Archive for the 'Conspiracy' Category
Canada’s contribution to the 11th OECD Global Forum on Competition, held last week in Paris, is now available online: Improving International Co-operation in Cartel Investigations – Global Forum on Competition – Contribution from Canada
Overview
The Global Forum on Competition included discussions on:
Commodities and price volatility:
“This full day session will start with an overview of recent price volatility; discuss its causes and present recent OECD work. Substantive discussions will draw on expert analysis and on the experiences of competition authorities. The day will culminate in a distillation of practical suggestions for competition authorities when faced with issues in these markets.”
Improving international co-operation in cartel investigations:
“This session will examine how the existing frameworks for international cooperation in cartel investigations could be modified or improved. The roundtable will also explore how international co-operation works in other fields, such as bribery, tax and money laundering, to see if any practices can be extrapolated to cartel enforcement.”
State-owned enterprises and competitive neutrality:
“This session will allow participants to hear the preliminary findings of the Report on Competitive Neutrality which is under preparation by the OECD as well as to present country experiences with competitive distortions resulting from an uneven playing field in markets where public undertakings co-exist with private competitors.”
Speeches included remarks by Pascal Lamy (WTO Director General), Otaviano Canuto (World Bank Vice-President), Angel Gurria (OECD Secretary-General) and Frederic Jenny (Chairman of the OECD Competition Committee).
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. have pleaded guilty to bid-rigging in Quebec Superior Court 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 Bureau announced in November 2008 that three construction companies, and certain of their executives, were charged with rigging bids submitted for the expansion and refitting of the emergency room at the Chicoutimi Hospital in 2003. The Bureau’s investigation found that the parties entered into an agreement to pre-determine the winner of the contract.
The parties have now pleaded guilty for rigging bids for the Chicoutimi Hospital contract.”
In an interesting story in the Montreal Gazette today, Douglas Quan reports that a Public Safety Canada study calls for “more independent oversight” to “combat bribery, extortion, collusive bidding and other illegal activities in Canada’s commercial construction industry”:
“’Every contractual link provides an opportunity for someone to pay a bribe in return for the award of the contract,’ the study said.
The corruption can take many forms. Contractors have been known to pay bribes in order to obtain a contract. Union officials have threatened work slowdowns unless contractors pay them money. Competing firms have entered into agreements where they share their bid prices with one another prior to bidding in order to pre-determine the winner and then the winning firm pays a kickback to the losing firm. Such corruption can lead to unsafe construction projects because they ‘fail to meet safety requirements as a result of fraud in building materials or the bribery of public inspectors,’ the study warned.”
The construction industry has long been the target of allegations and investigations by competition/antitrust regulators. For example, some of the construction related cases in Canada, many of which have also involved trade associations, have included building contractors, corrugated metal pipe manufacturers, electrical contractors, gypsum dealers and manufacturers, plumbing contractors, among many others.
The Wall Street Journal, Bloomberg, Globe and Mail and others have reported that the Competition Bureau (the “Bureau”) is investigating alleged price-fixing in the setting of interbank lending rates.
Interbank rates include the London interbank offered rate (“LIBOR”), Tokyo interbank offered rate (“TIBOR”) and euro interbank offered rate (“Euribor”).
The essence of the allegations in this ongoing and global case appears to be whether, if true, the fixing of interbank rates adversely affected the price of derivative and other financial products (such as credit default swaps, mortgages, etc.).
A question commonly posed to competition counsel, including me, when talking about the risks of meetings between competitors and information exchanges (for example in the trade association context) is whether it is illegal to merely talk about competitively sensitive information – for example, prices, costs, markets, customers, suppliers, strategic or business plans and so on.
In an interesting speech issued a little while back (Antitrust Issues Related to Benchmarking and Other Information Exchanges), Thomas Rosch, a Commissioner of the U.S. Federal Trade Commission, addresses a number of current and historical issues related to information exchanges and benchmarking. Given that many of the same issues can arise regardless of jurisdiction (though enforcement agencies in Europe tend to approach the issue more strictly), I thought I would post some of the highlights of his remarks.
Private Action Update: Lack of Injury to Competition Dooms Real Estate Multiple Listing Service Case
With all the recent activity in the real estate services sector in Canada, which has included cases brought by the Competition Bureau against The Canadian Real Estate Association (CREA), The Toronto Real Estate Board (TREB) as well as the ongoing Realtysellers private action challenge of CREA and TREB, the recent U.S. MLS case note by Stein, Mitchell & Muse LLP below caught my eye.
(For more about the Canadian real estate cases see: Hearing dates set in The Commissioner of Competition v. The Toronto Real Estate Board, Realtysellers lawsuit against CREA and TREB survives motion to dismiss, Competition Tribunal grants CREA leave to intervene in TREB abuse of dominance case, Competition Bureau amends its abuse of dominance case against The Toronto Real Estate Board).
The case, in which an internet-based real estate agent’s case against a multiple listing service, an association of real estate brokers and competing real estate agents was dismissed, involves interesting association and intellectual property law related issues.
The plaintiff’s case was ultimately unsuccessful based on a failure to adequately plead and show antitrust injury. The District Court for Minnesota held that, like Canada, where actual damage or loss is a prerequisite to commencing a private civil action under the Competition Act, that the law was clear that antitrust standing requires a showing of antitrust injury, which is injury of the type the antitrust laws are intended to prevent and which flow from that which makes the acts unlawful.
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).
Templates/precedents and checklists to run promotional contests in Canada
Templates/precedents and checklists to comply with Canadian anti-spam law (CASL)
