Archive for the 'Competition Bureau' Category
On May 4, 2012, the Competition Bureau announced that Maxzone Auto Parts (Canada) Corp. has pleaded guilty for participating in an international price-fixing cartel relating to the sale of aftermarket replacement automobile lights and was fined Cdn. $1.5 million.
In making the announcement the Bureau said:
“Following a Bureau investigation, Maxzone Canada admitted to implementing an agreement with competitors to set the price of aftermarket automotive replacement lights in Canada from January 2004 to September 2008. The products, mainly headlights and tail lights, were primarily purchased by auto parts supply companies in Canada for use as replacement parts.
Today’s charges are the first to arise from this investigation and anyone with information relating to this cartel investigation is encouraged to contact the Bureau.”
This case is part of an ongoing global auto parts cartel investigation. According to the Bureau, it is relying on its Immunity and Leniency Programs as part of its investigation.
Under the Bureau’s Immunity Program, companies or individuals implicated in criminal conduct under the Competition Act may offer to cooperate with the Bureau in its investigation and request immunity (i.e., full immunity from prosecution for criminal offences under the Act).
Under the Bureau’s Leniency Program, parties that have contravened criminal provisions of the Act that are not entitled to full immunity – for example, are not “first in” as immunity is a race – may nevertheless be eligible for leniency in sentencing.
At the Spring CBA Competition Conference earlier today in Toronto, the Commissioner of Competition, Melanie Aitken, delivered an interesting keynote luncheon speech that provided insight into the Competition Bureau’s recent experience under Canada’s amended Competition Act, current enforcement and future priorities.
Mergers
With respect to mergers, the Commissioner addressed recent efforts (including the 2009 Competition Act amendments) to align Canada’s merger control regime with those of other major jurisdictions, notably the U.S.
The Commissioner also addressed the Bureau’s increased monitoring of non-notifiable mergers, cited some recent merger review related statistics (including the fact that the Bureau has reduced the average time to review complex transactions from about 50 days pre-2009 to about 36 days currently and that the Bureau has triggered second phase reviews (“supplementary information requests” or “SIRs”) in 18 cases over the past three years).
The Commissioner also indicated that the ongoing BC waste case (an ongoing non-notifiable contested merger case) was uncommon, but at the same time made it clear that the Bureau would: (i) not hesitate to litigate appropriate merger cases and (ii) was interested in clarifying the law under the merger provisions of the Competition Act.
Perhaps the Commissioner’s most interesting merger related remarks were those relating to the possibility of collapsing the current standalone efficiencies defense into the general merger provisions of the Competition Act. In this regard, the Commissioner appeared to indicate that Canada’s standalone efficiencies defense was out of step with other major jurisdictions.
The National Competition Law Section of the Canadian Bar Association will be hosting a Marketing Practices Committee Roundtable with Competition Bureau officials in Toronto this Thursday.
Bureau representatives are to include Lisa Campbell (Deputy Commissioner of Fair Business Practices) and Brendan Ross (Major Case Director and Strategic Policy Advisor).
For more information see:
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On April 26, 2012, the U.S. Federal Trade Commission (FTC) announced that it negotiated a settlement of about $15.5 million with operators of an allegedly deceptive prize promotion scheme.
The International Competition Network’s (ICN) 2012 Annual Conference has wrapped up and the ICN has posted copies of the papers, chapters and other conference materials including in relation to the ICN’s Advocacy, Cartel, Mergers and Unilateral Working Groups.
Canada-related materials include a summary of the Canadian Competition Bureau’s information sharing mechanisms (see: Cartel Working Group – Charts Summarizing Information Sharing Mechanisms) and discussions of some of the Bureau’s criminal enforcement efforts (see: Cartel Working Group – Anti-Cartel Enforcement Manual).
On April 13, 2012, the Competition Bureau announced that Suncor Energy Products Inc. (Sunoco) pleaded guilty to fixing gasoline prices from May to November, 2007 in Belleville, Ontario and that the Ontario Superior Court sentenced it to pay a $500,000 fine (see: Suncor (Sunoco) Energy Pleads Guilty to Price-Fixing in Belleville, Ontario).
