In an interesting recent note, Jones Day has commented on a recent FTC administrative action against three of the largest U.S. suppliers of ductile iron pipe fittings (DIPF) alleging that they engaged in price-fixing and other anticompetitive behaviour. In connection with this case, the FTC has published a proposed consent order for public comment to resolve claims that one supplier, Star, violated section 5 of the Federal Trade Commission Act by engaging in price fixing.
The case is interesting in that the FTC’s complaint alleges that two of the suppliers, McWane and Sigma, invited the third, Star, to collude by communicating through a letter to common customers. The FTC also alleges that the suppliers utilized an industry trade association (the Ductile Iron Fittings Research Association) to exchange sales information to monitor and enforce the parties’ alleged agreement.
The FTC’s proposed consent order would prohibit Star from: (i) agreeing to fix, raise or stabilize DIPF prices (or allocate markets, customers or business opportunities for DIPF), (ii) soliciting any competitor to participate in such anti-competitive conduct or (iii) participate in any agreement between competitors to exchange competitively sensitive information (e.g., sales information).
In Canada, while there is no express provision in the Competition Act exclusively governing information exchanges, the principal risk of such exchanges between competitors is that they can lead to agreements (e.g., price-fixing agreements) that violate the criminal conspiracy provisions of the Competition Act (section 45). Such information can include prices, costs, customers, suppliers, markets, market shares and business and strategic plans.
Information exchanges can also be relevant in establishing the existence of an illegal agreement under section 45 (i.e., be used by the Bureau, a court or a private plaintiff to infer the existence of an agreement that violates section 45).
Christine Duhaime (Anti-money Laundering Law in Canada)
Canada is seeking the extradition of the alleged organizer of the migrant ship, the MV Sun Sea, that illegally transported 492 Sri Lankan foreign nationals from Thailand to Canada in August 2010. Thayakaran Markandu, who is also a Sri Lankan foreign national, was arrested in France and is being held in custody by French authorities. Earlier this month, the RCMP issued a warrant for his arrest on charges of human smuggling under the Immigration and Refugee Protection Act.
The charges may be amended to include money laundering with respect to the proceeds of the smuggling operation. Examples of money laundering that may occur in human smuggling operations include the use of funds paid to smugglers or traffickers, the use of funds paid to procure supplies or boats for smuggling or trafficking, or the use of funds from terrorists or terrorist organizations. Those aboard the MV Sun Sea claim they paid between $20,000 to $40,000 to be smuggled into Canada.
Difference between Human Smuggling & Human Trafficking
There may also emerge evidence of human trafficking in the MV Sun Sea smuggling operation. Several of the migrants have told Canadian authorities that they owe “debts” to those who arranged their voyage on the MV Sun Sea and will have to pay their “agents” substantial sums to clear the debts in Canada. This suggests they were trafficked and not smuggled.
On April 19, 2012, the U.K. Office of Fair Trading (OFT) announced its decision that British Airways (BA) and Virgin Atlantic Airways (VAA) engaged in anti-competitive practices relating to passenger fuel surcharges and fined BA £58.5 million. This case relates to coordination between the airlines on surcharge pricing for long-haul flights through the exchange of pricing and other competitively sensitive information.
In making the announcement, the OFT said:
“This decision brings an end to this investigation and sends out a strong message that coordinating pricing through the exchange of confidential information between competitors is unlawful. The size of the fine underlines that it is important for companies to take steps to ensure that they have an effective compliance culture. The fine would have been higher still but for the co-operation provided by BA throughout the OFT’s investigation. Without this, together with BA’s admission of the infringement, the case would have taken considerably longer to resolve.”
According to the OFT, VAA brought the matter to the OFT’s attention and was not fined under the OFT’s leniency policy.
In Canada, the Competition Bureau also has Immunity and Leniency Programs, which are both increasingly important tools for the Bureau for the detection of cartels and important options for parties participating in criminal conduct under the Competition Act to reduce liability.
The case is also interesting in highlighting the risk of information exchanges between competitors.
In Canada, while there is no express provision in the Competition Act exclusively governing information exchanges, the principal risk of such exchanges between competitors is that they can lead to agreements (e.g., price-fixing agreements) that violate the criminal conspiracy provisions of the Competition Act (under section 45).
Information exchanges can also be relevant in establishing the existence of an illegal agreement under section 45 (i.e., be used by the Bureau, a court or a private plaintiff to infer the existence of an agreement that contravenes section 45).
Following amendments to Canada’s Competition Act in 2009 and 2010, agreements to exchange competitively sensitive information may also raise issues under section 90.1 of the Act (the civil reviewable practice section for agreements among competitors) if their effect is to prevent or lessen competition substantially.
In an interesting story earlier today, Bloomberg reported that Public Safety Canada has warned Industry Canada that loosening investment restrictions in Canadian telecommunications providers would pose a “considerable risk” to Canadian national security.
In particular Bloomberg has reported that Public Safety Canada told Industry Canada that the “security and intelligence community is of the view that lessening or removing restrictions from the Telecommunications Act, without implementing mitigation measures, would pose a considerable risk to public safety and national security.” Bloomberg also reports that Public Safety Canada is working with Industry Canada to “ensure that any risks to Canada’s telecommunications sector are identified and addressed”.
