McGILL
LAW JOURNAL
VOLUME 9
MONTREAL, 1963
NUMBER 2
TOWARDS RECONSIDERATION IN ANTI-COMBINES
LAW AND POLICY
Maxwell Cohen, Q.C.*
I. Historical and Functional Perspectives
Many pressures are now impinging upon the conventional wisdom of our
anti-combines traditions and are compelling a re-examination of their validity.,
In a sense this policy has been paradoxically both a powerful and vulnerable
instrument of indirect regulation of entreprenurial activity and almost always
it has been under a critical public and political eye. Then too, it is the one
area where law and economic policy and theory touch with the directness of
an embrace, for the objective of anti-trust law is the removing of restrictions
on, and the preservation of, “competition”; while, conversely, the existence
of the “market”, of competition from a general social point of view, is regarded
as a substantial necessity for a free political order and social system.2 In no
other field of legal studies, policy and practice –
except for criminal law and
criminology perhaps –
is there such a frontal co-mingling of the disciplines
as in this sustained effort to prevent, through law, “undue” restrictions on
competitive behaviour. Courts and law teachers –
certainly the latter at
*Of the Bars of Quebec and Manitoba; Professor of Law and Director of the Institute of Air and
Space Law, McGill University; Chairman, McGill Conferences on the Future of Canadian Com-
petition 1957-63.
‘See the recent statements by the Hon. Donald Fleming with regard to possible studies and revisions
of the Combines Investigation Act, particularly Can. H. of C. Debates, Dec. 17, 1962, p. 2717; also
Gosse, The Law on Competition in Canada (1962), p. 9-10; Kilgour, Cases and Materials on Unfair Com-
petition and Restrictive Trade Practices (1962), p. i-vi; Dobson, Monopoly and Competition in English
and Canadian Law (M.C.L. thesis 1959, McGill University), p. 361-371.
2Corvin Edwards, Maintaining Competition (1949), passim; Machlup, The Political Economy of Mono-
poly (1952); Chamberlin, The Theor of Monopolistic Competition, 7th ed., (1956); Robinson, The
Economics of Imperfect Competition (1933); Bums, The Decline of Competition (1935); Adams, “The ‘Rule
of Reason’: Workable Competition or Workable Monopoly?” (1954) 63 Y.L.J. 348; Skeoch, “The
Combines Investigation Act: Its Intent and Application” (1956) 22 C.J.E.P.S. 17; Stykolt, “Combines
Policy: An Economist’s Evaluation” (1956) 22 C.J.E.P.S. 38.
McGILL LAW JOURNAL
(Vol. 9
least – must possess some familiarity with theories of competition, “perfect”
and “imperfect”, “workable” and “effective”. Even if Canadian judges have
eschewed economic esoterica, they cannot avoid drawing gross conclusions
about the nature of a competitive economy that this system of rules attempts
to regulate or preserve. Similarly, economists taking if not all knowledge, at
least all economic behaviour, for their province, are driven to acknowledging
and evaluating the role of law in controlling business behaviour and preserving
a market economy; and thus they often find themselves interpreters of a very
sophisticated branch of common and statute law to the point of frequently
suggesting, by their liberties with legal concepts and jargon, how dangerous
is a little knowledge. But economists are surely no worse than judges or
lawyers whose rough manners with economics often hinder the progressive
application of anti-trust policy to the facts of business life, in the course of
attempting to maintain, by law, a so-called free and competitive economic
system.
The pressures for “revisionism”
in this field, therefore, come from both
within and without –
from within by way of the theorists and the social
engineers, economists, lawyers and administrators, who think about and
operate the system; and from without through the influences of business,
labour, organized agriculture and, fleetingly, from the unorganized consumer.3
And overlaying both these intrinsic and extrinsic pressures is the now almost
classical mythology that surrounds anti-trust thought and practice. 4 For it
has long been assumed by this mythology that economic power exercised by
way of industrial concentration or combination or restrictive trade practices,
is “evil”- morally offensive and legally proscribed. This pervasive mystique
has penetrated so widely in both the United States and Canada that it has
become an accepted value to which most opinion genuflects without many
daring, until recently, to reopen the basic assumptions involved. 5 Indeed, it
is probably fair to say that there is no single political party in Canada that
would take the risk of openly advocating revisionism even though from time
to time amendments are proposed, grievances expressed and statutory changes
actually made some of which, in recent years,6 have begun to suggest major
alterations in the course of Canadian policy –
in themselves reflecting possible
shifts in public opinion.
‘See House of Commons, Proceeding before the Standing Committee on Banking and Commerce,
Minutes of Proceedings and Evidence with respect to Bill C-58, June-July 1960.
4Arnold, The Folklore of Capitalism (1937); Galbraith, The Affluent Society (1958), p. 40; Berle,
Twentieth Century Capitalist Revolution (1954).
5Galbraith, op. cit., at 349; Bladen and Stykolt on Friedmann, The Canadian Anti-Trust Laws (1956),
p. 45; Berle, op. cit., passim.
6See the general attitude of all parties on the course of the debate on the second reading of Bill
C-58 dealing with the 1960 amendments to the Combines Investigation Act, in Can. H. of C. Debates,
July 25-26, 1960, pp. 6897-7016.
No. 23
ANTI-COMBINES LAW AND POLICY
There are many well understood reasons for this mixture of emotional
adherence to, as well as of rational support for, these broad rules of combines
control. Historically, the roots of the rules are to be found deep in ancient
distrusts of unfair economic advantage. That celebrated trilogy of medieval
offenses, “forestalling”, “regrating” and “engrossing”, 7 together with the
Calvinist search for the “just price”,’ demonstrate how early was the anxiety
of the townsman not to be exploited for his food and his clothing. Similarly,
the medieval landowner was afraid of exploitation by labour and the sharp
lesson of supply and demand, accentuated by the Black Death, led to the
Statute of Labourers’ in the mid-14th century to prevent any premature form of
collective bargaining.
These pre-modern fears had, later on, other economic experiences, now
mixed with political anxieties, to buttress them as modern England moved
forward from Elizabethan commerce to the industrial revolution. The concept
of “monopoly” becomes involved in the constitutional crisis emerging at the
end of Elizabeth I and the beginning of the Stuarts.10 The word “monopoly”
itself acquired a bad name because it stood for the royal effort by way of the
prerogative to grant a trading advantage and so added another argument in
the battle of Commons and common law against the royal power. Commerce
and constitution thus were united in the struggle, and the freedoms sought for
in both, though differing at times in their relative legal and political emphasis,
were parallel courses to be run until joined fully together in the success of
19th century laissez-faire and of a triumphant Parliament to which the pre-
rogative was now subordinated. The 18th and 19th centuries, too, saw the
rise of contractual relations where the new and freer commercial spirit intro-
duced notions of “public policy” into the common law to limit the restraints
that the right to contract could exercise over the right to trade –
contracts
between those selling a business and promising to compete no more or those
leaving an employer and promising to avoid the region in the same trade.