In making the announcement, the Commissioner of Competition said:
“We are committed to pursuing those who engage in anti-competitive behaviour that harms Canadian businesses and consumers … Illegal agreements between competitors to fix prices deny consumers the benefits of competitive prices and choice.”
Last month, Pioneer Energy LP, Canadian Tire Corporation and Mr. Gas also pleaded guilty to price-fixing during the same period (in Kingston and Brockville) and were fined $2 million (see: Competition Bureau Announces $2 Million in Ontario Gas Price-fixing Case).
Under section 45 of the Competition Act, three types of agreements between competitors are “per se” illegal (i.e., with no adverse competitive impacts required to be proven): (i) price-fixing agreements (agreements to fix, maintain, increase or control the price for the supply of a product or service), (ii) market allocation/division agreements (agreements to allocate sales, territories, customers or markets for the production or supply of a product), (iii) output/supply restriction agreements (agreements to fix, maintain, control, prevent, lessen or eliminate the production or supply of a product).
Other types of agreements between competitors are potentially subject to review under a second and separate non-criminal reviewable matters agreement provision (section 90.1).
According to the Bureau, it became aware of the price-fixing activities in this case using its Immunity and Leniency Programs (see: Backgrounder – Gasoline Companies Plead Guilty to Price-Fixing in Kingston and Brockville, Ontario). Under the Competition Bureau’s Immunity and Leniency Programs, applicants may receive full immunity from prosecution or reductions in penalties for cooperating with a Bureau investigation.
Under the Bureau’s Immunity Program, a party or company implicated in criminal conduct under the Act may offer to cooperate with the Bureau in its investigation and request immunity (i.e., full immunity from prosecution for criminal offences under the Act). Under the Bureau’s Leniency Program, parties that have contravened criminal provisions of the Act that are not entitled to full immunity (e.g., are not “first in”) may nevertheless be eligible for leniency in sentencing. Importantly, the Bureau’s Immunity Program is a “race” in that only the first eligible applicant is entitled to full immunity. As such, evaluating whether the Bureau’s Immunity and Leniency Programs are available is an important and time-sensitive step for parties to potentially reduce liability.
According to the Bureau, it also used wiretaps and search warrants in its investigation in this case, searching five corporate locations, nine residences and two residential offices, seizing thousands of paper and electronic records and interviewing witnesses (for more about the Bureau’s enforcement powers see: Bureau Enforcement).
On April 12, 2012, the Competition Bureau published a new Merger Review Performance Report. The Bureau’s new Report contains a summary of updated and newly issued merger-related guidelines, statistics relating to its review of mergers in the past two years (since its last merger performance report was issued in 2010) and discussions of recent initiatives and policy changes.
Some of the highlights of the Bureau’s new Report include:
Merger-review related policy objectives. The Bureau describes its new and updated merger guidelines as part of its “ongoing initiative to realign its processes, and to develop and revise its guidance documents to ensure the successful implementation of the 2009 amendments to the merger provisions of the Act and the Notifiable Transactions Regulations.” The Bureau’s new or recently updated merger-related guidelines include its Fees and Service Standards Policy for Mergers and Merger-Related Matters, Fees and Service Standards Handbook for Mergers and Merger-Related Matters, Procedures Guide for Notifiable Transactions and Advance Ruling Certificates under the Competition Act, several new Merger Interpretation Guidelines (including in relation to hostile transactions), updated Merger Enforcement Guidelines (which govern the Bureau’s substantive review of mergers), Merger Review Process Guidelines (which address the Bureau’s approach to Canada’s new two-stage merger review regime, include second phase reviews and the use of supplementary information requests (“SIRs”)).
New standard language for “no action” letters. The Bureau discusses its new standard language for “no action” letters to align its clearance language to section 123(2) of the Competition Act and “more accurately reflect the distinction between the discretionary issuance of an ARC and [a no action letter]”.
