One form of Internet advertising.
Office of the Privacy Commissioner of Canada, Policy Position on Online Behavioural Advertising: “These are ads that are randomly placed. Since these advertisements are not based on website content or user preferences, they would typically be less economically successful to marketers.”
Contests generally fall into two categories: skill contests (e.g., judged story-writing, photography or other skill competitions) and random contests (e.g., contests where winners are selected by random draw). Random contests can include random draws, seeded games (e.g., where prizes may be found under bottle caps, etc.), scratch-and-win cards, instant win games online or so-called “match and win” games (in which participants collect game pieces for a game, puzzle, etc.).
Random draw contest.
A type of contest in which winners are chosen by a random draw from all eligible entries received (as opposed to, for example, a skill contest, where a contest entrant may have to compete with other entrants to win prizes).
A form of online fraud.
Canadian Anti-Fraud Centre: “Computers being frozen or [locking out] their users. This happens primarily after complainants receive pop-up messages warning them their computers have been associated with child pornography and illegal music downloading. These warning messages, which claim to come from the RCMP or other Canadian government agencies, tell recipients to pay [money] so their computers can be ‘unlocked.’ These types of messages, known as ransomware, are scams designed to create shock and anxiety so that victims respond by sending money quickly.”
Competition Bureau, Enforcement Guidelines, Consumer Rebate Promotions (2009): “Consumer rebate promotions include any type of promotion that involves a partial refund or discount from a manufacturer or retailer to consumers upon the purchase of a product. Refunds are normally paid in the form of cash or a cheque. For the purposes of this publication, ‘rebate’ is defined as excluding gift cards and other forms of credit on future purchases, given that the term ‘rebate’ can create the general impression in the minds of consumers that a portion of the price of the product will be returned to them. Rebates can be beneficial to both consumers and businesses. For consumers, rebates can result in lower effective prices. For businesses, rebates provide a flexible tool that may increase the volume of sales. However, when rebates are not promoted or administered correctly, consumers may ultimately pay more than intended, and competitors can be unfairly disadvantaged. There are two types of rebates: Instant rebates – Consumers receive the rebate at the time of purchase. The rebate is generally available to anyone who purchases the product, without further condition; Mail-in rebates – Consumers apply for the rebate after the purchase, by mail-in application, online or by other means. ‘mail-in rebate’ includes mail-in, Internet and other delayed- payment rebates. Various market participants may be involved in promoting and administering rebates.”
Competition Bureau, News Release, “Are You Getting the Real Deal? Understand Rebate Promotions Before You Buy” (December 14, 2009): “True rebates involve a partial refund or discount on the purchase of a product, which is normally paid in the form of cash or a cheque. By contrast, some promotions offer gift cards or credits to be used on future purchases. While these may be a good deal, they are not rebates.”
Consumers Council of Canada: “True rebates involve a partial refund or discount on the purchase of a product, which is normally paid in the form of cash or a cheque. By contrast, some promotions offer gift cards or credits to be used on future purchases. While these may be a good deal, they are not rebates.”
Recommended and maximum resale prices.
A type of vertical restraint.
European Commission, Guidelines on Vertical Restraints: “The practice consists in recommending a resale price to a reseller or requiring the reseller to respect a maximum resale price. The possible competition risk of maximum and recommended prices is that they will work as a focal point for the resellers and might be followed by most or all of them. They may then facilitate collusion between suppliers.”
Refusal to deal.
A “refusal to deal” is a term used in competition/antitrust law to refer to a refusal to supply goods or services. Refusals to deal can be unilateral (i.e., involving one supplier) or concerted (i.e., involving multiple suppliers of goods or services, as in a concerted refusal to deal or “boycott”).
In Canada, refusals to deal can be reviewed under four sections of the Competition Act: criminal conspiracy (section 45), (ii) refusal to deal (section 75), (iii) price maintenance (section 76), or (iv) abuse of dominance (section 79), each of which involves different elements that are required to be met and allow for different remedies for persons to whom goods or services have been refused.
