Tuesday, August 27, 2013
Posted by D. Daniel Sokol
Charles Paul Hoffman McGill University - Faculty of Law offers A Reappraisal of the Canadian Anti-Combines Act of 1889.
ABSTRACT: In 1889, in response to growing concern about the role of cartels and other "combines" in the economy, the Canadian parliament passed the Anti-Combines Act, the world’s first modern competition statute. A tentative first step, the Act made it a misdemeanour to enter into agreements that were previously unenforceable under the contract law restraint of trade doctrine. The Act, however, was not a success, with only a single prosecution (which resulted in acquittal) brought under it prior to its amendment in 1900. Since that time, it has been broadly criticized in the academic literature, with critics alleging three reasons for its failure: that it extended only to conduct already "unlawful" under the restraint of trade doctrine; that it criminalized only conduct already indictable under the crime of conspiracy; and that it was an intentional failure, a "political sham". Each of these critiques, however, is built on a flawed understanding of the restraint of trade doctrine, reading back into the law in 1889 two House of Lords’ decisions from the 1890s, Mogul Steamship v McGregor, Gow (1892) and Nordenfelt v Maxim Nordenfelt Guns & Ammunition (1894), which made it substantially more difficult to prove agreements were unreasonable vis-a-vis the public interest. Though the Act would not have been the panacea intended by its chief sponsor, Nathaniel Clarke Wallace, it would have been a useful tool against the most pernicious of combine agreements, had the law remained as it was at the time of enactment. The Anti-Combines Act should thus be remembered not for its failure, but as a Canadian legislative innovation hampered by judicial decisions rendered in Westminster.