social regulation

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topics
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1.
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definition
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– type of business regulation: uses coercion rather than incentives to shape behaviour – authority policy instrument (uses threat and sanctions for noncompliance) – accepted by businesses because its less intrusive than public ownership – largely focuses on social and environmental effects of production process – less intrusive than economic regulation
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types (5)
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1. 2. environmental regulation 3. fairness regulation 4. cultural regulations 5. competition policy
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health and safety regulation
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eg. food premis inspections, safe food prep and handling
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environmental regulation
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– vehicle emission standards – protection of land and natural resources
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fairness regulation
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– truth in advertisement – food label accuracy and standards – fair wages
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cultural regulations
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– canadian content regulations (protect canada from being overwhelmed with US cultural content)
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competition policy
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– purpose: keep markets competitive – enforced by the Competition Bureau – called Competition Act – insulated from political interference
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anti-competitive practices (4)
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1. collusion – agreement between competitors over price, quantity, deter new entries, market shares – eg. gas stations in proximity often have the same price – difficult for investigators to prove but proven in kingston amongst gas stations 2. anti-competitive merges – 2+ firms combine – efficiency from economies of scale < loss of competition – competition bureau must be notified of mergers of a certain transaction size (amount of assets) – eg. TD and CIBC couldn't merge because they would be too big to fail/bail 3. abuse of market power – dominant firm takes advantage of its dominant posiiton a) predatory pricing (selling lower than it should) b) preemption of resources (hoarding) c) exclusive dealing (not letting supplier sell to competitors) 4. deceptive marketing practices a) truth in advertising b) double pricing (must sell at lower of prices) c) pyramid schemes: buy and sell to others for a fee
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problems from regulatory agencies
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1. supposed to have political autonomy from gov in power = reduces electoral accountability, do not serve interests of people 2. regulatory capture = rely on info from industries, possible bias, and close interactions with regulated industries – eg. Canada Revenue Agency = investigating KPMG for tax avoidance but maintained close connections

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