See Competition Act, ss. 45, 75, 76 and 79.
See also the Conspiracy, Refusal to Deal, Price Maintenance and Abuse of Dominance sections of this blog for more information and key resources.
Regulated Conduct Defence.
Competition Bureau contribution, OECD Policy Roundtable, Regulated Conduct Defence (2011): “The [“regulated conduct defence” (“RCD”)] is one of a number of interpretive tools developed by Canadian courts to resolve potential conflicts between validly enacted laws. Under certain limited conditions, the RCD, and other interpretive tools, may remove from the application of the [Competition Act] conduct that is authorized or required by another federal, provincial or municipal law or legislative regime.”
OECD, Policy Roundtable, Regulated Conduct Defence (2011): “The regulated conduct defence allows antitrust immunity where conduct is required by federal or state regulation. The regulated conduct defence is important to ensure that the state can exercise its sovereign power to apply regulation that it deems justified for economic and/or social reasons even though the regulation may conflict with competition policy. The defence is also important to ensure firms do not face multiple inconsistent legal demands, in particular from regulations and competition law. Nevertheless, the regulated conduct defence also bears important risks including high potential costs for society. Indeed, the defence may preserve unduly anti-competitive regulation entailing welfare cost not necessary for achieving the regulatory objective. The defence may also lead to competition law exemptions of only weakly regulated conduct.”
R. v. Independent Order of Foresters (1989), 26 C.P.R. (3d) 229 (Ont. C.A.): “The [regulated conduct defence] simply means that a person obeying a valid provincial statute may in certain circumstances, be exempted from the provision of a valid federal statute. But there can be no exemption unless there is a direction or at least authorization to perform the prohibited act.”
Industrial Milk Producers Association v. British Columbia (Milk Board) (1988),  1 F.C. 463 (Fed. T.D.), per Reed J.: “… I accept counsel for the plaintiffs’ argument that it is a regulated industry defence, not an exemption which is pertinent. Indeed as I read the cases it is a regulated conduct defence. It is not accurate merely to identify an industry as one which is regulated by federal or provincial legislation and then conclude that all activities carried on by individuals in that industry are exempt from the Competition Act. It is not the various industries as a whole, which are exempt … but merely activities which are required or authorized by the federal or provincial legislation as the case may be. If individuals involved in the regulation of a market situation use their statutory authority as a spring board (or disguise) to engage in anti-competitive practices beyond what is authorized by the relevant regulatory statute then such individuals will be in breach of the Competition Act.” [emphasis in original]
Overview of Some Aspects of the RCD in Canada
The regulated conduct defence (“RCD”), which has been partially codified in subsection 45(7) of the Competition Act as a result of the 2009 amendments to the Act, is the Canadian equivalent of the U.S. state action immunity doctrine. When met, the RCD offers a form of immunity from enforcement under the Competition Act for legislatively authorized or mandated conduct. As such, the RCD can operate as a defence to some types of activities that would otherwise be subject to the Act.
The Competition Bureau’s “Regulated” Conduct Bulletin (the “RCD Bulletin”) sets out the Bureau’s general approach to the RCD in light of the amendments to the Act. For the RCD to apply, all of the following requirements must be met: (a) valid legislation, (b) conduct is legislatively mandated or authorized, (c) the authority to regulate has been exercised and (d) the regulatory scheme has not been hindered or frustrated by the conduct (or used as a “shield” to engage in unauthorized anti-competitive conduct).
Before the 2009 amendments to the Competition Act, it was not clear whether the RCD would apply as a defence in relation to provisions of the Act that did not contain so-called “leeway” language indicating that other legislation may apply (e.g., the phrase “unduly” preventing or lessening competition under the former section 45). This uncertainty arose as a result of the Supreme Court of Canada’s decision in Garland v. Consumers’ Gas Co. which held that in the absence of such “leeway” language in the relevant federal legislation the RCD would not apply. This issue may now have been removed, at least with respect of the application of the RCD under section 45 (conspiracy agreements), given that subsection 45(7) now expressly refers to the former common law RCD as a defence.
