May 24, 2013
The C.D. Howe Institute has published a new report on a topic that is near and dear to my heart – the regulated conduct doctrine and monopolies, er regulated markets, in Canada: Beer, Butter and Barristers: How Canadian Governments Put Cartels Before Consumers.
In many of my conversations about Canadian competition law I get asked why, if cartels are illegal, there seem to be so many in Canada (i.e., protected industries). An excellent question and a seemingly established Canadian practice that this new report directly challenges.
Overview:
“In Canada, various sectors of the economy are subject to government regulations, many of which are designed to correct market failures. However, such regulations are generally inconsistent with federal competition law, which aims to promote economic efficiency by maintaining the integrity of competitive markets.
The courts have resolved this tension by developing the Regulated Conduct Defence (RCD) – an interpretive judicial doctrine that immunizes various regulatory regimes from the application of competition law. In this Commentary we challenge the wisdom of the RCD from an economic and legal standpoint. In particular, we criticize the view, established by the courts, that regulations conflicting with competition law should be deemed to operate in the public interest.
We argue that certain regulatory regimes advance private interests at an unreasonable cost to consumers. Our analysis includes three examples of regulatory regimes that interfere with competitive forces but nevertheless benefit from immunity to competition law: agricultural supply management, private alcohol retail, and legal services.
We propose: (i) clarifying the Competition Act’s application to regulated conduct; (ii) where practicable, limiting the scope of immunity for regulated sectors such that if regulation is deemed necessary, it is narrowly tailored to be minimally impairing to competition; and (iii) requiring the federal government to assess the competitive effects of all legislation prior to enactment.”
For a copy of the report see: here.
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I am a Toronto competition and advertising lawyer offering business and individual clients efficient and strategic advice in relation to competition/antitrust, advertising, Internet and new media law and contest law. I also offer competition and regulatory law compliance, education and policy services to companies, trade and professional associations and government agencies.
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