Archive for the 'Competition Bureau' Category
March 2012 will be Fraud Prevention Month. The Competition Bureau will be holding a series of three upcoming panel discussions on the topic of online and mobile mass marketing fraud, including an upcoming event at Concordia University:
“Canada’s Competition Bureau is holding a series of three panel discussions to address the issue of online and mobile mass marketing fraud. One of the discussions, organized in collaboration with Professor Mourad Debbabi, is scheduled for Tuesday, March 13 at Concordia.
Debbabi, Concordia University Research Chair in Information Systems Security, will also participate as a panellist during the discussion. “I’ll be talking about our research, which is related to fraud detection, prevention, and attribution,” he says. “For example, we conduct research on brand abuse (the false use of known brand names to attract visitors to websites), false associations, and detecting and geo-locating cybercrime servers.”
Deputy Commissioner of Competition for the Competition Bureau Lisa Campbell says the purpose of the discussions, also scheduled for March 6 in Ottawa and March 8 in Edmonton, is to promote discussion and raise public awareness about the issue of mass marketing fraud through the Internet and mobile devices.”
Marlene Koury of Constantine Cannon LLP has written an interesting comparative article on the extension by some international enforcement agencies of protections to whistleblowers, in addition to existing immunity or leniency program protections (see: Making It Easier to Whistle While You Work).
According to the author, while approximately 50 foreign jurisdictions now have leniency programs in place, and while the U.S. pioneered leniency as a cartel detection tool, the U.S. does not yet have whistleblower protections.
In this interesting article, the author describes the fact that, for example, while the Antitrust Division of the U.S. Department of Justice, like Canada’s Competition Bureau, relies on its Corporate Leniency Program to encourage self-reporting of cartel activity, it is limited in that it fails to offer people who are aware of, but not complicit in, cartel activity with any incentive to report:
“The question of whether U.S. antitrust enforcement should emulate foreign whistleblower rewards programs as part of a crackdown on cartels is analyzed in a recent article by a Constantine Cannon attorney: Making It Easier to Whistle While You Work.
Cartel detection and prosecution are top priorities for the Antitrust Division of the U.S. Department of Justice (“Antitrust Division”) – regardless of which political party occupies the White House. Given the often secretive nature of cartels, however, they can be hard to detect. The Antitrust Division relies on its Corporate Leniency Program to encourage self-reporting of cartel activity, by offering immunity and/or reduced sanctions.
As important as leniency programs are, however, they are limited. Given their narrow focus on those at the heart of the cartel, corporate leniency programs fail to offer people who are aware of, but not complicit in, cartel activity with any incentive to report illegal activity. This absence of an antitrust informant rewards program undoubtedly means that much cartel activity victimizing U.S. consumers goes unreported.
Over the past 10 years, four jurisdictions – South Korea, Pakistan, the United Kingdom and Hungary – have addressed the limitations of their corporate leniency programs by adding an antitrust informant, or whistleblower, rewards program. Each jurisdiction noted that the aim of adding a rewards program was to increase reporting from those who are either uninvolved in, or on the periphery, of a cartel.”
CANADIAN CASL (ANTI-SPAM LAW) PRECEDENTS
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In December 2010 Canada’s new anti-spam legislation was passed (the “Anti-spam Act”) which will, when it comes into force, be one of the strictest anti-spam regimes in the world (see: Anti-spam Act). In general, the Anti-spam Act will require express or implied consent for the sending of “commercial electronic messages” or “CEMs” and also impose form (i.e., disclosure) and unsubscribe requirements for CEMs.
We have been seeing an increase lately in penalties imposed in competition cases against individuals in Canada. A number of commentators have also recently noted this shift in enforcement by the Competition Bureau and some Canadian courts.
As a result of this trend, I thought I’d post a short note highlighting some of the recent statements by the Bureau, legislative developments and penalties imposed in one particularly noteworthy case – the ongoing Quebec gasoline price-fixing cartel case (the largest criminal investigation in the Bureau’s history).
For example, the Commissioner of Competition recently indicated that the Bureau had a stronger appetite to pursue penalties against individuals:
“In both cartel and bid–rigging cases, we will be appropriately aggressive when dealing with individuals. To date, 38 individuals have been charged in the Quebec Octane case, and last December, five individuals were accused of rigging bids for private sector contracts in residential highrise buildings in the Montreal area” (see: Keynote Speech at the Canadian Bar Association 2011 Fall Conference).
On February 17, 2012, the Competition Bureau announced that Construction G.T.R.L. (1990) Inc., Acoustique JCG Inc. and Enterprises de Construction OPC Inc. pleaded guilty to bid-rigging in Quebec Superior Court in a case relating to the expansion of the Chicoutimi Hospital in 2003 (see: Quebec Construction Companies Plead Guilty to Rigging Bids for the Chicoutimi Hospital).
In making the announcement, the Bureau said:
“The court ordered Construction G.T.R.L. to pay a fine of $50,000, and Acoustique JCG and Entreprises de Construction OPC to pay a fine of $25,000 each. The companies are subject to a court order for a period of 10 years.
‘Bid-rigging harms everyone but the criminals who cheat the system for their own financial gain,’ said Melanie Aitken, Commissioner of Competition. ‘In this case, the bid-rigging scheme ultimately harmed the Chicoutimi Hospital and Saguenay residents, by preventing the hospital from obtaining a competitive price for its renovation.’”
