Deck 3: Government Regulation of Business

Question 1

The four companies that sell bulk-rate diesel to farmers in the Saskatoon area have consistently moved together (up or down)with the same prices.It has been suggested that they have conspired together to keep prices the same.Might they be prosecuted under the Competition Act?

A)Yes,they might be,since there is prima facie evidence of a conspiracy.
B)Yes,they might be,since this is a good example of the practice of parallel pricing.
C)No,they would not be,because the conspiracy cannot be implied.
D)No,they would not be,because their intent must be proved.
E)Yes,they might be,because an agreement can be inferred from the actual behaviour.

Answer 1

E

Question 2

Bill and Ted are engaged in the business of selling bottled water.Bill's company operates in northern Ontario.Ted's company operates in southwestern Ontario.They are the main suppliers of bottled water in their respective areas.Ted decides to open a new office in northern Ontario in order to compete directly with Bill.Prior to the office opening,Bill and Ted bump into each other at a convention.They have a short discussion about business over dinner and agree orally that neither one of them will ever try and move into the other's existing territory.They shake hands and leave.The nature of the agreement entered into by Bill and Ted

A)constitutes abuse of dominant position.
B)constitutes the offence of bid-rigging.
C)constitutes the anti-competitive behavior of predatory pricing.
D)constitutes a breach of section 45 of the Competition Act.
E)is an offence under section 46 of the Competition Act implementing in Canada a directive or instruction from a person outside Canada.

Answer 2

D

Question 3

Competitors can in fact enter into an agreement whereby each will discontinue producing a current product.If the efficiencies created for the market by this "specializing agreement" make up for any lessening of competition,the competitors may

A)freely proceed with the plan to discontinue the product.
B)apply to the Competition Tribunal and obtain approval of the agreement.
C)do nothing to legalize the effect of the specializing agreement.
D)apply for approval of what would otherwise be considered parallel pricing.
E)be liable for engaging in bid-rigging.

Answer 3

B

Question 4

In Canada,agriculture and immigration are

A)under the exclusive jurisdiction of the federal government.
B)not provided for in the constitution.
C)within the jurisdictions of both federal and provincial governments.
D)under the exclusive jurisdiction of the provincial government.
E)none of the above

Question 5

A large private nuclear facility began discharging radioactive water into the local lake whose waters were used to cool down the reactors.In this case

A)the company has committed an offence under environmental legislation and it may be fined.
B)the company's directors may defend on the basis of due diligence.
C)the company's officers may defend on the basis of due diligence.
D)the company's directors and officers may have committed an offence under environmental legislation and may be fined.
E)all of the above

Question 6

Regarding government regulations,a distinction is sometimes made between direct regulation and social regulation.Which of the following would be a social regulation?

A)rate of return on deposits
B)standards of safety at amusement parks
C)production levels of utilities
D)pricing of brokerage services
E)import quotas on textiles

Question 7

A is a student at a local university found guilty of plagiarism under the rules of the university senate.A's case was heard by a panel of professors created under the rules,who did not allow A to defend himself or to be represented by counsel.In this case,on a judicial review hearing of the matter

A)A will succeed on the grounds of procedural irregularity.
B)A will succeed on the grounds of unfairness.
C)A will not succeed at all.
D)A has no standing to ask for judicial review.
E)A will succeed on the grounds that the panel exceeded its authority.

Question 8

John and Tony are brothers.They each own their own construction companies.They fiercely compete with one another for business.As a result of a call for tender by the local municipality to quote on certain road and sewer work,John and Tony decided to briefly discuss in advance of submitting their individual bids,a "reasonable range" of bids each should submit in response to the tender.Although neither one of the brothers believes they have committed any wrongdoing,they have in fact

A)committed anti-competitive behavior known as abuse of dominant position.
B)violated section 47 of the Competition Act dealing with bid-rigging.
C)engaged in parallel pricing.
D)engaged in discriminatory pricing.
E)by their conduct engaged in merger.

Question 9

Edward is an arbitrator appointed under the Arbitration Act.Procedure under the Act is set out in another statute,which makes it mandatory that arbitration briefs be filed by each party to the arbitration.In an arbitration hearing held yesterday,only one party was permitted to file an arbitration brief,but Edward decided that the other brief was unnecessary and rendered his decision.On a judicial review hearing of Edward's decision

A)Edward's decision will be set aside for failure to comply with fairness.
B)Edward's decision will be set aside for an error in law.
C)Edward's decision will not be set aside.
D)Edward's decision will be set aside for procedural irregularity.
E)Edward's decision will be set aside for exceeding his authority.

