Archive for the 'Conspiracy' Category
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.
Earlier today, the U.S. Department of Justice (“DoJ”) announced in a press release that it had reached a settlement with three of the parties in its e-book price fixing investigation (Hachette Book Group (USA), HarperCollins Publishers L.L.C. and Simon & Schuster Inc.) and would continue its litigation against Apple Inc., Holtzbrinck Publishers LLC (operating as Macmillan) and Penguin Group (USA), filing a civil antitrust lawsuit in New York.
The DoJ alleges that Apple and the publishers in this case conspired to “end e-book retailers’ freedom to compete on price, take control of pricing from e-book retailers (such as Amazon and Barnes & Noble) and substantially increase the prices that consumers pay for e-books.”
In making the announcement, U.S. Attorney General Eric Holder said:
“As a result of this alleged conspiracy, we believe that consumers paid millions of dollars more for some of the most popular titles. … We allege that executives at the highest levels of these companies–concerned that e-book sellers had reduced prices–worked together to eliminate competition among stores selling e-books, ultimately increasing prices for consumers.”
According to the DoJ, it cooperated closely with the European Commission, as well as state authorities in Connecticut and Texas to “uncover the publishers’ illegal conspiracy”.
The core of the DoJ’s allegations is that Apple and the five publishers involved sought to eliminate price competition among retailers selling e-books by entering into agreements that eliminated price competition between competing booksellers. In particular, the DoJ alleges that the publishers introduced a new model, agreed upon by them, under which they took control of pricing authority from retailers and raised e-book prices (rather than, as previously, selling wholesale to retailers allowing them to set prices).
Also interesting are allegations by the DoJ that the parties periodically met in “private dining rooms of upscale Manhattan restaurants used to discuss confidential business and competitive matters” including Amazon’s e-book’s retailing policies.
The National Competition Law Section of the Canadian Bar Association is holding its 2012 Spring competition law conference in Toronto (the 2012 Competition Law Spring Forum: Best Practices in a Time of Active Enforcement) on May 2, 2012 at the Toronto Board of Trade.
From the CBA:
“Aided by the 2009/10 changes to the Competition Act, the Canadian Competition Bureau has adopted an aggressive enforcement agenda. There are more litigated cases in the Tribunal and the Courts than ever before, including the first prosecution under the new conspiracy provisions of the Act. Commissioner Melanie Aitken has made it clear that there are more to come. Our expert panelists will provide guidance on effectively protecting your clients’ interests at all stages – from preventative compliance programs to responding to criminal or civil enforcement actions. We are delighted to announce that Commissioner Melanie Aitken will be our keynote lunchtime speaker.”
This year’s Spring conference will include panels on compliance, responding to Competition Bureau investigations, misleading advertising, developments in merger review and recent competition law developments (including the TREB abuse case, the contested Air Canada / United merger, Bell Canada advertising case and recent bid-rigging cases).
Corporate Counsel recently published a rather interesting article by Catherine Dunn discussing the increase in the U.S. Department of Justice’s antitrust enforcement caseload and compliance efforts by U.S. companies (see: Antitrust Compliance is Becoming a Top Issue for U.S. Companies).
The article discusses, among other things, the fact that the DoJ’s antitrust pipeline is presently full (described as “white-hot”), cooperation between U.S. and international enforcement agencies, the complexities of cross-border investigations and a more flexible and “holistic” approach by companies to compliance, including competition/antitrust compliance.
Yesterday was a banner day for the European Commission, which imposed a total of €255 million against parties in the freight forwarders and window mountings cartels.
In the freight forwarders cartel, the Commission fined 14 international groups of companies a total of €169 million for participating in four cartels between 2002 and 2007 to fix the prices and other trading conditions for international freight forwarding services.
Interestingly, the parties in this case took rather elaborate and colourful steps to conceal the cartel, organizing their contacts in a so-called “Gardening Club” and using code-names based on vegetables (e.g., asparagus and baby courgettes) when the parties talked about fixing prices. The parties also set up a specific Yahoo e-mail account to facilitate the cartel and information exchanges between them.
In a curious story that caught my eye today, CTV reported that the City of Ottawa is threatening to terminate its contracts with companies found to have conspired to fix the price of gas in Ottawa and ban all future City purchases from them.
According to CTV, City of Ottawa Councilors Stephen Blais and Steve Desroches sent a letter to Canadian Tire, Mr. Gas and Pioneer in Ottawa, all of which pleaded guilty in Ontario Superior Court last week to fixing the price of gas in 2007 and were fined $2 million (see: Competition Bureau Announces $2 Million Fines in Ontario Gas Price-fixing Case).
This case is the second major gasoline price-fixing investigation that the Bureau has disclosed in the past several years (the Bureau is currently concluding the largest criminal investigation in its history in relation to gasoline price-fixing in Quebec – see: Further Individual Pleads Guilty in Quebec Gasoline Price-fixing Cartel).
Anti-corruption: Anti-Corruption Regulation 2012 (including Canada) – GCR (March 2012)
From GCR:
“Getting the Deal Through is delighted to publish the fully revised and updated sixth edition of Anti-Corruption Regulation, a volume in our series of annual reports, which provide international analysis in key areas of law and policy for corporate counsel, cross-border legal practitioners and business people.
Following the format adopted throughout the series, the same key questions are answered by leading practitioners in each of the 54 jurisdictions featured. New jurisdictions this year include Argentina, Croatia, Cyprus, Ireland and Turkey.”
For more information see:
Anti-Corruption Regulation 2012
Competition: Cartel Regulation 2012 (including Canada) – GCR (February 2012)
From GCR:
“Global Competition Review is delighted to publish the fully revised and updated twelfth edition of Cartel Regulation, a volume in the Getting the Deal Through series of annual special reports providing international analysis in key areas of law and policy for corporate counsel, cross-border legal practitioners and business people.
The globalisation of the world’s economy means that cartel investigations are increasingly likely to be faced simultaneously in multiple jurisdictions. In the format adopted throughout the series, the same key questions are answered by leading practitioners in 46 jurisdictions worldwide. New jurisdictions this year include Belgium, Ecuador, Hungary, Indonesia, Slovakia and Zambia.”
For more information see:
On March 20, 2012 the Competition Bureau announced that Canadian Tire Corporation, Pioneer Energy LP and Mr. Gas pleaded guilty in Ontario Superior Court in Brockville, Ontario to fixing the price of gasoline in 2007 at the pump and were fined $2 million.
In making the announcement, the Bureau said:
“’Consumers in Kingston and Brockville were denied a competitive price for gasoline as a result of this criminal price-fixing cartel,’ said Melanie Aitken, Commissioner of Competition. ‘The Bureau will not hesitate to take action when it uncovers evidence of illegal price-fixing.’
The pleas are as follows: Pioneer Energy LP pleaded guilty to price-fixing in Kingston and Brockville, and was fined $985,000; Canadian Tire Corporation pleaded guilty to price-fixing in Kingston and Brockville, and was fined $900,000; and Mr. Gas pleaded guilty to price-fixing in Brockville and was fined $150,000.
Today’s criminal charges and guilty pleas are the result of an extensive Bureau investigation that found evidence that gas retailers or their representatives in these local markets phoned each other and agreed on the price they would charge customers for gasoline. The Bureau’s investigation into potential price-fixing in the retail gasoline market continues in the Southeastern Ontario market.”
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 shown):
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 may include group boycotts).
Templates/precedents and checklists to run promotional contests in Canada
Templates/precedents and checklists to comply with Canadian anti-spam law (CASL)
