OVERVIEW OF THE COMPETITION BUREAU’S
IMMUNITY AND LENIENCY PROGRAMS
The federal Competition Bureau (Bureau) has established Immunity and Leniency Programs that can be very important for individuals, companies and other organizations that that have committed a criminal offence under the Competition Act and want to avoid or minimize liability.
An individual, company or other organization may be entitled to full immunity from prosecution under the Bureau’s Immunity Program or, where unavailable, leniency in sentencing under its Leniency Program for reporting a Competition Act offence to the Bureau and cooperating with the Bureau in an investigation.
The Bureau’s two programs, which were significantly amended in 2018, are the Bureau’s most effective tools for detecting and enforcing criminal competition law offences committed under the Competition Act. They also offer parties to criminal competition law offences very important potential safe harbors from liability.
Neither Program, however, protects companies or individuals from potential Competition Actcivil actions commenced by private plaintiffs (i.e., civil damages actions for competition law violations). The risk of a potential civil action is, therefore, an important factor for applicants when assessing whether to seek immunity or leniency.
REQUIREMENTS FOR THE COMPETITION BUREAU’S
IMMUNITY AND LENIENCY PROGRAMS
The Bureau’s Immunity Program is available in relation to criminal offences under Part VI of the Competition Act, including sections 45 (conspiracy), section 46 (foreign directed conspiracies), section 47 (bid-rigging), the criminal false or misleading representations and deceptive marketing practices provisions of the Act (sections 52 to 55.1) and aiding or abetting these offences, which are also offences under the Criminal Code.
The Bureau’s Leniency Program is narrower. It is only available in relation to cartel offences under sections 45 to 49 of the Competition Act, including conspiracy (section 45) and bid-rigging (section 47) or based on liability that arises from sections 21, 22 or 22.2 of the Criminal Code (aiding, abetting or counselling an offence).
Both of the Bureau’s programs require that multiple steps be completed by applicants. Under the Immunity Program, there are four steps: (i) marker; (ii) proffer; (iii) grant of interim immunity; and (iv) final grant of immunity. Under the Leniency Program, there are seven steps: (i) marker; (ii) proffer; (iii) leniency recommendation; (iv) plea agreement; (v) full disclosure; (vi) court proceedings; and (vii) ongoing cooperation with an investigation.
In general, full immunity from prosecution of a Competition Act criminal offence will only be granted to a party where either: (i) the Bureau is unaware of an offence and the applicant is the first to disclose all elements of the offence; or (ii) the Bureau is aware of the offence and the applicant is the first to come forward before the Bureau has obtained enough evidence to refer the matter to the Director of Public Prosecutions (DPP).
Immunity applicants must also terminate participation in the illegal activity, not have coerced others to be a party to the particular offence and provide complete, timely and ongoing co-operation during an investigation.
In general, the Commissioner of Competition, who is the head of the Competition Bureau, will recommend to the DPP that leniency be granted to a party only where the applicant meets all of the following: (i) terminated participation in the cartel, (ii) agrees to cooperate fully and in a timely manner at their own expense with the Bureau’s investigation and any subsequent prosecution of the other cartel participants by the DPP, (iii) demonstrates that it was a party to the offence and (iv) it agrees to plead guilty.
Full immunity, however, is only available to the first applicant that successfully meets all of the requirements of the Bureau’s Immunity Program.
Under the Bureau’s Leniency Program, applicants must plead guilty to an offence under the Competition Act, incur a penal sentence and are only eligible to receive reductions in fines of up to 50% based on their cooperation.
As such, there is a strong incentive to seek immunity as quickly as possible when a potential Competition Act offence is discovered and, where unavailable, to apply for leniency and cooperate as fully as possible with the Bureau to secure the largest possible reduction in fine.
COMPETITION ACT ENFORCEMENT RESOURCES
For more information about Canadian competition law investigations, enforcement and remedies, see: Advisory Opinions, Competition Act Complaints, Competition Act Litigation, Competition Law Enforcement, Market Studies/Inquiries and Whistleblowers.
For more information about the Bureau’s Immunity and Leniency Programs, see: Competition Bureau, Immunity and Leniency Programs Under the Competition Act.
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SERVICES AND CONTACT
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Our experience includes advising clients in Toronto, across Canada and the United States on the application of Canadian competition and regulatory laws and we have worked 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 our competition and advertising law services see: competition law services.
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