On March 20, 2012 the Competition Bureau announced that Canadian Tire Corporation, Pioneer Energy LP and Mr. Gas pleaded guilty in Ontario Superior Court in Brockville, Ontario to fixing the price of gasoline in 2007 at the pump and were fined $2 million.
In making the announcement, the Bureau said:
“’Consumers in Kingston and Brockville were denied a competitive price for gasoline as a result of this criminal price-fixing cartel,’ said Melanie Aitken, Commissioner of Competition. ‘The Bureau will not hesitate to take action when it uncovers evidence of illegal price-fixing.’
The pleas are as follows: Pioneer Energy LP pleaded guilty to price-fixing in Kingston and Brockville, and was fined $985,000; Canadian Tire Corporation pleaded guilty to price-fixing in Kingston and Brockville, and was fined $900,000; and Mr. Gas pleaded guilty to price-fixing in Brockville and was fined $150,000.
Today’s criminal charges and guilty pleas are the result of an extensive Bureau investigation that found evidence that gas retailers or their representatives in these local markets phoned each other and agreed on the price they would charge customers for gasoline. The Bureau’s investigation into potential price-fixing in the retail gasoline market continues in the Southeastern Ontario market.”
Under section 45 of the Competition Act, three types of agreements between competitors are “per se” illegal (i.e., with no adverse competitive impacts required to be shown):
1. Price-fixing agreements. Agreements to fix, maintain, increase or control the price for the supply of a product.
2. Market allocation/division agreements. Agreements to allocate sales, territories, customers or markets for the production or supply of a product.
3. Output/supply restriction agreements. Agreements to fix, maintain, control, prevent, lessen or eliminate the production or supply of a product (which may include group boycotts).
Other types of agreements between competitors are now potentially subject to review under a second and separate non-criminal reviewable matters provision (section 90.1).
In the Bureau’s accompanying Backgrounder, it describes using search warrants and wiretaps in its investigation and relying on its Immunity and Leniency Programs to detect the cartel.
The Competition Bureau has formal Immunity and Leniency Programs under which applicants may receive full immunity from prosecution (or reductions in penalties) for cooperating with an investigation.
Under the Bureau’s Immunity Program, a party or company implicated in criminal conduct under the Act may offer to cooperate with the Bureau in its investigation and request immunity (i.e., full immunity from prosecution for criminal offences under the Act). The criminal provisions of the Act include section 45 (conspiracy), section 47 (bid-rigging) and section 52 (criminal misleading advertising).
Under the Bureau’s Leniency Program, parties that have contravened criminal provisions of the Act that are not entitled to full immunity (e.g., they are not “first in”) may nevertheless be eligible for leniency in sentencing.
For the Bureau’s news release see:
Gasoline Companies Plead Guilty to Price-fixing in Kingston and Brockville, Ontario
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