The construction industry has long been a target of competition/antitrust regulators. For example, some of the construction related cases in Canada, many of which have also involved trade associations and have gone back about a century, have included building contractors, corrugated metal pipe manufacturers, electrical contractors, gypsum dealers and manufacturers, plumbing contractors, road surfacing contractors, chain link fence contractors, among many others.
On January 6, 2012 the Competition Bureau announced its first cartel case under Canada’s amended Competition Act (partially brought under the new section 45 of the Competition Act).
In this case, two companies pleaded guilty of fixing the price of polyurethane foam and were fined a total of C $12.5 million (see: Cartels Update: Bureau Announces $12.5 Million Fine in First Price-fixing Case Under Amended Competition Act and Competition Bureau Sends Signal to Price-Fixers with $12.5 Million Fine).
In making the announcement, believed to be one of a number of new cartel cases currently being investigated, the Bureau said:
“’Yesterday’s guilty plea is the first conviction under Canada’s amended conspiracy law,’ said Melanie Aitken, Commissioner of Competition. ‘This investigation highlights the Bureau’s reinvigorated mandate to stop consumer harm caused by price-fixing, and to secure significant fines for these serious criminal offences.’
The charges are the first to arise from the Bureau’s investigation into price-fixing cartel in the polyurethane foam industry. Anyone with information relating to this investigation is encouraged to contact the Competition Bureau.
The Bureau’s investigation benefitted from cooperation under the Bureau’s Immunity and Leniency Programs, which create incentives for parties to address their criminal liability by cooperating with the Bureau in its ongoing investigation and prosecution of other alleged cartel participants.
Under the Competition Act, an agreement between competitors to fix prices, allocate markets or restrict output in Canada is a criminal offence. In March 2010, amendments to the conspiracy provision of the Act came into force.”
The Bureau also recently confirmed that it is investigating potential effects in Canada from the alleged global LIBOR-TIBOR bank cartel (see: Cartel Update: Competition Bureau Investigates Alleged Interbank Lending Rate Coordination), that it continues to receive guilty pleas in the Quebec gasoline price-fixing case, which was the largest such investigation in the Bureau’s history (see: Cartels Update: Seven More Individuals Plead Guilty in Criminal Quebec Gasoline Price-fixing Cartel) and that it remains focused on both maintaining and increasing its cooperation with global enforcement agencies in the detection and enforcement of cartels.
Last week, the Competition Bureau announced that Construction G.T.R.L. (1990) Inc., Acoustique JCG Inc. and Enterprises de Construction OPC Inc. pleaded guilty to bid-rigging in Quebec Superior Court in relation to the expansion of the Chicoutimi Hospital in 2003 (see: Quebec Construction Companies Plead Guilty to Rigging Bids for the Chicoutimi Hospital).
In making this announcement, the Bureau said:
“The court ordered Construction G.T.R.L. to pay a fine of $50,000, and Acoustique JCG and Entreprises de Construction OPC to pay a fine of $25,000 each. The companies are subject to a court order for a period of 10 years.
‘Bid-rigging harms everyone but the criminals who cheat the system for their own financial gain,’ said Melanie Aitken, Commissioner of Competition. ‘In this case, the bid-rigging scheme ultimately harmed the Chicoutimi Hospital and Saguenay residents, by preventing the hospital from obtaining a competitive price for its renovation.’”
The construction industry has long been a target of competition/antitrust regulators. For example, some of the construction related cases in Canada, many of which have also involved trade associations (and have gone back about a century), have included building contractors, corrugated metal pipe manufacturers, electrical contractors, gypsum dealers and manufacturers, plumbing contractors, among many others.
There have also been a number of recent bid-rigging cases in Canada, many of which have involved construction and construction supply related companies.
For example, see: Guilty Plea and $425,000 Fine for Bid-rigging in Montreal, Charges Laid in Residential Construction Bid-rigging Scheme in Montreal, Competition Bureau Exposes Sewer Services Cartel in Quebec, Competition Bureau Obtains Court Order Against the Saskatchewan Roofing Contractors Association.
The CBC reported last week that a Montreal-based telemarketing company, which has been accused of defrauding thousands of small businesses in relation to an alleged invoice scheme for never ordered office supplies, is still making calls (see: Montreal Telemarketers in Fraud Case Still Making Calls).
According to the CBC:
“Express Transaction Services Inc. (ETS) and some affiliated companies face several charges under the federal Competition Act and Criminal Code, following an investigation and police raids at its Montreal facilities in 2007.
In fall 2011, the company was charged with fraud and violation under the federal Competition Act.
Several individuals linked to the companies also face charges of deceptive telemarketing and misleading representations under the Competition Act, and criminal fraud charges.
The Competition Bureau said ETS purposely sent out products to businesses even if they were never ordered. ETS then had its call centre make repeated phone calls to retrieve payment.
According to the bureau, the scheme made more than $170 million between 2001 and 2007. The federal Anti-Fraud Centre said thousands of victims were affected.
CBC News has learned that ETS continues to operate out of its Montreal offices, and small businesses across Canada are still receiving phone calls from the company.”
TELEMARKETING LAWS IN CANADA
COMPETITION ACT
The federal Competition Act makes it criminal offences to engage in deceptive telemarketing or to engage in telemarketing unless certain disclosure under the Competition Act is made.
Templates/precedents and checklists to run promotional contests in Canada
Templates/precedents and checklists to comply with Canadian anti-spam law (CASL)
