Archive for the 'Private Actions' Category
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 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.
On February 7, 2012, the Alberta Court of Queen’s Bench issued an important decision on the award of costs in private competition law civil actions under section 36 of the Competition Act. This case is the first reported decision regarding a party’s right to claim costs under section 36 of the Competition Act (see: 321665 Alberta Ltd. v. ExxonMobil Canada Ltd.).
In 321665 Alberta Ltd. v. ExxonMobil Canada Ltd., 2012 ABQB 76 (Alta. Q.B.), the Alberta Court of Queen’s Bench interpreted the plaintiff’s right in a successful upstream cartel case to recover costs in the action under section 36 of the Competition Act.
Section 36 of the Competition Act is the operative provision for commencing competition law private actions in Canada, which provides that private plaintiffs may sue for, among other things, violations of the criminal provisions of the Act (e.g., conspiracy agreements, bid-rigging, criminal misleading advertising) and recover actual loss or damage suffered, “together with any additional amount that the court may allow not exceeding the full cost to him of any investigation in connection with the matter and of proceedings under [section 36]”.
To date, however, it has not been clear what the scope of a plaintiff’s right was to recover the costs of bringing a private action under section 36.
A tentative hearing date of June 5, 2012 has been set in the Pro-Sys and Sun-Rype indirect purchaser price-fixing class action cases before the Supreme Court of Canada (see: Supreme Court of Canada – scheduled hearings, Pro-Sys Consultants Ltd. – docket, Sun-Rype Products Ltd. – docket).
The CBC and others have reported on the continued progress of Bill C-10, the “Safe Streets and Communities Act”, which is now undergoing 11 days of Senate committee hearings (the Senate’s legal and constitutional affairs committee) that will hear from about 100 witnesses.
Conservative Justice and Public Safety Ministers Rob Nicholson and Vic Toews are asking Senators to “expeditiously” approve the Bill.
Bill C-10, which completed second reading in the Senate in December, would, among other things, eliminate conditional sentences of two years or less (i.e., sentences served in the community rather than a correctional facility) from being ordered by courts for violation of two of the core criminal offences under the Competition Act: criminal conspiracy agreements (section 45) and bid-rigging agreements (section 47).
FEBRUARY 29, 2012 – Teleconference
The National Competition Law Section of the Canadian Bar Association will be holding a teleconference on February 29, 2012 entitled: “Criminal Conspiracy or Legitimate Competitor Collaboration? Tips for In-House Counsel”
A claim against two major real estate boards and their executives for breaching terms of an earlier settlement agreement, common law and Competition Act conspiracy and certain economic torts survived a motion to dismiss last week. The reasons for judgment provide insight into the sufficiency of pleadings in cases involving allegations of anti-competitive conspiracies against businesses and their executives.
Last Friday, Mr. Justice Kenneth L. Campbell of the Ontario Superior Court of Justice dismissed a motion by the defendants in Dale v. The Toronto Real Estate Board to dismiss Realtysellers (Ontario) Limited’s (“Realtysellers”) action against The Canadian Real Estate Board (“CREA”), The Toronto Real Estate Board (“TREB”) and 47 other defendants (for a copy of the decision see: Dale v. The Toronto Real Estate Board).
Gibson Dunn has published a very fine and detailed summary of U.S. and global criminal antitrust developments in 2011 (2011 Year-End Criminal Antitrust Update).
From Gibson Dunn:
“The Department of Justice obtained more than $1 billion in FY 2011 from criminal antitrust offenders, the second-highest amount in its history. The total payments consist of an estimated $523 million in criminal fines and more than $500 million in restitution, penalties, and disgorgement paid to state and federal agencies. This staggering amount represents an increase of more than 78% from FY 2010 and sends a clear message to the corporate world that DOJ’s zealous pursuit of large fines for collusive conduct continues unabated.
Another important measure of success for the Department of Justice, Antitrust Division also significantly advanced in FY 2011; the number of criminal cases filed increased 50% to 90 cases, which included 27 corporations and 82 individuals–each category significantly higher than in FY 2010.
Despite these achievements for the Antitrust Division, other metrics revealed significant year-over-year declines in FY 2011. Most notably, several statistics relating to incarceration of antitrust defendants reached multi-year lows: the number of individuals sentenced to prison decreased 28% to just 21 defendants, the length of the average prison sentence fell 44% to 17 months, and the total prison time imposed on defendants dropped 60% to 10,544 days. …
Given the Antitrust Division’s numerous ongoing investigations–a number of which involve large, complex, international cartel matters that have not yet been announced publicly–we expect 2012 to be another banner year in criminal antitrust enforcement. …”
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