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October 29, 2017

On October 26, 2017, the Competition Bureau (the “Bureau”) issued its revised draft Immunity Program for public comments. The Bureau is updating its Immunity Program to reflect recent legal and policy developments (see here).

The Commissioner of Competition originally announced in late 2015 that the Bureau planned to update its Immunity Program. For the past two years, it has been consulting with the PPSC (who conducts criminal Competition Act prosecutions) and Canadian and American bar associations.

Earlier this fall, the Senior Deputy Commissioner of Competition outlined the Bureau’s plan to increase the required number of Immunity Program steps from three to four and add an Interim Grant of Immunity (“IGI”) stage to the existing Marker, Proffer and Immunity Agreement steps.

According to the Bureau, this key change (i.e., addition of an IGI step), which has now been included in its revised draft Immunity Program is intended to provide the Bureau with documents and access to witnesses more quickly than under the current Program (and provide for full disclosure to be completed within six months of an IGI being issued).

Other changes to the Immunity Program, according to the Bureau, are meant to preserve key aspects of the Program, including the availability of immunity to current and possibly former directors, officers and employees. The proposed changes, however, appear to me to be fairly significant and will add a level of complexity and additional burden for immunity applicants.

Overview of Immunity and Leniency Programs

In general, parties that have committed criminal offences under the Competition Act may be entitled to full immunity from prosecution under the Bureau’s Immunity Program. Alternatively, where an applicant fails to meet all of the requirements of the Immunity Program (e.g., is not first in) may be entitled to leniency in sentencing under the Bureau’s Leniency Program.

The Bureau’s Immunity and Leniency Programs are its most effective tools for detecting Competition Act offences (e.g., price-fixing and other conspiracy agreements and bid-rigging). In one case alone (the ongoing auto parts investigation) the Bureau had already by the end of 2015 issued over 200 immunity and leniency markers to 21 cooperating parties.

Key Proposed Changes

Some of the more important proposed changes to the Bureau’s Immunity Program include requiring more information from applicants earlier in the process, the removal of automatic coverage for directors, officers and employees, the introduction of a fourth (Interim Grant of Immunity (IGI)) step and adding a detailed regime for assessing privilege claims made by applicants.

If the proposed changes are adopted by the Bureau, the Immunity Program would also combine the former Bulletin and FAQs into one document, update the Program to reflect a number of current Bureau policies (e.g., the requirement to apply for a criminal marker from the Deputy Commissioner of Competition, Cartels Directorate or Deputy Commissioner of Competition, Deceptive Marketing Practices Directorate, depending on the offence) and impose firmer requirements for key steps (e.g., a stiffer timeline to complete the proffer step).

Some of the other changes to the Immunity Program proposed by the Bureau include: (i) a number of housekeeping changes (e.g., revisions to officer titles and Bureau branches to reflect the current Bureau structure); (ii) clarifying key aspects of the Program (e.g., inserting definitions and explanations of key terms); (iii) an amplified proffer checklist; (iv) confirming the Bureau’s practice of preserving an immunity marker where an investigation does not proceed (i.e., in the event the Bureau re-commences an investigation); (v) how to modify a marker (e.g., in the event a marker needs to be expanded in terms of time or products/services covered); and (vi) statements of penalties for non-compliance (e.g., potential expulsion from the Program for disclosing participation to 3rd parties without Bureau consent or obstruction).

Implications

In general, the Bureau’s proposed changes to its Immunity Program would make it more complex and potentially more costly and time-consuming for applicants. Overall, the thrust of the new Program is to require significantly more information from corporate and individual applicants (including directors, officers and employees) earlier in the immunity application process.

A few of the more specific implications of the changes, if adopted, would include increased pressure on applicants to substantiate legal privilege claims and additional requirements on individual applicants (e.g., directors and officers) to show that they had knowledge of an offence and cooperate in an investigation in order to be granted immunity.

It also appears from the Bureau’s proposed changes that there may also be potentially greater risk for individuals that failed to comply with the requirements of the Immunity Program. In this respect, the revised draft Program has noticeably increased the emphasis of penalties for individuals that mislead or obstruct the Bureau during an investigation or destroy documents.

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    WELCOME TO THE CANADIAN COMPETITION & REGULATORY LAW BLOG

    I am a competition and advertising lawyer based in Toronto who blogs on competition and advertising law and interesting legal and policy developments relating to business, white-collar crime, corruption and Internet and new media law.

    I offer business, association, government and individual clients efficient and strategic advice in relation to competition/antitrust, advertising, regulatory and new media law. I also offer compliance, education and policy services.

    My more than 15 years experience includes advising clients on hundreds of domestic and cross-border competition, advertising and marketing, promotional contest/sweepstakes, conspiracy/cartel, abuse of dominance, compliance, refusal to deal and pricing and distribution matters.

    For more information about my services, see here.