Area of Law: Consumer Law
Answer # 818
Can a business be held criminally liable?Region: Ontario Answer # 818
The federal Competition Act provides several criminal penalties for certain types of business practices. For example, it is against this law for businesses to conspire or plot to prevent, limit, or lessen competition in the trade of goods or services. This might happen if two or more businesses in town decided to charge everyone the same price for a good or service and drive any competition out.
The penalty for a conspiracy conviction can be imprisonment for a term of up to 14 years and a fine not exceeding $25 million per offence. Other criminal offences include:
- Price discrimination (giving discounts or rebates to one purchaser which are not given to others buying goods of like quality and quantity)
- Predatory pricing (selling products for unreasonably low prices)
- Reckless or knowingly misleading representations in advertising or contracts
Prosecution of these offences is not common, though the competition authorities do tend to pursue large businesses, such as department stores or national chain stores.
Note that the federal competition law also allows any person who has suffered a loss from these criminal activities to sue in civil court to recover the loss plus legal costs. This is a relatively new right for consumers. An interesting aspect of this law is that evidence from any criminal proceeding (such as a voluntary plea of guilt or no contest) can be used in the private lawsuit — making a consumer’s case very easy to win when a criminal prosecution by the federal government has been successful.
Competition authorities can also investigate and stop business practices that are not illegal or criminal, but contrary to consumers’ interest. These include unreasonable refusals to deal with specific consumers and any abuse of dominant market position.
The federal Competition Bureau is the independent law enforcement agency that administers the Competition Act. The Bureau protects consumers by promoting competitive markets and investigating anti-competitive activities.
For legal advice and assistance, contact a lawyer, or paralegal.
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