Canadian Underwriter

Competition Tribunal denies IBC application that would prevent Ontario used car dealers’ association from accessing vehicle claims history database

March 29, 2012   by Canadian Underwriter

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CORRECTION: An earlier version of this story incorrectly stated the decision came from the Competition Bureau. The decision was in fact from the Competition Tribunal. Canadian Underwriter apologizes for the error. Also, the version below contains updated content, including a statement from the IBC.

Canada’s Competition Tribunal has denied an application by Insurance Bureau of Canada (IBC) to rescind an interim supply order with the Used Car Dealers Association of Ontario (UCDA). The interim order permits the UCDA to access IBC’s ‘Web Claims Search’ for the purpose of searching the accident history of a used automobile.

UCDA is a not-for-profit trade association representing more than 4,500 motor vehicle dealers in Ontario. It provides a variety of services to its members including ‘Auto Check,’ which provides dealers who are selling used cars with information about the accident history of the vehicles they intend to sell.

UDCA’s Auto Check service accesses IBC’s Web Claims Search application, a type of “search engine” that allows users to search a database of information relating to insurance claims. The database contains information from IBC member insurance companies and related entities. UCDA became an associate member of IBC in 1998 and was provided with access to IBC’s Web Claims Search application as part of its status as an IBC member.

IBC defines its Web Claims Search application as a “legacy system,” suffering from a number of significant technological limitations that directly affect its functionality and the IBC’s ability to manipulate the data accessible through it.

For this reason, IBC terminated UCDA’s access to the system in June 2011. As a result, UCDA suspended its Auto Check service and sought leave from the Competition Tribunal to restore access.

The tribunal encouraged the parties to agree to an interim supply order while it considered the case. An interim supply order came into force in October 2011, renewing UCDA’s access to the Web Claims Search on an interim basis.

Two weeks after the supply order came into effect, State Farm, a member of IBC, said it did not consent to the provision of its data that forms part of the Web Claims Search database to the UCDA or any other third party, citing company policy.

IBC argued that, given the antiquated functionality of the system, implementing State Farm’s direction could only be done by rescinding the interim supply order, or by eliminating State Farm’s data from the Web Claims search application, which would diminish its value to all users.

In denying IBC’s application to rescind the interim supply order, the tribunal found that State Farm’s objection to UCDA’s access “seems to be unduly convenient in frustrating the Interim Supply Order. The fact that State Farm’s data continues to be available to Carproof, a competing service to UCDA, and one which pays more, raises more questions than answers.”

The Competition Tribunal further ruled that: “IBC knew of the limitations of the legacy computer system when it consented to the Interim Supply Order. Nevertheless, it chose to make the commitment. To that extent, IBC is the ‘maker of its own mischief.’”

IBC noted in a statement that the Competition Tribunal’s decision did not address the merits of UCDA’s application. Rather, the decision was in relation to interim supply arrangements between IBC and UCDA.

“A hearing before the Tribunal on the merits of UCDA’s application has yet to be held,” IBC says in its statement. “Given that this matter remains actively before the Competition Tribunal, it would be premature and inappropriate for IBC, or anyone else, to comment further at this time.”

The full decision can be read at: