Price fixing legal in Canada?
 

***Please note that with some items we are obligated to honor manufactures pricing guidelines. All of these products are already set at the minimum price allowed by the manufacture and we cannot lower them any further.***

Just wondering...

I got this from a link that Chin provided.

This is illegal (but does happen) in the UK. Does the fact that it's clearly stated on their website mean that price fixing by manufacturers/distibuters is legal here in Canada?

(Sorry, a Brit still getting used to being in Canada!)

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I just read the Wiki entry here http://en.wikipedia.org/wiki/Price_fixing

Allthough it seems it is illegal I am sure it happens more than we will ever know.

oh well. I was hoping Canada would be less corrupt than the UK.

I guess business is business wherever you are in the world.

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MSRP is more like it, they just worded it poorly. Most retailers will not go below the MSRP, as doing so usually results in price wars. This is a headache for both the retailers and manufacturers involved.

In any case, I doubt there's that much gouging going on in aquarium industry (I've already laid that to rest with my Bubble King example in a previous post).

Go
 

Car makers such as Toyota advertise "no dicker sticker" and require all their dealers to charge MSRP. Can't see it being illegal to require retailers not to discount from MSRP if the car makers advertise they are doing so.
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Honda CB450DX-K

In a market where you are talking about a single manufacturer or supplier setting prices with their distribution/retail partners, and where there is otherwise open competition for functionally similar goods (no monopoly and no collusion), I can't see how it could or should be illegal to control prices throughout the supply chain. Difficult, yes. Illegal?

My initial question was based on the fact that price-fixing is an offense under Euopean Union Law that is punishable by HEAVY fines and custodial sentencing.

This applies to a single company or distributor fixing prices with multiple resellers/retailers (eg. if BMW refused or restricted supply to dealers that discount more than a set amount) or a collective of companies agreeing prices together (eg. if Wal-Mart, Tesco, Safeway were fixing milk prices).

I know it still goes on but as a European I was suprised to see it so blatantly disclosed on a website.

British Airways recently faced a $1.7b fine over price-fixing.

Anyways, I just dug this up...

So price-fixing does seem to be Illegal under Canadian Law but only if it 'unreasonably' enhances prices.

That just leaves the courts to decide what is 'unreasonable'

Competition Act, R.S.C. 1985, ch. C-34 (1985) (Canada)

A conspiracy to enhance unreasonably the price of a product (“pricefixing”)
is one of the criminal provisions listed under Part VI of the Competition Act:

45. (1) Every one who conspires, combines, agrees or
arranges with another person

(a) to limit unduly the facilities for transporting,
producing, manufacturing, supplying, storing or
dealing in any product,

(b) to prevent, limit or lessen, unduly, the
manufacture or production of a product or to
enhance unreasonably the price thereof,

(c) to prevent or lessen, unduly, competition in the
production, manufacture, purchase, barter, sale,
storage, rental, transportation, or supply of a
product, or in the price of insurance on persons or
property, or

(d) to otherwise restrain or injure competition
unduly, is guilty of an indictable offence and
liable to imprisonment for a term not exceeding
five years or to a fine not exceeding ten millions
dollars or to both.


(man I really should get back to work! :))

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My understanding is that when two or more competitors get together and set their pricing, this is illegal. However it is not illegal for a manufacturer or distributor to dictate the selling price of their product. It is not illegal for a distributor to demand absolute pricing on their products and to penalize by no longer allowing the retailer to sell their products for not addearing to their price policy.

Tom R

So the difference between EU & Canadian Competition Law is that, in Canada a single manufacturer, distributor or supplier can demend absolute pricing, whereas in the EU that would be a punishable offence?

Thanks for helping me understand a little better.

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I think the key that people overlook with price fixing is that for it to be price fixing it has to happen between companies that are normally competitors. I don't know what the British Airways offence was over, but I'll elaborate with them as an example. British Airways stating that for example to fly from London to Paris is going to cost you 100 Euros is perfectly fine and legal under anybodies rules. British Airways getting together with Air France and BOTH of them saying that the flight from London to Paris is 100 Euro's is defineatly price fixing and anti-competitive.