New merger remedies bulletin. The Bureau has announced, consistent with recent public remarks by the Commissioner, that it intends to update its 2007 Merger Remedies Bulletin “in the coming months” based on its August, 2011 Merger Remedies Study.
Merger position statements. The Bureau discusses its recent initiative to begin issuing position statements for certain merger reviews to “enhance its communication and transparency with stakeholders”. The Bureau also discusses some of the factors it will consider in deciding whether to issue a position statement, including the complexity and importance of issues, involvement of novel analytical tools and level of interest in the case.
Merger registry. The Bureau discusses its recently launched (in February of this year) merger register.
Merger review statistics. The Bureau’s Report includes merger review statistics, including a significant drop in reviews (a decrease of about 100 reviewed mergers between FY2007-2008 and FY2008-2009, the “biggest decline in a single fiscal year since the introduction of filing fees in 1997), the impact of filings following the increase in the size of transaction threshold in 2009 (from C $50 to $70 million at the time – the size-of-transaction threshold is currently C $77 million), a “steady influx of highly complex transactions raising serious competition concerns” (including the BHP/Potash, LSE/TMX, TMX/Maple Group and Google/Motorola transactions) and the issuance of 18 SIRs since the introduction of Canada’s two-stage merger review regime in 2009.
Review of non-notifiable mergers. The Bureau discusses its relatively recent initiative to increase its monitoring and review of non-notifiable transactions (in Canada, all mergers as defined under the Competition Act are potentially reviewable regardless of whether they require pre-merger notification). In this regard, the Bureau states that it “recently implemented a new initiative to actively monitor transactions in the Canadian marketplace”. According to the Bureau, this shift in its policy was largely driven by the reduced timeframe to challenge mergers post-closing as a result of the 2009 amendments (reduced to one year from the previous three). The Bureau states that its monitoring of non-notifiable deals includes “regular scanning of various media sources and mergers and acquisition databases, as well as the review of relevant marketplace complaints received by the Bureau.”
On April 13, 2012, the Competition Bureau announced that it had obtained six more guilty pleas in connection with its ongoing Quebec gasoline price-fixing investigation (five individuals and one company), with additional fines of $155,000. According to the Bureau, 27 individuals and 7 companies have pleaded guilty to date in this case with total fines of over $3 million.
This investigation is the largest criminal investigation in the Bureau’s history and has been active for about four years (charges were first laid in June 2008).
Under section 45 of the Competition Act, three types of agreements between competitors are “per se” illegal (i.e., with no adverse competitive impacts required to be proven): (i) price-fixing agreements (agreements to fix, maintain, increase or control the price for the supply of a product or service), (ii) market allocation/division agreements (agreements to allocate sales, territories, customers or markets for the production or supply of a product), (iii) output/supply restriction agreements (agreements to fix, maintain, control, prevent, lessen or eliminate the production or supply of a product).
Other types of agreements between competitors are potentially subject to review under a second and separate non-criminal reviewable matters agreement provision (section 90.1).
The Competition Bureau also has formal Immunity and Leniency Programs under which applicants may receive full immunity from prosecution (or reductions in penalties) for cooperating with an investigation, and which the Bureau increasingly relies on to detect cartels.
Under the Bureau’s Immunity Program, a party or company implicated in criminal conduct under the Act may offer to cooperate with the Bureau in its investigation and request immunity (i.e., full immunity from prosecution for criminal offences under the Act). Under the Bureau’s Leniency Program, parties that have contravened criminal provisions of the Act that are not entitled to full immunity (e.g., are not “first in”) may nevertheless be eligible for leniency in sentencing. Importantly, the Bureau’s Immunity Program is a “race” in that only the first eligible applicant is entitled to full immunity. As such, evaluating whether the Bureau’s Immunity and Leniency Programs are available is an important and time-sensitive step for parties to potentially reduce liability.
Templates/precedents and checklists to run promotional contests in Canada
Templates/precedents and checklists to comply with Canadian anti-spam law (CASL)