Question 10

A provincial government is attempting to determine which of three sites in the province might be used to dispose of hazardous waste.In furtherance of this determination,representatives of local municipal governments where the sites are located meet with the provincial environment minister.During the meeting,the largest local municipal government advises the minister that if the site in their area is not chosen,it will ensure that its entire population will vote for the minister in the next provincial election and will contribute heavily to his campaign.A few weeks later,a different site is chosen.In this case,the largest local municipal government

A)has bribed the minister under the Canadian Environmental Protection Act.
B)has bribed the minister under the Corruption of Foreign Public Officials Act.
C)has bribed the minister under the environment legislation of the province where the sites are situated.
D)has bribed the minister under the Criminal Code of Canada.
E)has not bribed the minister at all.

Question 11

A law that applies restrictions on advertising,but does NOT prohibit it,is probably

A)void under provincial legislation.
B)not valid under the Charter of Rights and Freedoms.
C)valid under the Charter of Rights and Freedoms.
D)void under federal legislation.
E)none of the above

Question 12

Carla owns Nifftee Dry Cleaners.If she is guilty of misleading advertising,who is the most likely to report her?

A)a disgruntled consumer using provincial legislation
B)a government agency with the power to prohibit such advertising
C)the Services Act of the province of jurisdiction
D)provisions of the Competition Act
E)a class action lawsuit

Question 13

Jack manufactures woollen winter sweaters,which are not selling very well in areas of Canada that have been warmer than usual.In order to improve his sales,George removes the tags from all of the sweaters identifying them as wool,and then sells them as summer sweaters.In this case,George has committed an offence under

A)the Hazardous Products Act.
B)the Criminal Code.
C)the Food and Drug Act.
D)the Textile Labelling Act.
E)the Competition Act.

Question 14

Under contract law,a provision in the contract for restricting trade will be struck down by the court if it

A)prevents a former employee from going into business for him- or herself in competition with his or her previous employer.
B)unreasonably restricts competition.
C)is a business partner competing with a former associate.
D)reasonably protects the new owner of a business against the former owner.
E)has no consequence.

Question 15

Administrative bodies created by statute must provide a basic level of procedural fairness to those persons likely to be affected by any decision.At a minimum,procedural fairness includes all of the following EXCEPT

A)the right to be heard.
B)access to relevant documents.
C)adequate notice of any public hearing.
D)an impartial decision maker.
E)legal aid to those who cannot afford a lawyer.

Question 16

The Competition Act creates a number of criminal offences punishable by fines and imprisonment.The Act prohibits competitors from entering into agreements that hurt competition in their industry which are generally described as conspiracies.Criminal conspiracies include all of the following EXCEPT

A)price fixing.
B)market allocation.
C)restriction of supply.
D)telemarketing.
E)sport professional restraint of play.

Question 17

The term or phrase used to describe an area in which both the federal and provincial governments have jurisdiction is

A)concurrent jurisdiction.
B)separation of powers.
C)supremacy.
D)diplomacy.
E)paramountcy.

Question 18

Even if it is determined that a proposed merger will substantially and detrimentally lessen competition,it may still be justified on the grounds of

A)economic efficiency.
B)diversification.
C)reduced competition.
D)monopolization.
E)acquisition.

Question 19

A law that prohibits any form of association between two or more businesses is probably

A)not valid under the Charter of Rights and Freedoms.
B)valid under the Charter of Rights and Freedoms.
C)void under federal legislation.
D)void under provincial legislation.
E)none of the above

Question 20

At a convention of builders in Toronto,a proposal was adopted whereby whenever there was a call for tenders from the provincial government,members would check with each other before submitting their tenders to ensure that only the tenders of companies that needed the work would be accepted.This case is an example of

A)discriminatory practice.
B)price parallelling.
C)abuse of dominant position.
D)bid-rigging.
E)exclusive dealing.

Question 21

A dual offence is an offence under the Competition Act that may be either

A)a civil action or regulatory offence.
B)a criminal or regulatory offence.
C)a regulatory offence or a provincial offence.
D)a criminal offence and civil action.
E)a bait-and-switch.

Question 22

The Canada Consumer Product Safety Act (CCPSA)applies to manufacturing,importing,selling,and distributing,and applies to a broad range of products.The CCPSA also provides for all of the following EXCEPT

A)mandatory disclosure of defect incidences.
B)increasing penalties for non-compliance.
C)expanding criminal liability to include directors and officers.
D)banning unsafe products and setting standards of quality for others.
E)expressly providing to the consumer a civil cause of action for damages.

Question 23

For the merger of two large competing companies to be approved,there must

A)have been a pre-notification to Parliament.
B)be barriers to prevent new competitors from entering the market.
C)still be effective competition after the merger.
D)be no evidence of foreign competition in the market.
E)be good economic health in the target firm.

Question 24

Generally speaking,the conspiracy provisions of the Competition Act do not apply to professionals.

Question 25

Tied-selling is an example of monopolizing.

