Competition Bureau completes investigation into Enercare’s water heater rental contracts

From: Competition Bureau Canada

September 19, 2019 – OTTAWA, ON – Competition Bureau

Today, the Competition Bureau announced that it has discontinued its investigation into Enercare Inc.’s water heater rental contracts and return practices. The Bureau has issued a position statement summarizing this investigation and the reasons for its discontinuance.

The evidence gathered by the Bureau does not clearly demonstrate that Enercare’s rental contracts substantially lessen or prevent competition, which is one of the Competition Act’s requirements for a behaviour to constitute abuse of dominance. Similarly, the evidence did not establish that Enercare’s return practices are anti-competitive. As its enforcement decisions are based on the available evidence, the Bureau could not justify making an application to the Competition Tribunal at this time.

However, the evidence suggests that Enercare’s rental contract practices could raise concerns under the Competition Act in certain circumstances. Should new and compelling evidence come to light, the Bureau will take action to ensure consumers can receive the full benefits of a competitive and innovative marketplace.

Quick facts

  • This investigation follows a series of enforcement actions that began in the early 2000s:

    • In 2002, the Competition Tribunal issued a consent order requiring Enbridge Services (later known as Direct Energy) to review a number of its rental water heater return policies and procedures.
    • After the Tribunal’s order expired in 2012, the Bureau launched a new investigation when Direct Energy introduced similar policies and procedures that the Bureau viewed as anti-competitive.
    • In 2014, Enercare acquired Direct Energy’s water heater portfolio and the Bureau obtained written commitments from Enercare that it would end Direct Energy’s alleged anti-competitive return policies and procedures.
    • The Bureau launched this latest investigation in 2017, following the receipt of numerous customer complaints about Enercare’s water heater return policies, contracting practices, and alleged breaches of the 2014 commitments.
  • The Bureau continues to monitor this market and to analyze the numerous complaints it receives from consumers and businesses. In three of the past four years, various rental water heater companies have generated the most complaints concerning abuse of dominance received by the Bureau.

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