Thus, Mitchell v. Reynolds” and its successors opened wide the door to for-
bidding unreasonable restraints and fashioned a crude public policy by which
to judge enforceability. Then, too, by the middle of the 19th century the
earlier ambiguities in the ancient doctrine of “conspiracy”’12 also began to
suggest a modern form so that, in tort, conspiracy now could become a basis
for regulating business conduct intended to harm another 13 while in crime it
7Gosse, op. cit., at p. 15-17; Dobson, op. cit., at p. 22-25; Cohen, “The Canadian Anti-Trust Laws-
Legislative and Doctrinal Beginnings” (1938) 16 Can. B. Rev. 439.
8Holdsworth, A History of English Law (1938), XI, at p. 468; Tawney, Religion and the Rise of
Capitalism, 2nd ed., (1947); Weber, The Protestant Ethic and The Spirit of Capitalism (Reprint, 1952).
‘Cohen, op. cit., at 441.
1 For a full account see Dobson, op. cit., at p. 46-70.
11(1711) 1 P. Wins. 181; 24 E.R. 347; and particularly the judgment of Tindal, C.J. in Homer v.
Graves (1831) 7 Bing. 735 at 743; Hitchcock v. Coker 112 E.R. 167, at 174-175. The development is
set out in detail by Gosse, op. cit., at p. 42-67.
1Gosse, op. cit., p. 17-39.
‘ 3Mogul S.S. Co. v. McGregor Gow & Co. [1892] A.C. 25;
McGILL LAW JOURNAL
[Vol. 9
still was formidable enough to require a statute to protect or to legalize the
emerging trade union movement” from the rigours of the ancient offence “to
conspire”. Not unexpectedly, by the end of the 19th century, British courts
had evolved a double standard of business freedom in contrast to labour
restrictions. 15
It must be remembered that in general this common law tradition was
equally operative in Canada (in the common law provinces) and the United
States; but different conditions soon accounted for the efforts in both countries,
by 1889-90,16 to provide a new basis in law for the regulation of collective
economic action by businessmen. The whole spirit of this Canadian and
United States’ legislative effort, directed against monopolies and combinations,
thus had linguistic and doctrinal roots in a long progression of ideas and
experiences stemming from these medieval early and late modern concepts in
English law. But these North American statutes derived even more immediately
from the vital differences in North American society, differences of an economic,
social, and political nature. Tariff policy, the frontier, the egalitarian climate,
and the fear of the farmer-pioneer of suffering from unequal terms of trade in
contrast with the protected manufacturer, artisan and townsman, all of these
were factors pressing upon legislatures to move more positively than did the
common law to define the rules of the competitive game.’ 7
Those first legislative rules, in Canada at least, were primitively admin-
istered in the years 1889-1925 when neither the older Criminal Code provisions
nor the later Combines Investigation Act of 191018 were able to satisfy the
anxieties of a watchful urban and rural public now concerned with the effects
of well-protected industry, itself freer from the full competition of the wider
world. Even from 1925 onward, Canadian anti-combines policy and admin-
istration had moved only fitfully until recent years when the momentum of a
more rigorous enforcement had reached sufficient intensity to re-awaken the
business community to the potential dimensions of the program and to raise
questions about the relevancy of policy and law to modern economic realities.
The language of the emerging dialogue about the present and future course
of Canadian economic policy now begins to reflect a sharper tone of business
anxiety. In the first days of this legislation and even up to five or ten years ago,
the agreed objective had been to prevent business abuses by regulating the
freedom to combine, to prevent price fixing, market sharing and other restrictive
practices and to inhibit mergers and thereby, in all cases, to interrupt any
1138-39 Vict., 1875, c. 86, s.3. (U.K.), enacted in Canada 39 Vict., S.C. 1875, c.37, s.37, s.4 with
much the same objectives if not the same language; now sec. 410 of the Criminal Code.
‘ Compare Allan v. Flood [1898] A.C.1 and Quinn v. Leathem [1901] A.C. 495 with the Mogul case,
op. cit., note 13. For a discussion of the “double standard”, see Cohen, “The Role of Law and Lawyers
in Industrial Relations” (1951) 11 R. du B. 477.
5 tGosse, op. cit., at p. 68-93; Dobson, op. cit., at p. 129-149; Cohen, op. cit., at p. 449-455.
“Ibid.
1s9-10 Edw. VIII, S.C. 1910, c.9.
No. 2]
ANTI-COMBINES LAW AND POLICY
tendencies toward monopoly. 19 But in the past three or four years a new
concern appears. It is the anxious search for answers to Canada’s role in the
reconstruction of world trade and the quest for domestic policies to improve
the level of efficiency of Canadian economic activity. The argument now runs
thus: the efficiency of industry for the most part depends upon a certain optimum
size which, in most cases, depends upon developing markets, and with Canadian
industry facing the European Common Market, Japan and similar industrial
developments elsewhere, Canadian business must be permitted to organize
itself so as to achieve the size required for the “true efficiency” necessary to
meet this competition. 20 Thus the pressure for “revisionism” comes from a
new source, i.e. the reorganization of world trade and the determination of
Canada’s place in this urgent, intense race for competitive competence.
Two other more traditional pressures also emerge with fresh strength.
First, there is the distaste of the businessman for a regulatory mechanism that
places him in the prisoner’s dock for what is only, in his view, a question of
business taste, judgment or tactics. This objection to anti-trust law on the
ground that it brings with it the stigma of a crime, as part of criminal law, is
an old story in the running debate between the business community and the
defenders of the existing legal pattern. What is new about it, is the uniting
of moral indignation to the new national interest in international competitive
strength. There is something to be said for this view; indeed, Mr. King held
the position with some modesty at the very beginning of the introduction of
the first Combines Investigation Act of 1910.21 For not all multifirm infringe-
ments of the Act would be basely conspiratorial, and not all mergers or
monopolies would be achieved by predatory or other unpleasant means. It
could be argued, therefore, that the law often made criminal what in some cases
was a rough but not improper exercise of business judgment and methods in
dealing with competitors and the market.
Secondly, there was the pressure of the special pleaders, the co-operatives
claiming to be exempt and explicitly excluded from the law; 22 the trade union
movement asserting the unique character of their collective defence against
the rigours of the bi-lateral contract in a capitalist society and winning sta-
tutory exemptions for themselves also;23 fishermen claiming consideration of
their joint needs to determine prices and marketing arrangements and obtaining
19Gosse, op. cit., at p. 94-214.
