REVIEWS
| Published date | 01 January 1958 |
| Date | 01 January 1958 |
| DOI | http://doi.org/10.1111/j.1468-2230.1958.tb00462.x |
REVIEWS
THE
LAW
OF RESTRICTIVE
PRACTICES
AND
MONOPOLLES.
By
R.
0.
WILBERPORCE,
Q.c.,
ALAN
CAMPBELL,
MA,
and
NEIL P.
M.
ELLES,
M.A.
Consulting Editor,
R.
GRESHAM
COOKE,
c.B.E.,
M.P. [London: Sweet
&
Maxwell, Ltd. 1957. xxiv
and
(177
pp.
€4
4s.
net.]
MONOPOLIES
AND
RESTRICTIVE TRADE PRACTICES.
By
MICIIAKL
ALBERY,
Q.C. and
C.
F. FLETC~R-COOKE,
M.P.
[London:
Stevens
&
Sons,
Ltd. 1956. xvi
and
185
pp.
27s.
6d. net.]
Tim
nuthors
of one of these books comment on
one
subsection
(s.
7
(2)
)
of
the recent Restrictive Trade Prncticcs Act
:
“
Whether
or
not this subsection
is intelligible to business men, it is certainly cnlculnted to create difficulties for
lnwyers” (Wilberforce,
p.
298).
Business men and
other
laymen are likely
to
sny
the snme nbout it, transposing the two operative nouns. And the discussion
in these two books mnkes
it
clear thnt the snme sort of comment applia
equally to mnny other important scctions of an Act which may have fnr-
reaching effects on
the
economy and on pnrticular branches of industry and
trade. Mnny important issues will only be clnrified wlicn there has been
I)
body of interpretntive decisions both in the ordinary courts
(e.g.,
on
the
rcgistrnbility of ngreements and the interpretntion of pnrts of
Part
I1
covering
resale
price maintenance) and in the new Restrictive Practices Court (on the
crucial but enigmatic section
21).
In tlie meantime both teams of nuthors have tried mnnfully to translate the
bare words of the Act into more immediately comprehcnsiblc and concrete
terms.
No
one
rending either of the two works can fail to hnve his eyes opened to possible
intcrpretntions
or
implications wliich had been missed previously. In this
respect lawyers nctively concerned with the legislation will find it useful to
consult both the works, since they sometimes supplement one another nnd on
occasion suggest conflicting interpretations.
The
prncticnl utility of the
volumes is not rcduced by the fact that sometimes the authors have to concede
victory to the drnftsmcn responsible for the words used in the Act.
The
word
“specific” in pnrticular
has
caused understandable difficulty. Of its
use
in
section
0
(7)
[‘I
spccifle recommendations
”
made by trade associations] Wilber-
force
et
al.
write
:
“
It
is not clear what sipificance (if any) is
to
be
attnched
to the word ‘specific’ since it
is
difficult to
see
how any rccomnicndntion,
which is not void for uncertainty, can fnil to he specific.
The
conception of
n
specific implied rccominendation is even more difficult
”
(p.
291).
Of the
use
of the word in section
31 (1)
(a)
[“specific benefits
or
ndvnntngcs” to con-
sumers], Albery and Fletclier-Cooke comment
:
“
in this context it smacks
more of journnlism than of the law”
(p.
46).
But one of their tentative
interpretations tlint it connotes
“
short term
”
rather than
“
long
tcrin
”
seems
to hnve little
to
commend it. The Monopolies Commission, it may be noted,
hnve on occasion considered somc long-term bcncfits
to
be sufficiently vnlunble
to condone
a
rcstrictive practice.
In the space of
R
review it is not possible
to
consider all the poin9
of
interest
or
controversy which
nre
raised by these two books. Instead, one topic
is
selected for detailed comment-the importnnt section
21.
Section
21
provides, broadly, thnt in any proceedings before thc Restrictive
Prnctices Court
a
registered agreement shnll be deemed
to
be against
the
100
The
results of their endeavours
nre
likely to be helpful.