Last month Industry Minister Christian Paradis announced that the Telecommunications Act would be amended to lift foreign investment restrictions for telecom companies with less than a 10% market share and that the Government would be imposing caps in upcoming spectrum auctions in 2013 to “guarantee that both new wireless competitors and incumbent carriers have access to the spectrum up for auction”. The Government also introduced several other measures, including the improvement and extension of tower sharing and roaming policies and imposing obligations on 700 MHz spectrum licence holders for the timely delivery of advanced wireless services to rural Canadians.
Foreign investors are presently subject to Canada’s national security review regime (in addition to general Investment Canada Act review or notification), under which the Minister and federal Cabinet can review proposed or completed investments that may be “injurious to national security” (a purely political and undefined test).
Under Canada’s (relatively new) national security review regime, the Government may conduct a national security review of an investment regardless of whether it triggers the general thresholds for review under the Investment Canada Act or whether control of a Canadian business is acquired.
Global Competition Review has published its 2012 edition of Vertical Agreements with a global survey of the regulation of vertical agreements including in Canada.
From GCR:
“Global Competition Review is delighted to publish the sixth edition of Vertical Agreements, 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.
Following the format adopted throughout the series, the same key questions are answered by leading practitioners in each of the 37 jurisdictions featured.”
On April 16, 2012, the Ministry of Justice announced that it was introducing new legislation that will, if passed, standardize the time limits for filing lawsuits in British Columbia.
In making the announcement the Ministry said:
“Bill 34, the proposed new Limitation Act covers breach of contract, wrongful dismissal, personal injury, defamation and other civil actions. It sets a single, two-year limitation period for most civil claims and reduces the maximum time limit for filing a claim to 15 years from the date the act in question occurred. The proposed reforms balance the rights of both plaintiffs and defendants, yet ensure important aspects of the current law remain unchanged.
These changes are the result of significant consultation with the public, consumer groups and business, legal and local government representatives, and they will make B.C.’s law consistent with reforms in Alberta, Saskatchewan, Ontario and New Brunswick.
Limitation periods can affect the justice system and its efficiency, the cost and availability of insurance products for all British Columbians, and how financial arrangements are structured. They can also determine how long individuals and businesses must keep records that might be required to support a legal action.”
The new legislative reforms introduced by the Government yesterday were first proposed in a 2010 white paper and based on public consultations.
Bill C-34, if passed, will involve a move away from a variety of basic limitation periods (currently based on the type of cause of action) to a single two-year limitation period for most civil claims, with exceptions for the enforcement of monetary judgments and statutes with specific limitation periods – for example, the Competition Act.
The new legislation would also mean that the maximum time limit for filing a claim would be reduced to 15 years from 30 years. Under the new legislation, the ultimate limitation period would also be suspended until a claim was discovered (if a defendant willfully concealed facts about an injury, loss, damage or that they were responsible for the act or omission or where a defendant willfully misled a plaintiff about whether civil proceedings would provide an appropriate remedy).
The Institute of European and International Business Law from the University of St. Gallen in Switzerland will be hosting the nineteenth St. Gallen International Competition Law Forum ICF on June 7 and 8, 2012.
From the Institute of European and International Business Law:
“The Institute of European and International Business Law from the University of St. Gallen, Switzerland is pleased to invite you to the nineteenth St. Gallen Inernational Competition Law Forum ICF on June 7 and 8 2012. Once again, leading experts in national, European and international competition law will come together to discuss their ideas on the latest trends and developments in the field and their practical implications.
The St. Gallen International Competition Law Forum ICF prides itself on being one of the most established events of its kind in Europe. It attracts influential policy shapers, this year, for example, Joaquin Almunia (European Commissioner of Competition), Andreas Mundt (President of the German Competition Authority) and William Kovacic (Former Commissioner of the U.S. Federal Trade Commission) as well as internationally renowned academic experts and leading business practitioners.
You will find all information on the conference in the programme flyer (see: Programme) and under www.sg-icf.ch. As places are limited, we encourage early registration!
If you have further questions, please do not hesitate to contact the Institute of European and International Business Law (europarecht@unisg.ch).
We very much look forward to seeing you this summer in St. Gallen!”
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The International Law Section of the American Bar Association will be holding its 2012 Spring Meeting on April 17-21, 2012 in New York.
Sessions will include: The Framework of International Legal Practice, Drafting International Contracts, Cross-Border Litigation and Dispute Resolution, Competition & Antitrust Issues in International Transactions, Fighting Online Piracy – New Perspectives on ISP Liability Under EU, U.S. & U.K. Copyright Law, Damages in International Contracts, Selling Consumer Products into the U.S. and Canada, the Globalization of Anti-Corruption Laws, the Evolution of International Criminal Law and Price Signaling and Hub-and-Spoke Communication: How to Avoid the Cutting Edge of Antitrust Liability.
For the conference program see:
Templates/precedents and checklists to run promotional contests in Canada
Templates/precedents and checklists to comply with Canadian anti-spam law (CASL)
