Competition Act
The Competition Act is Canada’s main federal law for preventing business practices that substantially lessen competition or deceive consumers. In ADMN 201 it appears under government’s role as regulator.
Why It Matters
Private enterprise depends on competition. If firms can collude, mislead consumers, force resale prices, or run deceptive promotions, markets stop allocating resources efficiently. The Competition Act is one way government protects the competitive system without replacing it.
Exam-Relevant Provisions
| Section | Prohibits | Plain-English Cue |
|---|---|---|
| 45 | Conspiracies or combinations that unduly lessen competition | Price-fixing, collusion |
| 50 | Illegal trade practices such as predatory or discriminatory pricing | Cutting prices in one region to hurt rivals |
| 51 | Unequal allowances or rebates to buyers | Secret rebates unavailable to competing buyers |
| 52 | False or misleading marketing, including telemarketing | Advertising claims that deceive consumers |
| 53 | Deceptive prize notices | ”You won” but must pay to claim |
| 54 | Charging the higher price when two prices are shown | Scanner price / shelf price conflict |
| 55.1 | Pyramid selling | Compensation mainly for recruiting others |
| 61 | Resale price maintenance | Manufacturer forces retailer to keep a set price |
| 74 | Bait-and-switch and promotion abuses | Advertise a deal that is unavailable, then push another product |
Core pattern
Most exam scenarios ask: is the business harming competition, misleading consumers, or manipulating prices/promotions?
Scenario Sorting
| Scenario | Best Match |
|---|---|
| Competitors secretly agree to raise bread prices | Section 45 conspiracy/collusion |
| A firm sells below cost in one area to drive out a local rival | Section 50 illegal trade practice |
| Ad says “limited time $49” but product is never available | Section 74 bait-and-switch |
| Product shelf shows 12 | Section 54 two-price issue |
| Participants earn mainly by recruiting new participants | Section 55.1 pyramid selling |
| Manufacturer threatens retailers for discounting | Section 61 resale price maintenance |
Bread Price-Fixing Example
The exam review notes use the bread-pricing case as an example of alleged collusion: Loblaw and several other large retailers were accused of conspiring to inflate bread prices over many years. The concept lesson is not the legal outcome; it is that competitors coordinating prices is the type of behaviour the Act targets.
Related Notes
BusinessGovernmentRelations — government role as regulator
DegreesOfCompetition — why competition needs protection
PrivateEnterprise — competition is one of the four pillars
PricingStrategies — legal pricing must avoid anti-competitive tactics
PromotionalMix — promotion must not become misleading advertising
Key Points for Exam/Study
- Competition Act = federal law protecting competition and consumers.
- It belongs under government’s regulator role.
- Know the big buckets: collusion, illegal pricing, misleading marketing, deceptive promotions, pyramid selling, resale price maintenance.
- Section 45 = collusion/conspiracy; Section 52 = misleading marketing; Section 74 = bait-and-switch.
- Competition law supports private enterprise by keeping competition real.