The addition of the RCD to section 45, however, raises new questions including whether and to what extent the RCD continues to apply as a defence to other provisions of the Act. With respect to other criminal offences under the Act, the Bureau’s position in its RCD Bulletin is that it will apply Garland to determine whether Parliament intended that the particular provision apply to the conduct and, if so, it “may still refrain from pursuing the case in reliance on the RCD.” With respect to civil reviewable matters, the Bureau takes a more cautious approach stating that until RCD case law is further developed, it will consider the RCD in relation to reviewable matters but “will not consider RCD case law to be dispositive.”
The fact that this former common law defence has been partially codified under section 45 also does not resolve some of the existing uncertainties about its scope and application. These include whether the RCD: (i) operates as a defence or an exception under other provisions of the Competition Act, (ii) applies equally to regulated persons (so-called “regulatees”) as to regulators, (iii) applies to civil reviewable matters as it does to criminal offences, (iv) applies in the federal sphere (i.e., where federal legislation provides the authorization for challenged conduct) and (v) the level of legislative authorization needed to invoke the RCD.
The first condition for the application of the RCD is that there be validly enacted provincial or federal legislation mandating or authorizing challenged conduct. This is based on the principle that competition law liability should not be incurred for activities that are directed or authorized by other validly enacted legislation.
The mere fact that a particular industry or profession is generally regulated, however, will not provide a shield from the application of Canadian competition law. For example, in Industrial Milk, the court held: “[i]t is not the various [regulated] industries as a whole, which are exempt from the application of the Competition Act but merely activities which are required or authorized by the federal or provincial legislation as the case may be.”
Conduct is mandated or authorized
The second condition for invoking the RCD is that the challenged conduct must be required or authorized by validly enacted provincial or federal legislation.
With respect to the degree of authorization, Canadian courts have held that the RCD may apply not only where conduct is mandated but also where there is specific or general authorization for the challenged activities. The Bureau has also acknowledged that the RCD may apply where conduct is merely authorized as opposed to being mandated or compelled.
Despite the fact, however, that some Canadian courts have held that mere general authorization is enough to invoke the RCD, the level of authorization required remains unclear and unsettled. For example, in the Law Society case, the Ontario General Division held that the “regulated conduct defence will apply to individuals and companies which are subject to regulation, and to regulatory agencies themselves, provided the impugned conduct is mandated, required or authorized by validly enacted legislation. Similarly, in Industrial Milk, the court held that activities that are required or merely authorized by federal or provincial legislation may be exempt from the application of the Competition Act.
Despite these cases, Canadian courts have been inconsistent in articulating the degree of authorization needed to invoke the RCD. For example, in Jabour, the Supreme Court of Canada held that a “broadly styled” mandate to determine what constituted “conduct unbecoming” lawyers was sufficient authority for the Law Society of British Columbia to invoke the RCD as a defence to regulating members’ advertising, despite the fact that the Law Society’s statutory authority did not specifically address advertising.
Based on the Supreme Court’s liberal application of the RCD, Jabour is considered to be the “high water mark” for a permissive approach to the level of authorization needed to invoke the RCD. By contrast, some later cases have taken a more restrictive approach. For example, in Mortimer, a by-law enacted by an association of land surveyors establishing mandatory minimum fee tariffs was challenged. The British Columbia Supreme Court held that the RCD did not apply because, while the association’s enabling legislation granted some tariff-making powers, it was not clear that the legislation included the power to set minimum tariffs or fees. The enabling legislation was construed strictly by the Court, which held that if the legislature had intended to give the association the power to set mandatory minimum tariffs it would have clearly done so.
