Exam 32: Restrictive Trade Practices

If a corporation attempts to fix base prices for its goods by setting up separate wholly owned corporations in each region to do the selling of those goods at a fixed price, the conspiracy of these corporations to do so with the parent may not be attacked under the Competition Act.

A provincial government wants to widen Highway 2. There are three road construction companies in the region qualified to bid on the project. The companies agree that only one company will bid and then the work will be divided amongst the three contractors. What is this an example of?

Regulation of trade practices is a matter of provincial jurisdiction.

Which of the following are not reviewable activities under the Competition Act?

Cisco developed a carburetor for automobiles, which he called the "CiscoCarb." He advertised the carburetor in a national automobile magazine in a full-page advertisement under a caption that read: "Proven Performance-80 kilometres to a litre of gas in any car." The advertisement offered the carburetor for $100 on a 30-day, money back guarantee. False or misleading advertising of goods is an offence under the Competition Act.

Which type of law is the Competition Act?

The Competition Act provides the right to maintain a common law civil action in certain circumstances. Discuss how this may arise and the course such an action may take.

The Chartered Accountants Society, the governing body of chartered accountants, has set regulations to govern the activities of its members. Which of the following regulations do not violate the Competition Act?

What might be the ground for an action brought by United Parcel Service against Canada Post?

Meat Packers Inc. was a producer of beef and beef by-products that operated a facility outside a large city. The site of the production facility was scheduled to become part of a new six-lane highway. The facility had been expropriated for the highway and Meat Packers had to vacate the premises. It was unable to locate suitable alternative premises on short notice. Meat Packers, therefore, decided to acquire the business of a competitor and shipped all of its equipment to the newly acquired facility. The two companies merged their operations and carried on under the name of Meat Packers Inc. The meat packing industry was currently in a slump, the result of a decline in consumption of red meat. As a result, there was excess capacity throughout the market area. All of the major competitors were located within the same geographic area. All of these factors were keeping meat prices low. When the Commissioner of Competition received notice of the acquisition, he ordered that Meat Packers Inc. divest itself of the competitor's business pursuant to s. 45 of the Competition Act. Meat Packers wishes to oppose the order. Discuss the arguments it will raise in opposition and indicate how you think the situation would be resolved. C.P.R. (3d) 289.

Budget Wrench Co. sold its wrenches to a variety of retail outlets at $1 each. Stony Hardware purchased a large quantity of the wrenches and used them over a six-month period as a special advertised sale item, priced at 25 cents each. Budget Wrench Co. requested Stony Hardware to stop selling its wrenches as a "special" sale item, but Stony Hardware refused to do so. Loss leader advertising constitutes misleading advertising under the Competition Act.

Buns Bakery sold bread and cakes to Peggy's Grocery under an agreement whereby Peggy would not retail the goods for less than the price printed on the wrapper of the products. By their agreement, Buns Bakery would provide Peggy's Grocery with an extra 5% discount at the end of each month, based upon the volume sold at the stipulated retail price during the month. Both Buns Bakery and Peggy's Grocery would appear to have acted in violation of the Competition Act by entering into their agreement.

A manufacturer says the following to a retailer: "Sell these goods at whatever price you desire, but should you sell for less than $50 we shall supply you no more." Such a statement is legal.

Violations of provisions of the Competition Act may be addressed in which of the following ways?

Activities of sellers relating to the distribution and sale of products

Budget Wrench Co. sold its wrenches to a variety of retail outlets at $1 each. Stony Hardware purchased a large quantity of the wrenches and used them over a six-month period as a special advertised sale item, priced at 25 cents each. Budget Wrench Co. requested Stony Hardware to stop selling its wrenches as a "special" sale item, but Stony Hardware refused to do so. Loss leader selling is an offence under the Competition Act.

Restrictive trade practices subject to the Competition Act

Cisco developed a carburetor for automobiles, which he called the "CiscoCarb." He advertised the carburetor in a national automobile magazine in a full-page advertisement under a caption that read: "Proven Performance-80 kilometres to a litre of gas in any car." The advertisement offered the carburetor for $100 on a 30-day, money back guarantee. For the Crown to successfully obtain a conviction against Cisco under the Competition Act, it must prove that the goods do not perform as claimed, and that Cisco was responsible for the misleading advertisement.

Budget Wrench Co. sold its wrenches to a variety of retail outlets at $1 each. Stony Hardware purchased a large quantity of the wrenches and used them over a six-month period as a special advertised sale item, priced at 25 cents each. Budget Wrench Co. requested Stony Hardware to stop selling its wrenches as a "special" sale item, but Stony Hardware refused to do so. Stony Hardware was selling the wrenches as a "loss leader."

An appeal from an order of the Competition Tribunal lies with the Federal Court of Appeal.