20SCe,
for example, Munro, The New Europe (pamphlet, Winnipeg Tribune, 1963); Smith, Some
Questions about Economic Planning for Canada (1962) (mimeo. Address to the Empire Club Toronto,
Nov. 1, 1962); cf. France, Quatrimr Plan de Dvelopponmet, Economique Sociale, 1962-65 published by
La Commission du Plan, Paris; Planning in France, P.E.P. pamphlet XXVII, No. 454, Aug. 1, 1961;
Weldon, Cadbury and Oliver, Democratic Planning: A Symposium (1962 pamphlet).
21Mr. King in Can. H. of C. Debates, 1909-1910, Vol. IV, at p. 6823.
22R.S.C. 1952, c. 314 as amended by 2-3 Eliz. II, S.C. 1953-54, c. 51 and 8-9 Eliz. II, S.C. 1960, c. 45
(1960 Office Consolidation). See sec. 33A (3).
2’Crim. Code, sec. 411 (3), (now sec. 4, 1960 Office Consolidation). All references to the 1960
amendments hereafter referred to are as set out in the 1960 Office Consolidation.
McGILL LAW JOURNAL
[Vol. 9
recent legislative sympathy;24 finally, the small businessman, chronically
aware of the chain store or the large retailer and seeking additional protection
against the rigours of superior competitive power –
advertising, marketing,
bulk buying, discounts, etc. 2 Little wonder that in the face of all of these
claims for amelioration or exemption, with others now placed also on the
high ground of national commercial policy abroad, that demands for revision
of combines legislation should be more vociferous than perhaps ever before.
And now there is added another voice, perhaps more significant in its
ultimate impact than the claims for change already listed: it is an argument
that goes partly to the position of Canada in the new trading arrangements of
the world, but perhaps more it is an argument that is, in a sense, directed
against perpetuating the mystique of a free and competitive economy even in
its present imperfect and welfare-state form. For this is the argument that
leads to “planning”. Planning is now the fashionable tool, the touchstone of
success with which to do away with chronic unemployment, regional under-
development, unbalanced international payments, the underuse of existing
capacity, the misdirection of capital investment and resource development. 2
For the mythology which once supported anti-combines policy had as its core
the idea of “the market”. The market was the touchstone where buyers and
sellers in freedom made their choices, and through the operation of their many
“invisible hands”, there emerged a fair or market price and an efficient alloca-
tion of resources. 27
But, of course, it is too well known how the history of the past hundred
and fifty years of Western capitalism became an essay on the unpredictability
of the market as a guide to affluence.28 And still the paradox emerged that
though the business cycle combined with the industrial revolution to create
the experience of mass urban employment, yet it was the same “market
economy”, and access to science, to skills and resources, that in a very large
part gave to Western civilization its taste of affluence.29
Hence, the problem has emerged with particular acuteness for communities
such as Canada-namely, how to maintain affluence while yet preventing
chronic unemployment and awkward international trade and payment situa-
tions and how to do this at a time when the pattern of world trade is itself
undergoing important alterations, partly in the direction of greater freedom
from restrictions and partly toward significant regionalization. If this is the
kind of basic general question that is now to be asked, it must lead to the
related more specific question about the role of anti-combines law and policy
249-10 Eliz. II, S.C. 1960-61, c. 42.
58-9 Eliz. II, S.C. 1960, c. 45, sees. 33A, 33B, and 33C and 34(5).
Z6See the more cautious view of Smith, op. cit., note 20.
27Galbraith, op. cit., at p. 40-43.
28Galbraith, op. cit., p. 24-47; Berle, op. cit., liassim.
22Galbraith, op. cit., p. 1-3, and 322-333.
No. 2]
ANTI-COMBINES LAW AND POLICY
in this new pattern of plans and expectations.
Indeed, what seems to be
emerging is a consensus on the need for what has now come to be known as
“indicative planning”, not unlike some of the experience in the United King-
dom and Western Europe in recent years.0 And while this kind of planning
is based upon “suggestions”, “incentives” and overall co-operation between
management, labour and government, it has a quality of “positive regulation”
that may be alien to the spirit of “negative regulation” that characterized
the kind of policy-thinking under which anti-combines law grew and partly
flourished. By “negative regulation”
is meant the prohibition of certain
types of entrepreneurial behaviour and by implication, therefore, permission
or freedom for all other business policies and practice. Thus, the more signi-
ficant urge to revise present anti-combines law may be said to be founded on
this shift from negative regulation –
and the concomitant heavy reliance upon
the classical market even if only workable competition resulted –
as against
the newer reliance upon the more “positive regulation” which varying degrees
of democratic, “indicative planning” may require. Thus a prohibited trade
practice, or a merger, under the one system of ideas and values during the
period of negative regulation, may become more acceptable to the rationalizing
requirements of the new period. Therefore, it may be necessary to review the
present Combines Investigation Act and its administration and to ask pointedly
how far does the present Act, as amended in 1960,31 suggest an essentially
durable and desirable pattern of regulation, with the occasional modifications
that experience suggests; or, how far must there be some fundamental change
in the very approach that government takes to the legal control of enterprise
today?
II. Technical and Administrative Achievements and Perspectives
Before the more difficult area of future policy and action can be explored,
it is necessary to examine the technical and administrative record of the present
Canadian anti-combines program.
It is well understood that the initial at-
tempts from 1889 to 1910 failed because as a piece of criminal legislation it
soon became apparent that the police work required for enforcement went
beyond the ordinary resources of provincial attorneys-general.32 The 1910
Combines Investigation Act33 and, more particularly, the 1923a1 statute intro-
duced a federally-operated investigatory process, cumbersome in the first and
more efficient in the second, but in both cases under the control of the national
government. The early years of enforcement from 1925 to 1940 were marked
by changes in government, the onset of the great depression, and competing
3For a comment on the French Plan see P.E.P. pamphlet Planning in France, op. cit., supra, note 20.
318-9 Eliz. II, S.C. 1960, c. 45.
=Dobson, op. cit., at p. 170-172.
339-10 Edw. VII, S.C. 1910, c. 9.
313-14 Geo. V, S.C. 1923, c. 9; R.S.C. 1927, c. 26.