Given that conduct must be mandated or authorized for the RCD to apply, courts in several cases have similarly refused to apply the RCD where there was no legislative authority for the challenged conduct. For example, the RCD was held not to apply to a county law association that had not been delegated the authority to enforce a minimum fee schedule. In another case, a Quebec notaries association pleaded guilty to conspiring to fix the prices of real estate services where the Quebec government no longer regulated notarial fees.
Regulatory authority exercised
The third requirement to invoke the RCD is that the regulatory power conferred by legislation must be exercised. The RCD will not apply where a regulator has forborne from regulating.
For example, in B.C. Fruit Growers Association, members of a fruit growers association entered into an agreement with fruit packing houses to refuse to supply services to non-member growers. The fruit growers association argued that the former Combines Investigation Act did not apply on the basis that there was authorization for the actions of the accused, given that the relevant legislation provided for a marketing board to be appointed to regulate the operation of packing houses. The Court rejected this argument, finding that although a marketing board had been legislatively established, it had not exercised any authority it might have had to restrict the supply of packing services.
Regulatory scheme not frustrated
Finally, the RCD will only apply where the exercise of regulatory authority has not been frustrated by the conduct being regulated. For example, in R. v. Canadian Breweries Ltd., it was held that if the regulation of an industry is hindered by the behavior of those subject to the regulation, the RCD will not apply to protect them.
The RCD also cannot be used by a regulatory body as a shield for anti-competitive conduct outside the scope of the statutory regime. For example, in Industrial Milk, it was held that if “individuals involved in the regulation of a market situation use their statutory authority as a spring board (or disguise) to engage in anti-competitive practices beyond what is authorized by the relevant regulatory statute then such individuals will be in breach of the Competition Act”.
Antitrust Law Developments (Fifth), Volume I, p. 67: “Market analysis begins with the definition of the relevant market. Without defining the relevant market, there is no meaningful context within which to assess the restraint’s competitive effects. A relevant market has both product and geographic dimensions.”
A form of fraud.
U.S. Federal Trade Commission: “Double scammers are known as ‘reloaders.’ They use several methods to rip off consumers: (i) they call – claiming to work for a government agency, a private company, or a consumer organization that could recover money you lost or a product or prize that hasn’t been delivered yet – for a fee. The catch is that the second caller is following up on the first fraud, and may even work for the company that took your money originally. If you pay the recovery fee, you will have been fooled twice. You can expect more calls – and more convincing stories; (ii) another scam uses prizes as incentives to get you to continue to buy merchandise. If you make one purchase, chances are you will get a second call claiming you’re eligible to win a more valuable prize if you keep buying. The second caller makes you think that buying more merchandise increases your chances of winning. If you act on the offer, you may be called yet again with the same sales pitch.”
Canadian Department of Justice, Report of the Canada – United States Working Group on Telemarketing Fraud (Updated December 1, 2011): “These target the same victims again and again. Persons victimized once are most likely to be deceived repeatedly. Unfortunately, victims’ understandable desires to recover their original losses make them more vulnerable to further schemes. This is known as ‘reloading’ or ‘loading.’ Those who ‘invest’ money are ‘reloaded’ for more to protect or increase their investment, those asked for customs or shipping fees are ‘reloaded’ for additional charges, and those who give to a spurious ‘worthy cause’ are often ‘reloaded’ for further donations. ’Recovery room’ schemes exploit the victim’s desire to recover losses from previous frauds. Offenders, often from the same organization which defrauded the victim in the first place, call with inside knowledge of the fraud and a promise to recover the losses if ‘taxes’ or ‘fees’ are paid. A common tactic of callers is to represent themselves as law-enforcement or other government or professional employees (e.g., bank or stock-exchange officials), using inside knowledge of the victim and the fraud to establish credibility. ‘Recovery room’ operations frequently deprive victims of their last remaining funds.”
