spoke to Ms. Pehar and advised her that UCDA could purchase CarProof vehicle history reports and confirmed that he could be contacted if the UCDA wanted to pursue the idea. In the alternative, he suggested that the UCDA could speak directly to CarProof.

[58]  The Beattie Affidavit speculates that IBC must have told i2iQ or CarProof of UCDA’s request and that the only reason IBC, CarProof and i2iQ were in contact, after the UCDA asked for access to the dollar value claims information, was because they were concerned that, with this information, Auto Check would be a more effective low cost competitor.

XXI.  CONCLUSIONS

[59]  Against this background, it is clear that IBC has a close direct relationship with CGI (through its provision of services and maintenance of the ASP Database) and with i2iQ (it spoke to it about the UCDA’s request for dollar value claims data). It is also clear that CGI and i2iQ have close ties to CarProof. Its searches are provided to IBC’s members through CGI, and i2iQ appears to have some control over CarProof’s operations and sells its searches through its website.

[60]  Finally, it is reasonable to conclude based on its past conduct, that CarProof would like to see Auto Check’s low cost business closed so that the UCDA’s dealers could become potential customers for CarProof’s searches.

[61]  However, while I can conclude that it is possible that the Termination occurred as a result of IBC’s wish to support CarProof’s business objectives as a favour to either CGI or i2iQ, I cannot conclude that there is sufficient credible evidence to show the possibility that the Termination by IBC was due to Auto Check’s low pricing policy. In these circumstances, an order could not be made.

ORDER

[62]  The UCDA is hereby granted leave, pursuant to subsection 103.1(7) of the Act, to commence an application under section 75 of the Act. However, leave to apply under section 76 of the Act is denied.

[63]  The UCDA is to have its costs fixed as a lump sum amount payable forthwith based on Column III of Tariff B of the Federal Courts Rules, SOR/98-106. The UCDA is to prepare a bill of costs for review by IBC and, if an amount cannot be agreed, the Registry may be contacted and I will fix the amount once a procedure has been agreed.

DIRECTION

[64]  The parties are to consult to see if they can agree about whether an interim supply order can be made and, if so, on what terms. Failing agreement, the Registry may be contacted to discuss arrangements for the hearing of the UCDA’s application for interim relief.

DATED at Ottawa, this 9th day of September, 2011.

SIGNED on behalf of the Tribunal by the Chairperson.

(s) Sandra J. Simpson

COUNSEL:

For the applicant:

Used Car Dealers Association of Ontario

A. Neil Campbell

Casey W. Halladay

For the respondent:

Insurance Bureau of Canada

Peter Glossop

Graham Reynolds

Geoffrey Grove