McGILL LAW JOURNAL
[Vol. 9
theoretical and practical views as to the role of restrictive trade practice control
in the midst of a static or shrinking national income. 5 It was one thing to be
concerned about predatory and harsh business methods and policies in an
expanding economy; it was something else again to permit too much competi-
tion when output was shrinking and when the predominant motif, economic-
ally, was to provide for reasonable sharing of a “static pie” rather than encour-
aging a market scramble for the thin depression crumbs. This surely explains
the experiment with the National Recovery Act 36 in the United States in the
early days of the first Roosevelt administration from which Mr. Bennett, in
Canada, took his principal guide in fashioning the Dominion Trade and Industry
Commission Act37 that provided, under section 14, for legalized and approved
trade restriction agreements. The return of the Liberals to power in 1935
restored the earlier confidence in anti-trust legislation, and a considerable
enforcement momentum developed by 1939 when World War II introduced
fundamentally opposed concepts of economic control. Now the objective was
to mobilize and allocate skills and resources to be shared in some deliberate
proportion between guns and butter.- s Almost by tacit consent on the part of
everyone, the structure of anti-combines administration and policy was put
in wartime escrow to await a more peaceful day with the staff of the Commis-
sion now deployed to serve a regulatory body empowered to fix prices and
rationalize output and its distribution, namely, the Wartime Prices and Trade
Board. 39 Of course, the W.P.T.B. was only one of several instruments that
marked a period of extensive governmental control of every phase of the
economy, 40 but it was clear that such a philosophy of detailed regulation could
not be paralleled by and be concerned with the preservation and enforcement
of competition –
although pretensions to have such a reconciliation persisted
in United States wartime policy, if not in Canada.
The end of the war revived with unexpected vigour, public and governmental
interest in competition and its encouragement; and, additionally, there was
some fear that sectors of the business community having become comfortable
within the protective rationalization of wartime regulations, would find it
less agreeable to face again the sharp winds of competition. This would, of
course, mean that there might be attempts to carry over into postwar days
the authorized wartime arrangements on prices, production, and market
sharing; and it was precisely this concern that stimulated an intensive postwar
-Reynolds, The Control of Competition in Canada (1940), passim.
3’Cohen, “The MacQuarrie Report and the Reform of Combines Legislation” (1952) 30 Can. B. Rev.
549, at 554.
3725-26 Geo. V, S.C. 1935, c. 59.
3’Galbraith, op. cit., p. 132; Cohen, “Canada Looks to the Post-War” [19431 Antioch Review
(Winter Issue) 483.
3″See Cohen, “Review of Machinery of Economic Control Set Up under War Measures Act”,
Committee on Reconstruction, P.R. 12823 (1941 mimeo.).
401bid.
No. 2]
ANTI-COMBINES LAW AND POLICY
program of investigations and prosecutions. Taking the period 1925 to 1952
there were: 28 formal enquiries resulting in reports, 16 prosecutions, and 14
convictions; while in the much shorter period 1952-1960 there were 34 R.T.P.C.
reports, with 19 prosecutions and 13 convictions. The actual staff in 1961 was
52 persons including the Director and 20 officers, and this substantial increase
in staff since 1950 suggests a new awareness and determination in enforcement
policy.4
Nevertheless, the business community and others, remembering the pleasures
and conveniences of wartime security from excessive competition and familiar
with the awkward consequences of publicity flowing from investigation under
the Act, already were pressing for the study and reconsideration by government
of anti-trust policy. The McQuarrie Committee, established in 1950 to study
the legislation, issued two reports to the Minister of Justice, the first of which,
in 1951,42 far from giving aid and comfort to business, urged the abolition of
resale price maintenance as being unduly restrictive. The second report, in
1952, 41 proposed a series of quite substantial reforms of the Act on the ad-
ministrative side if not of the central doctrines of the law itself. The conse-
quences of the McQuarrie committee’s study were, of course, to amend the law
by rendering illegal resale price maintenance, 44 and perhaps more important its
1952 recommendations led to the division of the work of the Commissioner
into two parts. There was now established a Restrictive Trade Practices
Commission 4
1 that would hear and determine the facts of alleged infringements
of the Act and draft reports outlining the facts and its evaluation of them
while a newly established office of Director of Investigation and Research 46
would conduct all the preliminary enquiries and prepare statements of evidence
to go before the Commission. One of the objectives, perhaps the most important
one in this new division of labour, was to prevent the policeman and the
quasi-judge from being one and the same official which, to a large extent,
was the case theretofore. A second objective was to provide a more formal
mechanism for the tendering of evidence and also to discourage the reports, to
be published by the new Commission, from making criminal law evaluations
when the essential purpose of the report was to state findings of fact under the
fairest conditions of a quasi-administrative hearing. It was naive, of course,
to believe that “facts” already requiring law-impregnated words to describe
them, could avoid suggesting findings that almost amounted to judgments as
4 Compare Annual Report of the Director of Investigation and Research 1962, pp. 36-37 with data in
Cohen, “Can Trust-busting Preserve Competition?” [1947] Public Affairs, December, p. 6.
4See Resale Price Maintenance: An Interim Report of the Committee to Study Combines Legislation, Oct.
1, 1951;
43Report to the Minister of Justice of the Committee to Study Combines Legislation, Mar. 8, 1952.
4415-16 Geo. VI, S.C. 1951, (2nd sess.), c. 301; 1 Eliz. II, S.C. 1952, c. 39, s. 7;
451 Eliz. II, S.C. 1952, c. 39, ss. 16-22 (1955 Office Consolidation); (ss. 16-22 also in the 1960 Office
Consolidation).
46Ibid., ss. 5-15.
McGILL LAW JOURNAL
[Vol. 9
to “lawfulness” or otherwise. Finally, the 1952 amendments also intended to
remove the ceilings on fines and to introduce an important new sanction, namely,
a form of injunctive procedure to restrain convicted persons or companies from
carrying on the proscribed practices and to require,47 if necessary, a systematic
reporting back to the court about their practices and their elimination once
the conviction had been obtained. 48
It is significant that though the business community argued, very strongly,
to the Committee that the Act should have much more extensive guide-lines
to enable businessmen to know what were legal or illegal restraints on competi-
tion, the Committee was not disposed to alter the very general language of
either the definition of section 2 of the Combines Investigation Act or the
older language of section 498 and 498 A, (later sections 411 and 412) of the
Criminal Code. For by 1952, it was evident that the concept of “unduly”
in
the Criminal Code and the phrase “to the detriment of the public” in the
Combines Investigation Act were both receiving parallel interpretations,4
1
although most prosecutions were taking place under the Code rather than the
Act since it was believed that indictments under the Code presented fewer
technical difficulties than the parallel language of the Act. And while a minute
analysis of the contrasting language in section 2 and section 411 would reveal
some interesting differences, in general the tradition grew both in the courts
and at the Bar as well as in the Office of the Director that there was little to
choose in substance between the meaning of the two definitions.50 By 1960
these definitions had, so far as multi-firm, looseknit combinations were con-
cerned, developed a predictable and consistent pattern, while as to “mergers”
and “monopolies”,
there was also emerging a kind of predictable scheme of
permissive and prohibited business activity.