Competition Bureau, Reviewing Mergers, Merger Remedies: “Remedies are required when a merger or proposed merger is likely to prevent or lessen competition substantially in one or more relevant markets. In such cases, the Commissioner of Competition will take remedial action to prevent a merged entity, alone or in coordination with other firms, from having the ability to exercise market power, as a result of the merger. When the Bureau believes that a merger is likely to prevent or lessen competition substantially, it can either apply to the Competition Tribunal to challenge it under section 92 of the Competition Act or negotiate remedies with the merging parties in order to resolve the competition concerns by consent.”
OECD, Policy Roundtables, Paper, Remedies in Merger Cases (2011): “Remedies are used by competition agencies to resolve and prevent the harm to the competitive process that may result as a consequence of a merger. They allow for the approval of mergers that would otherwise have been prohibited, by eliminating the risks that a given transaction may pose to competition. As such, they play an essential role in the merger review process, and their careful crafting is of the utmost importance to the competition agencies carrying out the review. Merger remedies are generally classified as either structural, if they require the divestiture of an asset, or behavioural, if they impose an obligation on the merged entity to engage in, or refrain from, a certain conduct. Structural remedies may include both the sale of a physical part of a business or the transfer or licensing of intellectual property rights. They can be imposed either as a condition precedent to a merger, or their completion may be required within a certain period from the approval of the merger. Behavioural remedies, on the other hand, are always forward looking in that they consist of limits on future business behaviour or an obligation to perform a specific prescribed conduct for a given, sometimes considerable, period of time following the consummation of the merger. They often consist of non-discrimination obligations, firewall provisions or non-retaliation or transparency provisions or contracting limitations. Both types of remedies have their benefits and drawbacks. While the decision as to which type to use must be first and foremost guided by its suitability to address the competition risk at hand, the advantages and disadvantages of structural versus behavioural remedies must be carefully weighed as well. Generally, the benefits of structural remedies are of a one-off nature (which eliminates the need for subsequent long-term monitoring) and of relatively straightforward character. Their drawbacks, on the other hand, include high costs to the merging parties, potential disruption to relationship with customers, and their irreversibility (given the fact that some of the feared competitive risks are transitory). Behavioural remedies pose their own challenges. Often difficult to craft in order to capture all possible eventualities, they also require monitoring in order to ensure that the merged entity is adhering to them in the months and years following the consummation of the merger. Long lasting oversight of a company’s behaviour is something competition agencies typically are neither well-equipped nor entrusted to do. On the other hand, behavioural remedies offer clear advantages in vertical and conglomerate mergers, where structural remedies typically offer little help. In addition, they avoid the substantial disruption to the merging parties’ businesses that a divestiture would cause.”
Resale price maintenance.
Under section 76 of the Competition Act, it is a “reviewable practice” (i.e., civil matter) for a supplier of goods or services to influence a customer to raise its prices where this has an adverse effect on competition. Section 76 of the Act also prohibits dictating the prices at which goods or services are advertised (or the prices charged by any other person to whom the product comes for resale). Under section 76, it is also a reviewable practice for a person to refuse to supply goods or services to a person, or discriminate against them, based on their low pricing policy (and the conduct results in an adverse effect on competition). Finally, it is also a reviewable practice under section 76 for a person to actually induce a supplier to refuse to deal with another person because of that other person’s low pricing policy.
Whereas price maintenance under the Act was formerly a “per se” criminal offence (i.e., no market effects were needed to be proven), subject to criminal fines and imprisonment, since 2009 it has been a civil reviewable practice with a market effects test, under which the Competition Tribunal may make remedial orders based on applications made by the Commissioner of Competition (or private parties who are granted leave from the Tribunal).
