On September 28, 2012, the Competition Bureau announced that Irving Oil and its Quebec manager have been charged (three charges against each of the corporation and manager) for allegedly fixing gasoline prices in certain local Quebec markets in the Bureau’s ongoing Quebec gas price-fixing investigation. In making the announcement, the Bureau said:
“’These charges highlight our continued and steadfast commitment to combating domestic price-fixing cartels,’ said John Pecman, Interim Commissioner of Competition. ‘Canadians are ultimately on the losing end of secret agreements that cheat them out of their money.’
By using a number of investigative tools, including wiretaps and searches, the Bureau found evidence that in certain local Quebec markets gas retailers, or their representatives, communicated with one another to agree on the price they would charge customers for gasoline.
Thirty-nine individuals and 15 companies have now been charged with criminal price-fixing in this case. To date, 27 individuals and seven companies have pleaded guilty with fines totalling over $3 million. Of the 27 individuals who have pleaded guilty, six have been sentenced to terms of imprisonment totaling 54 months.”
Under Canadian competition law, the federal Competition Act makes the following three categories of agreements between competitors (or potential competitors) per se illegal:
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 is broad enough to potentially include group boycotts).
According to Reuters reporting earlier today, Irving said it was not aware of the alleged price-fixing activities involving its personnel and took steps to stop the conduct:
“Our company was not aware of these activities and, when our company became aware of them, we took immediate steps to address the situation, including disciplinary action,” spokeswoman Carolyn Van der Veen said in an email. “Our company believes that we should not be held responsible for the actions of employees who knowingly violated company policy.”
The potential risk for individuals involved in criminal price-fixing and other activities under the Competition Act has also increased, given several key recent developments that include the elimination of conditional sentences (i.e., sentences served in the community) for price-fixing offences under the Act, an increased appetite by the Bureau to seek penalties against individuals and a recent decision by the Federal Court indicating that that Court will not necessarily automatically accept sentencing submissions carving out individuals in the context of pleas.
For a copy of the Bureau’s news release and backgrounder see: Irving Oil Charged in Gas Price-Fixing Cartel and Bureau Activities.
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