For in the first group, multi-firm combinations, what seemed to matter in
the long line of cases culminating in the Fine Papers case” was the very fact
that there had been an agreement and the agreement did, or was intended, to
restrain “unduly” or limit competition in many of its various aspects in the
manufacturing or distributive process. As Summerfeld had pointed out some
time ago, the courts were prepared to convict upon evidence of an agreement; 52
and many of the convictions dealt with situations where the agreement embraced
a preponderance of the industry, nationally, possibly an average of seventy-
five percent. This trend, however, did not mean that regional or local city-
wide combinations could not be regulated and indeed, adverse Commission
471bid., s. 31.
48Tbid., s. 33.
49Gosse, op. cit., p. 180-181.
5Gosse, op. cit., Chap. IV and V, passim.
51Kellock, J. in Howard Smitb Baper Mills Ltd. v. R. (1957) 8 D.L.R. (2nd) 449, at 459 quoting
Meredith, J. with approval in the old case R. v. Elliot (1905) 9 O.L.R. 648, at 651, “The crime is in
the conspiracy not in the unlawful acts comprehended in it”.
52Sommerfeld, “Free Competition And the Public Interest” (1947-48) 7 U. of T.L.J. 413.
No. 2]
ANTI-COMBINES LAW AND POLICY
reports and convictions are to be found where there were local combinations
to fix prices, share in markets, prevent new entries, or develop other restrictive
practices.A And while the courts insisted, in these multi-firm cases, that
Parliament intended everyone to have the benefits of competition and that it
to combine, etc., that was the gist of the offence54 –
was the “agreement”
pace, the older “conspiracy” doctrine55 –
it is significant, surely, that none of
the cases brought to trial, or even before the Commission, are cases of mere
“agreement”. They are instead cases where the “agreement” was carried out
with a great deal of evidence to indicate that efforts were made to execute it
and the courts reasoned backwards from the implementation of the “agree-
ment” to find that the “agreement” itself was the essence of the offence.
Indeed, it
may be argued that, from all of the cases to be found both in the judicial
decisions or in the Commission reports, it cannot be said that there is any
reason to believe that an agreement without acts of implementation may have been
enough to found a prosecution since there were no such examples in the cases
either reported on by the Commission or brought before the courts. Never-
theless, the fiction persists that the offence is committed when the “agreement”
is made, independently of implementation, and there emerges, consequently,
the per se doctrine which holds that it is evidence of the “agreement” per se,
independently of effective execution and independently of any specific economic
effects on prices, profits, alleged efficiency, etc., that is the basis of the offence.
It is a short, neat but draconian rule which has served the policy well if it is
intended to treat severely price fixing, market sharing and similar arrangements.
But it is a doctrine that relieves courts of the kind of detailed economic analysis
that should be essential to its findings whatever may be its technical familiarity
with economic policy.
Similarly, the progress of judicial interpretation of the “merger, trust or
monopoly” provisions of the Act has led to an almost equally clear under-
standing of what is proscribed or permitted. Both the reports of the Commis-
sion and the few judicial decisions available indicate that though the Com-
mission would like to have established a formula which would have prohibited
a deliberate search for market domination through merger and the use of money
53e.g. since July 1957 the following are among the R.T.P.C. reports that have dealt with city-wide
or regional situations:
Electrical Construction Materials in Ontario, 1959.
Sugar Industry in Eastern Canada, 1960.
Sale of Coal in Sault Ste. Marie, Ont., 1960.
Manufacturing and Sale of Belts in Montreal, 1960.
Sale of Gasoline in the Toronto area (three reports), 1961.
Wilsil Ltd. and Calgary Packers Ltd. (merger), 1961.
94Kellock, J., op. cit., note 51.
5rSee Gosse’s interesting discussion, op. ci., at p. 95-104 as to whether the older doctrine of
“.conspiracy” was really intended to be incorporated into the Combines Investigation Act or the
older Criminal Code provisions. He suggests that such was not the intention and that the words
“conspire” and “combine”, presently in sec. 32 (1), should be removed to avoid the continuing
confusion. It is difficult to accept his reasoning for both historical and “term of art” reasons.
McGILL LAW JOURNAL
[Vol. 9
power – where in fact there has resulted some substantial reduction in com-
the Courts in the Breweries case56 and British Columbia Sugar case5 7
petition –
were unwilling to view mergers quite so severely. McRuer, C. J., in the
Breweries case insisted that the policy of buying up smaller breweries by Cana-
dian Breweries over a twenty year period could not be regarded as illegal when
52% of the business of Canada remained in the hands of competitors and at
least two of these competitors, Molsons and Labatts, were strong enough to
prevent any successful move by Canadian Breweries toward a dominant position
in the industry.58 Furthermore, he regarded control over price as essential
evidence of a tendency toward monopolization or domination but in this case
price was, in theory at least, a matter of provincial law and was determined by
existing provincial machinery in the form of the Ontario Liquor Control
Board.5 9
In the British Columbia Sugar case, William, C. J. Q.B., held there was no
illegality in the purchase by British Columbia Sugar Refineries Limited of
Manitoba Sugar because effective competition from Eastern sugar was possible
in the Manitoba and Saskatchewan markets,”0 and unless there was a “virtual”
monopoly, because competition had been virtually stifled, 6
the merger did
not infringe on the intention of the Act. It is interesting that both judges
relied quite heavily on the separate opinion of Cartwright, J., in the Fine
Papers case, McRuer, C. J., directly on it and Williams, C. J., at least indirectly
through his reliance on McRuer, C. J. Curiously McRuer, C. J. paid little or
no attention to the adverse consequences of the company’s policy on “new
entries”; while Williams, C. J. may have been unduly concerned to protect
the Manitoba beet sugar industry, presumably from “competition”.
It is unfortunate that the merger-monopoly problem is now confused by
the doctrine of “virtual monopoly” on the one hand and on the other by
the exceptional status given to the role of pricing and, therefore, to the capacity
of provincial law to cut across and to protect merger activities otherwise
possibly illegal.
The conclusion, doctrinally, to be drawn from these developments is pointed
up by some of the provisions of the important 1960 amendments to the Act.
56R. v. Canadian Breweries Ltd. (1960) 33 C.R.1; 126 C.C.C. 133.
5-R. v. British Columbia Sugar Refining Co. (1960) 129 C.C.C. 7.
58R. v. Canadian Breweries Ltd. (1960) 33 C.R.1, per McRuer, C.J.H.C., at p. 27; 126 C.C.C. 133,
at 161, “‘As long as the evidence shows that there is strong virile competition, I do not think that
the merging of competing companies comes within the standard of proof required in a criminal case.”