JAN.
1968
REVIEWS
101
public interest unless the court is satisfied both that the agreement falls within
the scope of one
(or
more) of seven specified “justifications,” and also that
the benefits of the agreement outweigh its detrimental effects. In very rough
terms the seven tests (the seven so-called gateways) require, respectively, that
the agreement is necessary for (a) the protection of the public from injury,
(b) the provision of some other “specific and substantial” benefits to con-
sumers, (c) the countering of the restrictive measures of
a
monopolist, (d) the
safeguarding of the negotiation of
‘‘
fair terms” with
a
preponderant buyer
(or seller), (e) the avoidance of serious and persistent unemployment, (f) the
maintenance of export earnings, and (g) the effective maintenance of another
restrictive agreement.
Albery and Fletcher-Cooke deal with this section informatively in
a
straight-
forward and uncomplicated manner.
Inter
alia,
they make the interesting
suggestion (p.
bG)
that the wording of
the
second part of
the
section (the
so-called tailpiece) may be construed
so
as
to shift the burden of proof from
the parties to the agreement, once they have justified the agreement. But
perhaps the rpestion of the location of the onus of proof will not be important
in practice, since
at
critical points the argument will almost inevitably be
concerned more with the appropriate hypotheses
or
presuppositions (concerning
the effects of competition) to be invoked
or
the appropriate set
of
weights (for
balancing benefits against detriments) to be used than with statements or
assertions that are amenable to direct proof
or
disproof. The authors also
make the interesting point
in
connection with justification
(f)
[protection
of
export
earnings] thnt
‘I
‘
earnings
’
presumably mean
gross
receipts and not net
earnings; to discover the latter would be an impossibly complicated task”
(p.
53).
However, the task
is
no more impossibly complicatcd
”
than the task
of establishing other effects of restrictive agreements. Generally, section
21
would seem to involve matters of judgment and opinion; and in this respect
it is no more “complicated” to arrive
at
an opinion on the effects
of
an
agreement on net export earnings than on, say, the negotiation of
‘I
fair term’’
with
a
monopolist (justification
(d)
)
or
on long-term unemployment (justifica-
tion (e)
).
Moreover, from the point of view of an economy with balancesf-
payments dillicultics, the important magnitude is
net
and not
gross
export
enmings. But the Act gives no real guidance here.
Wilberforce
et
al.
approach section
21
in an apparently more penetrating
manner, but their approach,
I
believe, is not helpful. They submit, in effect,
that
”
with certain important reservations
”
is
“to promote conditions of increased competition in trade in goods,” and
that this general
purpose”
supplies
a
workable criterion for the adjudication
of registered agreements (p.
868).
(For
purposes
of
discussion we may accept
this inference of the general purpose
of
Part
I
of the Act, though
this
purpose
is not mentioned specifically in the Act.
It
should be noted that some agree-
ments which do not affect competition may be registrable,
e.g.,
a
simple
agreement among manufacturers not to raise thcir individually determined
prices during
a
period of inflation.) Clenrly, much will depend upon the
reservations. Here the authors make
a
digtinetion. The reservations implicit
in
justifications (a), (e) and (f) [regarding public safety, employment and
exports, respectively], they say,
‘I
introduce other values [not related to com-
petition
at
all], the weighing of which against circumstances relating to
competition involves
a
different type of value judgment which
is
appropriate
.
. .
for
a
politician, but outside the competence of others, whether economists
or
lawyers” (p.
867).
They suggest, therefore, thnt when the court is satisfied
that an agreement is justified in terms
of
(a), (e)
or
(f),
this “should be
treated
as
overriding.” In other cases, however, the court will have regard
to
the general effect
[of
the agreements] upon competition in the trade
concerned
”
(p.
368).
The distinction
is
ingenious. But is it really more dificult-or less congenial
to
the judicial mind-to weigh
a
reduction of export earnings against the
detriments of restrictioni than it
is
to weigh the deprivation of ‘*substantial
the general purpose of the
Act
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