OECD Policy Roundtable, Resale Price Maintenance (2008): “The term ’resale price maintenance’ (RPM) refers to a particular type of vertical agreement in which an upstream firm controls or restricts the price (or sometimes the terms and conditions) at which a downstream firm can on-sell its product or service, usually to final consumers. Resale price maintenance arises when an upstream firm – usually the manufacturer, producer, or importer of a good or service – limits or restricts the ability of a downstream firm – usually a distributor or retailer – to set the prices at which it on-sells the products of the upstream firm. Two different forms of RPM are usually distinguished: ―Maximum RPM places an upper limit or ceiling on the price the retailer can charge for the product. ―Minimum‖ RPM, on the other hand, places a lower bound or floor on the price at which the retailer can on-sell the product. Some countries treat both of these forms in the same way in their competition law. Most countries treat maximum RPM as being the lesser competition concern; in some cases maximum RPM is not illegal at all. Usually, for RPM to constitute a violation of competition law, the upstream firm must actively seek to penalise deviations from the prescribed prices – perhaps by threatening to cut-off supply to the retailer. In most cases, manufacturer ―recommended‖ retail prices do not raise competition concerns, provided departures from these recommended prices are not penalized. In some cases, the upstream firm may impose other, related conditions, such as a requirement to not advertise or promote a price which deviates from the minimum or maximum price. In some instances these practices will also constitute a violation of laws prohibiting RPM.”
European Commission, Commission Notice, Guidelines on Vertical Restraints (2010): “[Resale price maintenance refers to] … agreements or concerted practices having as their direct or indirect object the establishment of a fixed or minimum resale price or a fixed or minimum price level to be observed by the buyer.
Competition Bureau, Ensuring Truth in Advertising: “Under section 74.1(1)(d) of the Competition Act, the court is empowered to make restitution orders against parties who are found to have engaged in reviewable conduct by making materially false or misleading representations to the public under section 74.01(1)(a) of the Act. Restitution, along with the other remedies available under section 74.1 of the Act, serves as an additional incentive for advertisers to comply with the Act.”
“Reverse payment”, “exclusion payment” or “pay-for-delay”.
A term used in antitrust litigation involving patents.
Federal Trade Commission, amicus brief, In re: Lamictal Direct Purchaser Antitrust Litigation: “… patent settlements involving payments to delay entry by a lower-priced generic drug (sometimes referred to as ‘reverse payments’, ‘exclusion payments’ or ‘pay-for-delay’)”.
A term used to refer to the leader or instigator of a cartel (e.g., a price-fixing, market allocation/division or output/supply restriction agreement between competitors). Some jurisdictions’ enforcement agencies’ leniency programs exclude the ability of “ringleaders” to obtain leniency.
The Canadian Competition Bureau’s Immunity Program requires that immunity applicants must not have “coerced others to be a party to the illegal activity” for which immunity is sought. See Competition Bureau, Bulletin, Immunity Program under the Competition Act (2010). Parties that may not qualify for full immunity under the Bureau’s Immunity Program may, nevertheless, qualify for leniency under the Bureau’s Leniency Program.
Stephen Davies (ESRC Centre for Competition Policy) & Oindrila De (Indian Institute of Management, Indore), “Ringleaders in Larger Numbers, Asymmetric Cartels”, CCP Working Paper 12-10 (2012): “Presumably any conspiracy, whatever the context, is born from an individual/group’s realization that it may be practicable and profitable, and thus any cartel requires somebody to take the initial initiative – to at least instigate discussions. In that sense, probably every cartel requires one or more ringleaders. On the other hand, where there are only a few conspirators, all members of the group may be in on the conspiracy almost from the start and there is no need for any single instigating leader. This suggests that a fruitful way of expressing the question is to ask ‘under what circumstances, will a conspiratorial group choose to delegate or recognize (sometimes reluctantly perhaps) that one of its members should take on this role? This can then be viewed as an alternative to a default which is that all members share the responsibility, in which case there is no ringleader. … In summary, the precise roles of the ringleader will vary from case to case. Sometimes these may be largely facilitating, i.e., approaching new members, monitoring, and convening and conducting meetings, but sometimes they may be more aggressive – dictating price, coercing, and, where necessary, leading in the compensation schemes and punishment activities of the cartel.”
A term used in the telemarketing industry to refer to the use of “automated calling devices”.