S9Ibid., at p. 33; 168: “I ask myself this further question: Has it been proved beyond reasonable
doubt that the merger has conferred on the accused the power to control the market so that the
provincial authority in the exercise of its duty in fixing prices cannot protect the public interest?
To this question I think the irresistible answer is ‘No’ “.
6Williams, C.J. Q.B. at p. 65: “The Crown has not satisfied me beyond a reasonable doubt…
that the merger in question destroyed or even limited competition…”
611bid.,
at p. 60: “The Crown must establish a virtual stifling of competition. This it has not done.”
No. 2]
ANTI-COMBINES LAW AND POLICY
For in the case of mergers, the first draft bill introduced by the Minister in
19602 contained a new definition with a number of criteria for lawful mergers,
but these were eliminated in the Bill as finally enacted. Today, a kind of stale-
mate exists in the legal position. Doubtless, the present survey of the merger
problem, both of its statistics and of corporate policy, which the Director has
undertaken, together with the invitation by the present Minister of Justice
to the business community to present its views on all aspects of the Act,63 may
lead to some substantial re-examination and redefinition of both law and
policy.
And this observation now leads into a consideration of the 1960 amend-
ments themselves. For one of the prime reasons for the extensive changes
made in 1960 was to some extent the pressures that accumulated from 1952
onwards as the business community became increasingly restive and possibly
disappointed at the results of the McQuarrie Committee findings and their
implementation. The most important sense of disappointment, doubtless,
came from the intensification of the investigatory and prosecution activities
of the Director and from the unexpected trend in the method of the Com-
mission’s drafting of its own reports. For one of the hopes of separating the
investigation and reporting functions in 1952 had been to assure a reporting
method that would not pre-judge the legal issues by making findings of “guilt”
or “innocence” as many of the pre-1952 reports seemed to do. Instead, the
Restrictive Trade Practices Commission reports began to follow much of the
same pattern as the earlier reports, at least with reference to relating the facts
before the Commission to the statutory or doctrinal criteria of licit and illicit
business behaviour64 –
level of economic analysis
before the Commission and in the Commission Reports developed to a much
higher degree of sophistication than was to be found in the pre-1952 inquiries
and reports. In the end the business community claimed that it found itself
with a reporting tradition in the Commission that seemed to have some of the
objectionable qualities of the older reports, namely, virtual findings of guilt
by a body not lawfully established to do so, and not having abided by anything
but the most informal rules of evidence and its admissibility. Finally, it should
be said that the rise of discount houses and their effect on the smaller retailer of
durable consumer goods, the concern for a strong export position and the
increasing demand by business leaders that anti-combines matters should not
be regarded as criminal law, affected the amendments put forward by the
Government in 1960. And when these grievances were added to the rigours
of the per se doctrine, the changes in the Act were designed in part to meet
both recent and longer-standing objections. Apart from certain minor proce-
“See Bill C-59, First Reading, June 11, 1959, sec. l(2Xf) proposing to amend sec. 2, R.S.C. 1952
although the general
c. 314.
U3Report of the Director of Investigation and Research for the Year ended March 31, 1962, p. 33.
64MaIQuarric Report, op. cit., at p. 34.
McGILL LAW JOURNAL
[Vol. 9
[
dural matters there were eight more or less important “substantive” changes
in the Act:
1. A group of specific defences were provided to combinations, agreements,
etc., generally speaking, covering what already was understood to be
innocent, such as exchanging statistics, defining product standards,
credit information, trade terms, research and development information,
and restrictions of advertising.15 These, of course, were not to be an
excuse for doing by the backdoor what was prohibited through the
front and in no case could they deal with undue lessening of competition
in the matter of prices, quality or quantity of production, markets or
customers, or channels and methods of distribution.6″ A necessary com-
ment here is the fact that these defences are essentially redundant since
they already were “innocent” and the only effect of the new language is
to underline these exemptions and perhaps render the businessman more
vulnerable to previously innocent activities not coming within this
specific class of exempted behaviour.
In criminal law, silence often
is more helpful than definition for those wishing to avoid trouble.
2. At long last the “competition” between section 411 of the Criminal
Code and section 2 of the Act was eliminated by introducing into the
Act the older Code definition with some slight rearrangement of lan-
guage. 67 What remained of the Combines Act definition, but now some-
what clarified, were the merger-monopoly provisions of the older
Act and they alone retained the “detriment … of the public”s language
which was now replaced entirely for the multi-firm cases by “unduly” or
“unreasonably” as it had been in section 411 of the Code. Otherwise,
except for the’elimination of the word “trust”, the old merger-monopoly
definition remained essentially the same if re-organized and better
stated. Similarly, section 412 of the Code dealing with price discrimina-
tion was now incorporated into the Act.69
3. The influence of the “consent decree” provisions of the United States
Sherman70 and Clayton Acts71 and the “cease and desist” orders under
the Federal Trade Commission Act, 72 had long interested administrators
and students of Canadian anti-combines law in the need for some similar
658-9 Eliz. II, S.C. 1960, c. 45, sec. 32 (2).
cIbid., sec. 32 (3).
671bid., sec. 32 (1).
13Ibid., sec. 2 (c) (f).
69Ibid., sec. 33 A.
70Dcwcy, Monopoly in Economics and Law (1959), p. 147, 308; Neale, The Anti-Truast Laws of the
United States of America (1960), p. 373-376.
71’bid.
7 Neale, ibid., at 379-381.
No. 2]
ANTI-COMBINES LAW AND POLICY
procedures in Canada. This technical objective was largely achieved
now by providing for restraining orders before conviction and even with-
out a conviction3 3 What may be the effect of this effort on the constitu-
tional foundations of the statute as a whole, will be most interesting to
observe. For if such a provision is intra vires the Parliament of Canada, it
presses a little farther the possible use of the Trade and Commerce clause
of section 91 or the inter-provincial and foreign trade powers of the
Federal Parliament to embrace anti-trust legislation and kindred controls
that heretofore have been confined narrowly to “criminal
in
section 91(27).7 4 The Goodyear Tire and Rubber case75 was able to assimilate
a form of injunctive procedure provided for in the 1952 amendments on
the ground that it was in aid of criminal law enforcement, after indict-
ment and conviction. It may be quite another matter to find a similarly
convenient link when there is neither a charge, indictment or conviction
upon which to rest the application for such a restraining order, or,
perhaps even more interesting, for the “dissolution” of a merger or
monopoly, which the amendment also provides for.
law”
4. The serious pressures on the part of small business, particularly the
retailers of durable consumer goods and groceries, found a partially
sympathetic reply in the prohibition against “loss leaders” and similar
practices.7″ For now the supplier may refuse to sell a retailer who
abuses a “brand name” or any other form of identifiable product by
using such products to entice customers rather than for bona fide selling
reasons resulting in a normal profit.7 7 Under this amendment the door
may be open to a partial restoration of resale price maintenance through
allowing the supplier to cut off the distributor where he satisfies the
court “that he and anyone upon whose report he depended had reason-
able cause to believe and did believe.. .etc.” 78 Such highly discretionary
language is likely to be open to much abuse because most of the suppliers
provide “suggested price lists” which, under the rules prohibiting resale
price maintenance, were not enforceable and could only be used as pres-
sures on buyers at the risk of prosecution.7
1 It remains to be seen whether
the “good faith” required for the successful practical operation of this
amendment will, in fact, be over-balanced by an anxiety to restore as
much of resale price maintenance as possible – with the “suggested price
list” now becoming a formidable weapon sharpened by the right of the
728-9 Eliz. 1, S.C. 1960, c. 45, sec. 31 (2).
