In an interesting story in yesterday’s Globe, Jeff Gray reported on a recent decision by the U.S. Court of Appeals for the Seventh Circuit reviving a U.S. antitrust suit against Potash Corp., Agrium Inc. (and several other firms: Mosaic Co. and four Russian and Belarussian potash companies). The plaintffs in this case allege that the seven firms controlled 71% of the world’s potash supply and that they coordinated cuts to production to maintain prices. The case is an interesting example of an alleged output restriction cartel (in Canada, section 45 of the Competition Act prohibits agreements between competitors to restrict output/supply) and a challenge against an export cartel (Canadian competition legislation includes a number of exemptions, including for agreements relating only to exports). Like Canada, however, the U.S. is an “effects” jurisdiction, in that agreements formed abroad that may adversely impact U.S. consumers can be challenged under U.S. antitrust laws. According to the Globe, the recent Court of Appeals ruling reversed an earlier decision quashing the case now in the favour of the plaintiffs and apparently the U.S. DoJ and FTC (who filed submissions in the case). Also interesting is that the pleadings challenge Canpotex Ltd. the Potash/Agrium/Mosaic JV that sells potash outside North America.
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