See e.g., CRTC: “Automated calling devices are used to dial telephone numbers and automatically deliver a pre-recorded message. The CRTC’s Automatic Dialing and Announcing Device Rules prohibit telemarketers from using these devices to sell or promote a product or service unless a consumer has consented to be called by them. They can, however, be used by police and fire departments, schools and hospitals if they have a valid public service message to communicate. Automated calling devices can also be used for appointment reminders and thank you calls.”
U.S. Federal Trade Commission: “If you pick up the phone and hear a recorded message instead of a live person, that’s a robocall. If the recording is a sales message (not a call from your healthcare provider or a charity), and you haven’t given your written permission to get calls from the company on the other end, the call is illegal. Period.”
A type of fraud.
Canadian Anti-Fraud Centre: “Generally, Romance scams involve the victim and the fraudster meeting through a social networking site. The fraudster will gain the trust of the victim through displays of affection. While the fraudster is usually located in a far away country, eventually want to meet the victim in person. It is at this time the fraudster will advise they can’t afford to travel and will seek assistance from the victim in covering travel cost. Other variations include the fraudster presenting situations of emergency/ urgency, such as a sick family member, and seeking financial assistance from the victim for various costs. Some incidents have also occurred at the local level and involved the victims actually meeting the suspects to go out on dates and meeting at the victim residence. These cases are creating concerns for personal safety. For example, in one incident the victim reported having her wallet and some jewelry stolen from home.”
Rule of reason.
A standard of review for potentially anticompetitive conduct contrasted with a per se standard of review, which requires an analysis of a challenged restraint’s effect on competition in a relevant market.
U.S. Federal Trade Commission and Department of Justice, Antirust Guidelines for Collaborations Among Competitors (2000): “Agreements not challenged as per se illegal are analyzed under the rule of reason to determine their overall competitive effect. These include agreements of a type that otherwise might be considered per se illegal, provided they are reasonably related to, and reasonably necessary to achieve procompetitive benefits from, an efficiency-enhancing integration of economic activity. Rule of reason analysis focuses on the state of competition with, as compared to without, the relevant agreement. The central question is whether the relevant agreement likely harms competition by increasing the ability or incentive profitably to raise price above or reduce output, quality, service, or innovation below what likely would prevail in the absence of the relevant agreement.”
Chicago Board of Trade v. United States, 246 U.S. 231 at 238 (1918): “The true test of legality is whether the restraint imposed is such as merely regulates and perhaps thereby promotes competition or whether it is such as may suppress or even destroy competition. To determine that question the court must ordinarily consider the facts peculiar to the business to which the restraint is applied; its condition before and after the restraint was imposed; the nature of the restraint and its effect, actual or probable. The history of the restraint, the evil believed to exist, the reason for adopting the particular remedy, the purpose or end sought to be attained, are all relevant facts.”
R.A. Jablon, A.G. Patel & L.M. Nurani, “Trinko and Credit Suisse Revisited: The Need for Effective Agency Review and Shared Antitrust Responsibility”, note: “Standard Oil Co. v. United States, 221 U.S. 1 (1911) and United States v. Am. Tobacco Co., 221 U.S. 106 (1911) were issued within the same month, and lay the foundation for the ‘rule of reason,’ which finds the Sherman Act does not prohibit all restraints on trade, but only those which cause an undue restraint. Standard Oil, 221 U.S. at 62; Am. Tobacco, 221 U.S. at 179. Both cases emphasized that the ‘rule of reason’ was needed to prevent the destruction of ‘the individual right to contract and render difficult if not impossible any movement of trade in the channels of interstate commerce — the free movement of which it was the purpose of the statute to protect.’ Am. Tobacco, 221 U.S. at 180; accord Standard Oil, 221 U.S. at 62 (‘the freedom of the individual right to contract when not unduly or improperly exercised was the most efficient means for the prevention of monopoly’). Standard Oil, 221 U.S. at 66, 69- 70 also stresses that it is the judiciary’s responsibility to make a case-by-case examination to determine if a party has engaged in an undue restraint on trade.”
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