74See Gosse, op. cit., Chap. VII, pp. 226-266.
7(1953) 107 C.C.C. 88; (1954) 108 C.C.C. 321.
788-9 Eliz. II, S.C. 1960, c. 45, sec. 34 (5) (a).
77Ibid.,
721bid.
71cf. sec. 34 (1) (2) and (3).
sec. 34 (5) (b).
McGILL LAW JOURNAL
[Vol. 9
supplier to cut off a customer for alleged “loss leader” and similar
practices.
5. A most important concession to the general dislike of the business com-
munity for the atmosphere of the criminal courts, and for the conception
that anti-combines problems are truly “criminal”
is to be found in the
option now given under the amendments for the Attorney General to
proceed in the Exchequer Court of Canada with the consent of all of the
accused rather than in the regular superior courts of criminal jurisdic-
tion.80 At the hearings before the Banking and Commerce Committee
of the House of Commons, this option raised a number of questions the
most important of which was the value of having two systems of tri-
bunals for this field of criminal law enforcement and, perhaps even more
subtly, the question as to whether or not the Exchequer Court because
of its familiarity with patent, copyright and trade mark problems as
well as taxation questions, was not predisposed to be sympathetic to
aspects of monopoly, on the one hand, and to the businessman’s prob-
lems with government in general on the other.”‘ There can be no doubt
that counsel in many cases will be tempted to take their chances in the
Exchequcr Court in the hope of having a generally more tolerant view
of merger-combination situations. But there is, of course, the other
possibility that the Exchequer Court may develop into a skilful and
experienced chamber dealing with anti-combines and related questions
and thus provide a sustained judicial expertise in an area where a high
degree of experience and sophistication would seem to be desirable.8
6. Not unrelated to the price discrimination problems of section 412 which,
of course, had now been incorporated into the Act,83 were the develop-
ment of promotional allowance programs which also had a discriminatory
aspect to them since manufacturers or major distributors might favour
certain wholesale or retail outlets as against their competitors not by way
of price directly but by varieties of promotional allowances, e.g. services,
advertising subsidies, advertising directly placed on behalf of the cus-
tomer, etc. 4 The amendments try to provide for equalization in this
area but the dikes cannot be wholly closed to the great flow of cash,
“gimmicks”, etc., that can be employed by a manufacturer to push a
product through a favoured channel. For example, under section 33 B (2)
it is possible that the granting of equivalent allowances to a purchaser
8Ibid., sec. 41 A.
81E.g. in House of Commons, Standing Committee on Banking and Commerce, Minutes of Proceedings
and Evidence, July 7, and 8, 1960, p. 561.
82This is Professor Brecher’s argument in “Combines and Competition: A Reappraisal of Canadian
Public Policy” (1960) 38 Can. B. Rev. 523.
838-9 Eliz. II, S.C. 1960, c. 45, sec. 33A.
“Tbid., sec. 33B.
No. 2]
ANTI-COMBINES LAW AND POLICY
may mean an “immediate purchaser” rather than a remote purchaser
and discriminatory benefits given to a remote purchaser in the distributing
process may not have to be equalized in favour of other purchasers at the
same level of distribution where the recipient is two or more steps
removed from the donor of the allowance.
7. A further attempt to protect the consumer from radical forms of price
competition and also to protect less dramatically oriented businessmen
are the new provisions against “misleading advertising.””‘ For there is
the not uncommon practice of a retailer pretending that a product is
available at a certain price when in fact none are intended to be sold at
that price, but only to induce customers into the shop. Similarly, there
is the device of advertising the sale price of an article side by side with
its alleged regular price, when the regular price itself is usually fictitious.
These methods are now prohibited.
8. Finally, some interesting concessions were made by providing defences
to multi-firm combinations (but apparently not to mergers) relating to
the export of articles from Canada. S But since exports generally were
thought to be outside the scope of the Act, the door that is opened, if
it is opened at all, may already have been there. Moreover, to make
sure that it was a door easily to be closed, the amendments provide for
a series of safeguarding clauses that would remove the defence if the
combination, etc., limited the volume of exports, injured a domestic
competitor not a party to the agreement, made more difficult entries into
the business of exporting such articles or, in the end, lessened competi-
tion in the domestic market itself.
It will be evident from this too brief analysis of the new amendments that
the primary interest of the draftsmen was to *deal with certain urgent irritants
rather than major questions of substance apart from the export trade issue.
Of course, there remains to be considered – which this paper will not do –
the procedural problems of the Act: notably, the powers of the Director during
his preliminary enquiries; the relevance of fair hearing procedures during his
formal investigation; the character of the proceedings before the R.T.P. Com-
mission with particular concern for the legal meaning of the various steps
provided for in sections 18 and 19 of the Act dealing with the enquiries by the
Director through to the hearing by the Commission as well as the nature of
the proceedings before the Commission and the character and significance of
the Report itself. Some recent judicial statements are indicative of the concern
for fairness that has emerged in these proceedings and more particularly a
concern for the extent to which the Director can carry on his investigations
without meeting some reasonable demand by a potential accused to have
81lbid., sec. 33 (C).
816 bid., scc. 32 (4) (5).