Question 26

As a response to high pressure door-to-door sales methods,most provinces have enacted legislation making direct sales contracts non-binding on consumers.A direct sales contract is one in which the contract is formed

A)at a consumer's residence.
B)at a consumer's place of employment.
C)at a place other than the business's place of business.
D)at the business's place of business.
E)at a salesperson's residence.

Question 27

To enforce environmental protection laws is no small or easy matter.The enforcement usually involves

A)primarily a private matter,but one where government agencies are empowered to enforce.
B)requiring polluters to refrain from harmful activities,to remedy existing situations,and to pay for the costs of clean-up.
C)situations where public authorities are over-zealous with a wide variety of enforcement mechanisms,which they apply abusively.
D)the responsibility of corporations,since they are the major polluters.
E)the common law tort of nuisance.

Question 28

Parallel pricing is an example of monopolizing.

Question 29

The fact that prices among competitors in a particular industry tend to go up or down at the same time and by approximately the same amount does not necessarily mean that there is a conspiracy.

Question 30

Any agreement that lessens or has the potential to lessen competition may be reviewed by the Competition Bureau,and the Commissioner of Competition may seek enforcement proceedings before the Competition Tribunal seeking such orders including all of the following EXCEPT

A)a cease and desist order.
B)any order requiring some form of corrective or modifying action.
C)fines or imprisonment imposed on parties unless they fail to comply with tribunal orders.
D)a private cause of action for damages based on the legislation.

Question 31

Which of the following statements is TRUE concerning environmental protection?

A)Although both federal and provincial governments regulate the environment,municipalities also have authority to pass by-laws to provide local environmental protection.
B)The most important legislation is the Unified Canadian Environmental Protection Act,which has been adopted by each province.
C)Common law has many applications to pollution problems.
D)Major environmental disasters have failed to make the public aware of the dangers associated with humans' interaction with the environment.
E)So far,only a few of the provinces have general environment protection laws.

Question 32

Consumer protection statutes create regulatory offences that require mens rea and usually allow the due diligence defence.

Question 33

With respect to environmental law,the most important federal legislation is contained in the Canadian Environmental Protection Act (CEPA).Any contravention of the CEPA or its regulations

A)may be a criminal offence.
B)carries a maximum fine of one million dollars.
C)may include three years' imprisonment as well.
D)may include clean-up costs.
E)all of the above

Question 34

A voluntary code of conduct created to supplement legislation is as binding as the legislation itself.

Question 35

Bait-and-switch advertising is both a criminal and a regulatory offence.

Question 36

Today,environmental impact assessment review is a mandatory step in developing land.

Question 37

In appropriate circumstances,a company that has a monopoly can be found guilty of conspiracy under the Competition Act.

Question 38

The provisions of the Competition Act relating to anti-competitive practice can be grouped under three main headings.These do NOT include

A)conspiracies.
B)monopolizing.
C)mergers.
D)regulation of professions.

Question 39

Since most major polluters are corporations,which cannot be sent to prison,the statutes cannot impose personal liability on corporate directors and officers.

Question 40

In the case of an abnormal environmental report,the person who owns or controls the substance or activity has a duty to report and take remedial action.

Question 41

Explain the dilemma created by the constitution when it comes to the enactment of federal and provincial legislation designed to regulate commercial transactions and thus protect consumers,as well as its effect.

Question 42

Regarding deceptive advertising,which is better,to give government agencies the power to prohibit,such as advertising and impose fines against sellers,or to give consumers an arsenal of remedies for stopping,such advertising?

Question 43

Why is there a need to make many consumer-protection offences dual offences?

Question 44

The Canadian federal government organized its consumer protection legislation,culminating in 2011 with the implementation of the Canada Consumer Products Safety Act (CCPSA).What is the CCPSA,and what activities does it focus on?

Question 45

Explain horizontal and vertical mergers.

Question 46

On what basis can a merger be approved even though it has been shown that it will substantially lessen competition?

Question 47

On what basis can the courts challenge the legality of administrative acts and decisions?

Question 48

What does it mean when distribution practices such as exclusive dealing,tied selling,and market restriction are said to be "reviewable"?

Question 49

In addition to remedies provided by consumer protection legislation,what civil remedies can be employed?

Question 50

Sometimes consumers ignore protections intended for their benefit.Briefly discuss the rise of Uber and how public support for this manner of private transportation impacted on municipalities response to public demands.

Question 51

Briefly discuss both public and private options for the enforcement of environmental standards.

Question 52

What is one major problem that is faced by federal,provincial,and municipal governments when it comes to regulating business?

Question 53

In relation to price fixing,what is parallel pricing?

Question 54

Paul is a licensed plumber who provides residential plumbing service.He advertises in the yellow pages and in the classified section of the local newspaper.It is claimed that his advertising is deceptive.Is he subject to the provisions of the federal Competition Act? Explain.

Question 55

In administrative proceedings,what are the overriding principles to be employed?