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York University (12,359)
ADMS 2610 (76)
Chapter 3


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York University
Administrative Studies
ADMS 2610
Robert Levine

ADMS2610 Session 10 Chapter 33 (pg. 640-653) Restrictive Trade Practices Purpose of Restrictive Trade Practices - Maintain free competition - Forces of competition and the free market should regulate industry rather than the government o Control those activities that restrict or interfere with competition - Originally governed by the common law o Restraints of trade which were unreasonable or contrary to public interest were actionable at law - Competition Act o Most of the control of anti-competitive activity is found within this act o General Purpose:  Prohibits combinations or conspiracies that prevent or lessen competition  Reviews mergers or monopoly actions that may operate to the detriment of the public  Establishes unfair business practices Nature of the Legislation - Nature o Blend of criminal and administrative approaches  Some practices prohibit and subject to criminal proceedings  Some practices subject to review and control o Civil remedies  For those injured by such practices which are prohibited - Investigation o Commissioner of Competition  Investigates complaints  Wide powers of search and seizure  Right to compel information - Competition Tribunal o Part of enforcement process o Lay members and federal court judges o Can issue orders, with force of a judgment of a court o Can investigate and review certain business practices o Must make inquiry first Restrictive Trade Practices - Application of the Act o Applies to goods and services o Exemptions exist:  If goods and services under a regulator body - Categories of Restrictive Trade Practices: o (1) Nature of the business organization itself o (2) Dealing between a firm and its competitors o (3) Dealings between a firm and its consumers Mergers and Firms in a Dominant Position - Dominant Position o A firm that controls a major segment of a market for a product or service  By eliminating competitors by aggressive activity  Merging with competitors o Any merger or monopoly likely to lessen competition to detriment of public is subject to review and intervention by Competition Tribunal o Mergers or monopolies that substantially control the market have potential for abuse o Criminal burden too high to be successful so most fall under protection of competition Conspiracies and Combinations in Restraint of Trade - Conspiracy o Agreement between firms to unduly lessen competition o Fines and imprisonment for violations o Need not prove complete or virtual elimination of competition but only that it will lessen or have the effect of likely lessening competition - Exemptions o Export of products o Services – standards of competence or integrity o Banking – certain types of activities but not all o Affiliated corporations - Bid Rigging o A practice whereby contractors, in response to a call for bids or tenders, agree amongst themselves as to the price or who should bid or submit a tender o A restrictive trade practice, unless the person calling for the bids is advised of the arrangement o Eliminates secret arrangements o Not an offence if the fact is revealed to the person calling for the bids
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