October 3, 2013
Earlier today the Competition Bureau published for public consultation a new draft Inquiries Bulletin. Canada’s new Commissioner of Competition, John Pecman, also outlined some of the Bureau’s priorities and made new announcements in remarks delivered at the annual CBA Fall Competition Law Conference in Ottawa.
New Draft Inquiries Bulletin
In making its Inquiries Bulletin announcement, which is part of the Bureau’s recent “Enhancing Transparency” initiative, the Bureau said:
“The draft Bulletin summarizes how and when the Bureau generally communicates during an inquiry with parties under inquiry, other stakeholders and the public, in an effort to promote transparency regarding the Bureau’s work and compliance with the Competition Act. Through the consultation, the Bureau seeks to receive input to help identify potential areas where communication efforts during an inquiry might be improved. The Bureau welcomes all relevant input from the public.”
Bureau Enforcement Generally
The Bureau has a range of enforcement powers under the Competition Act, a number of which become available when the Bureau commences a formal “inquiry” (an internal investigation step, which can be triggered following a consumer or competitor complaint or on the Bureau’s own initiative). These powers include the ability to obtain court orders to search premises and seize documents; search and seize computer records; tap phone lines; require individuals to testify under oath; and oblige individuals or corporations to provide documents or responses to written information requests.
Although the Bureau is responsible for investigating alleged violations of the Competition Act’s criminal offences, prosecution for criminal competition law matters in Canada is the responsibility of the Public Prosecution Service of Canada (or “PPSC”), headed by the Director of Public Prosecutions (or “DPP”). The Bureau refers criminal matters to the DPP for prosecution, along with any recommendations on sentencing and whether the DPP should grant parties immunity from prosecution or other lenient treatment (i.e., a reduction in penalty) under the Bureau’s Immunity and Leniency Programs. The DPP then has the authority to decide whether it is in the public interest to commence criminal proceedings and what penalties to seek or immunity/leniency to grant.
On the civil side, the Bureau can both investigate and initiate and commence proceedings in relation to the civil provisions of the Competition Act. The main responsibility for adjudicating these applications rests with the federal Competition Tribunal, a specialized administrative body consisting of judges and lay experts such as economists, though the Bureau can also commence civil proceedings for some matters (e.g., misleading advertising) in provincial courts or the Federal Court.
Highlights of the New Inquiries Bulletin
Some of the key points of the Bureau’s new draft Inquiries Bulletin include:
1. Notice. The Bureau will generally notify targets of an inquiry (commencement/discontinuance, relevant sections of the Act, general nature of the inquiry and responsible case officer), though will not necessarily notify parties before it takes enforcement steps. The Bureau also confirms that it will continue to seek search warrants or other compulsory production orders (e.g., section 11 orders, wiretaps and interim orders) on an ex parte basis (i.e., without notice to targets).
2. Criminal inquiries. With respect to criminal inquiries, the Bureau will also generally contact targets (and provide the information listed above) unless the Bureau is relying on compulsory production orders (e.g., search warrants), confirm periodically (every six months) whether the inquiry is continuing and notify parties of a prosecution recommendation “at or around the time” a matter is referred to the DPP for prosecution. The Bureau will also notify parties when an inquiry is discontinued or when the Bureau feels that an alternative case resolution is the appropriate route to a resolution. As for whether a civil or criminal track is pursued (e.g., in relation to Canada’s new two-track criminal/civil conspiracy provisions or misleading advertising, which can be enforced civilly or criminally), the Bureau states that the determination of track will be fact-specific, the Commissioner will endeavor to make a “timely decision” and will generally notify parties once a decision is made.
3. Civil Matters. For civil matters, the Bureau states that it will generally also provide notice to parties (along the lines of its general approach and in respect of criminal matters above), unless it is also relying on compulsory process (e.g., search warrants or section 11 orders). The Bureau also encourages parties to approach the Bureau case team at any time to discuss alternative resolutions, states that it will notify parties if an inquiry is discontinued and may contact parties to discuss alternative case resolutions (i.e., as opposed to contested proceedings or settlements under consent agreements). The Bureau also discusses its willingness in its draft Bulletin to generally participate in without prejudice settlement discussions at the commencement or during an inquiry.
4. Communications with industry, complainants and the public. The Bureau’s new draft Bulletin also describes the Bureau’s position regarding communications with industry, complainants and the public during inquiries. In this regard, the Bureau describes its ability to approach market participants at any stage of an inquiry (with no obligation to provide 3rd parties with information); communications with complainants (including a right to an update on the status of an inquiry and if discontinued); and reiterates past Bureau practice of not generally making public announcements of inquiries, which are in general conducted privately (and governed by the confidentiality provisions of the Competition Act under section 29 and legal privileges).
Guidelines, Guidelines and More Guidelines
In his remarks earlier today, Canada’s new Commissioner of Competition John Pecman reiterated and expanded on several previously announced Bureau initiatives. These include a continued desire for more consultation with Canadians, the competition law bar and targets of investigations (citing a number of recent civil and criminal settlements achieved by the Bureau), new Bureau Bulletins (the Inquiries Bulletin, discussed above, and new Confidentiality Bulletin), recently updated Immunity and Leniency Program FAQs and the Bureau’s recently announced advocacy consultation, calling for suggestions for “strategic interventions” into key regulated markets for increased competition.
The Commissioner also made several new announcements, including plans to update and rebrand the Bureau’s Conformity Continuum Bulletin (which governs, among other things, the Bureau’s approach to the legislation it administers and the type of resolution or penalties to seek in a particular case) and its Compliance Bulletin (which sets out the Bureau’s position on competition law compliance programs and what are in its view essential elements of a credible and effective compliance program). According to the Bureau, it will be seeking input from the competition law bar and the public for suggested changes to these enforcement and compliance related guidelines.
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