LEGAL POSITION OF MONOPOLISTIC COMBINATIONS Great Britain.—The legal position of monopolistic combina tions is determined (unless authorized by special statute) by their status at the common law. This status is decided, in general, by applying, in a given case, the common law doctrine of restraint of trade. Contracts or agreements in restraint of trade are in principle unenforceable, though they are not actually illegal unless they involve an illegal act. Nevertheless a contract which is technically in restraint of trade has long been regarded by the courts as valid and enforceable when it involves a particu lar restraint which is not larger than the protection of the party with whom the contract was made reasonably requires. The doctrine of the unenforceability of contracts in constraint of trade is part of the larger legal doctrine of "public policy," which is in terpreted in economic matters as equivalent to freedom of trade, or disapproval of measures in restraint of trade. In recent years however, the courts have shown a perception of the fact that free competition is not necessarily in the interests of the community, and that, on the contrary, competition may be accompanied or fol lowed by serious disadvantages. There has consequently been a tendency for the law relating to combinations to be stated with modifications. Such modifications have become so general, in fact, that it is the exception, rather than the rule, that an alleged illegal combination will be held invalid as involving an unreasonable re straint of trade. Numerous types of restraint practiced by combi nations have been held, under common law, to be reasonable and not contrary to public policy. Included have been such character istic agreements as those restricting competition, fixing prices, maintaining resale prices, establishing exclusive dealer arrange ments, and granting deferred rebates. The post-World War diffi culties of British industry and trade encouraged an increasingly tolerant attitude by the Government toward combines. This atti tude has resulted in encouragement and even dictation of combi nations in certain basic industries. In some industries definite forms of combination have been legalized by specific legislation of Parliament. In other instances encouragement has been given by
means of administrative policies, but no specific pattern of combi nation has been established by statute. Agriculture and herring fishing are among those industries which belong to the former group; the iron and steel and chemical industries typify the latter.
Canada.—Canadian policy has been embodied in a series of laws enacted since 1889. In that year, certain sections of the Crim inal Code were drawn to cover instances of conspiracy in restraint of trade. These sections, amended in 1899 and 1900, provide pen alties against those who combine or agree with others to limit unduly facilities for the production or distribution of, restrict unduly production or enhance the price of, restrict unduly compe tition in the production or distribution of, or restrain or injure trade in articles of trade or commerce. An amendment enacted in 1935 prohibits rebate or discount discriminations, by dealers, as between purchasers buying under similar conditions, and makes it an offence for dealers to engage in area price discrimination or to sell at unreasonably low prices in order to destroy competi tion. The Criminal Code safeguards are supplemented by the Combines Investigation Act. This law, enacted in 1910 and fre quently amended since, imposes heavy penalties upon every person or corporation "who is a party . . . to or knowingly assists in the formation or operation of a combine. . . ." "Combine" is broadly defined to include any combination, obtained by merger, lease, agreement, or other method specified, which has operated or is likely to operate to the detriment of the public by limiting facili ties for production or distribution ; restraining production ; fixing common prices or resale prices ; enhancing prices ; preventing or lessening competition ; substantially controlling production or distribution; or otherwise restraining or injuring trade or com merce. The Dominion Trade and Industry Commission ad ministers the law and investigates unfair trade practices.