McGILL LAW JOURNAL
[Vol. 9
counsel present and similar safeguards.87 Finally, there is now the evident
intention of those administering the Act to assert its relevance to certain
aspects of the service industries despite the traditional belief that services are,
strictly speaking, outside the scope of the legislation.88
III. Questions for the Future
The surprising rise in the volume of investigations and prosecutions from
1952 onwards is, of course, a significant factor in the present pressure for re-
assessment, but in the end the really dominant reasons are those that have to
do with a sense of discomfort on the part of the business community assuredly,
and perhaps even others, that anti-combines law and policy in their present
general form may not be entirely suitable to the “guided capitalism” and the
world trading problems that possibly face Canada in the future. It is significant
that the stalemate in the merger question and the rough justice of the per se
rules are about the sum total of the doctrinal fruits of two generations of
experience. 8 Thus the parameters of fair business conduct on the one hand
and the requirements of twentieth century capitalism on the other, may be
in need of some fundamental re-examination, though perhaps less in the first
than in the second. The time has come, therefore, to relate anti-combines
policy to the wider whole of economic policy and development where it may
be observed as one instrument in a many-sided approach to the “positive regula-
tion” of enterprise in a free society. Perhaps what is needed is another Royal
Commission to do what the Gordon Commission eschewed when it frankly
avoided coming to grips with the general question of competition and its
regulation.9 0 Such a Royal Commission might consider the following specific
questions:
1. Does the Canadian economy, and its present organization and structure,
require as a matter of public good the retention of general rules to prevent
“undue” restrictions on competition?
2. Are the existing rules with respect to combines, conspiracies, agreements,
etc., governing multi-firm arrangements, too strict in practice and do they
“unduly”
limit creative business arrangements; and correspondingly,
would any extensive modification of the present rules, particularly of
the per se doctrine, tend to encourage agreements, combinations, etc.,
87Canadian Fishing Company Limited v. Rhodes Smith et al [1962] S.C.R. 294; cf. the Canadian Bill
of Rights, 8-9 Eliz. II, S.C. 1960, c. 44, sec. 2(d).
s8See Report of the Director of Investigation and Research for the year ended March 31, 1961, rc Montreal
League of Linen Supply Owners Company, p. 5.
s3cf. Gosse, op. cit., Chap. VIII at 267-291.
9″Royal Commission on Canada’s Economic Prospects, Final Report, 1957, at p. 419 et seq.
No. 2]
ANTI-COMBINES LAW AND POLICY
which then would move the organization of industry in the direction of
ever greater restrictions upon competition through direct or indirect
price controls, market sharing, etc.?
3. Considering the domestic market and contrasting it with our foreign
trade problems, can it be said that the anti-combine rules generally
governing domestic restrictions upon competition should apply to
arrangements with respect to Canadian external trade?
4. Are the present rules with respect to “mergers” too restrictive on creative
business policies aimed at achieving economies of scale and similar
objectives; and can workable rules with respect to mergers really be the
same for domestic economic situations as they would be for Canadian
external trade requirements?
5. What is the effect on Canadian anti-combines policy of the seeming
efforts of the United States Department of Justice to view United States
anti-trust law as having extra-territorial effects, with particular reference
to United States subsidiaries in Canada; and should there not be some
clearly defined limits within which the laws of the United States are to
operate with respect to events taking place in Canada whether on the
part of subsidiaries or not; and can this problem be managed by way of a
treaty or otherwise?
6. What is the effect of any possible Canadian association with the Common
Market countries in the future and, in particular, what will be the
problems raised for Canadian business both in Canada and in Europe
through the operation of articles 84 and 85 of the Rome Treaty dealing
with restrictive practices within the European Economic Community?
7. How far should Government under the present or some future statute
seek to extend anti-combines policy to service industries?
8. What are the problems of relating federal anti-combines law to provincial
jurisdiction over prices, marketing, etc.; and do we not need a more
developed doctrine of “paramountcy” or some similar concept to re-
concile these conflicts –
if indeed there is conflict both in fact and in
theory? Similarly, what are some of the problems and consequences of
national economic regulation in contrast with provincial regulation
whenever it now takes place and the problem of overlapping and com-
peting regulatory systems?
9. What is the present justification for claims to exemption from anti-trust
laws in favour of organized labour, the co-operative movement, the
fishing industry, and are there other sectors that are equally deserving
of exemption or should the scope of exemptions, in any case, be restricted?
MCGILL LAW JOURNAL
[Vol. 9
10. Are there technical problems with respect to the definition of the offence,
and of the defences to a combines charge, which enforcement during
the past two generations indicates are in need of major alteration or
clarification?
11. Has the division of functions between the Director of Investigation and
Research and the Restrictive Trade Practices Commission since 1952
developed as expected when the McQuarrie Report so recommended;
and what has been the view of business, the Bar, the Courts, and scholar-
ship as to the quality and usefulness of the Commission’s reports as well
as to the procedures established by the Commission for the conduct of
its hearings?
12. Are there special procedural problems that arise because of the powers
given to the Director to make preliminary pre-formal enquiries and are
there improvements that may be made so as to retain for him the power
to investigate as fully as possible but at the same time to limit the sense
of ‘intrusion on privacy or the appearance of harassment which has
been claimed by some sectors of the business community to be charac-
teristic of combines inquiries?
13. Are the penalties under the Act appropriate or too severe or too light;
and in any case, should the whole field of anti-combines law be regarded
as properly criminal in its form and substance, or, if the Canadian consti-
tution should permit, may combines law and policy be better admin-
istered in some non-criminal forum? In addition, should there be estab-
lished special courts for the administration of such legislation or experi-
mentally should the Exchequer Court of Canada be given exclusive
jurisdiction to hear anti-combine cases for a fixed period of years to
determine whether such a forum can be developed into an expert one for
such cases without weakening the traditions of effective enforcement?
14. What can be said about the general effect, if any, on the Canadian
economy, as well as the effect specifically on concentration of industry
and restrictive trade practices, of the past two generations of anti-
combines law and enforcement? What are the structural and behavioural
characteristics of certain key Canadian industries and what may be the
significance of these characteristics for anti-combines and related regu-
latory policies, past and future?
15. What is the alternative, if any, to anti-combines policy and administra-
tion in the developing relations between the older “market” economy
and the newer “indicative planning” that may be characteristic of the
Canadian economy in the future; and thus, finally, what is to be the essen-
tial economic, political and social role of anti-combines policy and
methods, in the context of the management and future movement of
the Canadian economy?
No. 2]
ANTI-COMBINES LAW AND POLICY
101
It would be a policy far short of wisdom to discard or radically to modify
the existing pattern of the legal control of enterprise until there is something
really better with which to replace it. But it would be equally unwise not to
recognize that though the “market” is still with us, its significance as the
energizer of economic activity, may take on a different perspective in a world of
and “planning.” Yet, it would be quite
increasing respect for “plans”
wrong to assume that “planning” – whatever it may signify –
and “anti-
combines” are naturally conflicting concepts or policies. There is a vital place, as
even the Common Market countries themselves, with quite different traditions,
already are finding, –
type laws
in the new era ahead. It is the task of students and political leaders to find
that place and to give it effective, modern definition.
and a fortiori in Canada –
for “anti-trust”
