The American Bar Association Section of Antitrust Law has recently published the most recent edition of its Antitrust Law Journal (see: Antitrust Law Journal (Volume 77, Issue 3)).
The current issue includes articles on antitrust and innovation (Herbert Hovenkamp, B. Zorina Khan, Tom Nicholas), patent tying, price discrimination and innovation (Christopher R. Leslie), licensing negotiations in standard-setting organizations (Richard J. Gilbert), patent holdup (George S. Cary, Mark W. Nelson, Steven J. Kaiser and Alex R. Sistla) and several antitrust and IP articles.
CANADIAN CASL (ANTI-SPAM LAW) PRECEDENTS
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We offer Canadian anti-spam law (CASL) precedents and checklists to help electronic marketers comply with CASL. These include checklists and precedents for express consent requests (including on behalf of third parties), sender identification information, unsubscribe mechanisms, business related exemptions and types of implied consent and documenting consent and scrubbing distribution lists. We also offer a CASL corporate compliance program. For more information or to order, see: Anti-Spam (CASL) Precedents/Forms. If you would like to discuss CASL legal advice or for other advertising or marketing in Canada, including contests/sweepstakes, contact us: contact.
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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.
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”
From the Canadian Bar Association:
“Authorities have recently noted their first conviction under Canada’s amended conspiracy law, commenting: “[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.”
In-house counsel practising competition law are often asked to evaluate the competition law risks associated with activities such as joint selling initiatives, joint ventures, buying groups, participation in trade associations, and merger transactions. As such, in-house counsel are an organization’s first line of defence to identify potential illegal arrangements to fix prices, allocate markets or restrict output, that create risks of criminal investigation and prosecution; and that can result in significant fines, imprisonment, damage to an organization’s reputation, and civil damage claims.
The line between criminal conspiracies and pro-competitive strategic alliances among competitors, however, can at times be difficult to detect. It is critical that in-house counsel have the tools necessary to distinguish benign or pro-competitive activity from potentially criminal conduct.”
– By Christine Duhaime (Duhaime Law)
Our colleague Christine Duhaime has written this rather good comparative competition and terrorist financing note.
A Tale of Two Crimes and Their Punishment
This is a tale of two crimes and two punishment: the first, a conviction for price-fixing under §45(1) of the Competition Act in Québec in which the guilty party was sentenced to a term of 12 months imprisonment; the second, a conviction for terrorist financing under §83.03(b) of the Criminal Code in British Columbia in which the guilty party was sentenced to a term of six months imprisonment. Both were sentenced pursuant to the sentencing principles set out in §718 of the Criminal Code.
Québec Gasoline Price-Fixing Case
In 2008, the Competition Bureau uncovered a gasoline price-fixing cartel operating in several towns in Québec. According to the evidence, competitors in Magog, Sherbrooke and Thetford Mines telephoned each other regularly and agreed to set the price of gasoline at their gas stations and agreed on the timing of gas price increases. Criminal charges were laid against individuals and gas retail companies, including Irving, Shell, Olco and Esso, pursuant to §45(1)(c) of the Competition Act.
§45(1)(c) of the former Competition Act made it a criminal offence for, among other things, two persons to fix the price of a product if competition was prevented or lessened “unduly”. On conviction, the former conspiracy offence carried a maximum term of imprisonment of up to 5 years imprisonment and a fine of up to $10 million (subsequently increased to 14 years and $25 million). Stopping such cartel-type behaviour remains an enforcement priority for the Competition Bureau.
Several of the gas companies involved and individuals pleaded guilty to the charges; others are contesting the charges and their cases are before the courts in Québec. The Québec Superior Court, hearing most of the cases, noted recently in the price-fixing cases, that the courts “must severely punish those violating the Competition Act and in so doing, send a clear and dissuasive message to those tempted to impede competition…[the punishment cannot be] just a rap on the knuckles” (see: R. c. Darby, 2012 QCCS 26). Pierre Bourassa, a sales representative with Les Pétroles Global Inc. that operated under the Olco banner, pleaded guilty to price-fixing of gas prices in Sherbooke and Magog. He had no prior criminal record and was considered not to be a danger to society. He was sentenced to 12 months in prison by the Québec Superior Court.
British Columbia Terrorist Financing Case
In Canada, suppressing terrorism is an “uphill battle” (see: Commission of Inquiry Into the Investigation of the Bombing of Air India Flight 182), and a battle which Canada stands poised to lose unless more is done to detect, deter and prosecute terrorist financing.
The Antitrust Law Section of the American Bar Association recently announced the publication of Antitrust Law Developments (Seventh). Antitrust Law Developments is the seminal general U.S. text on antitrust law, a landmark of scholarship and reflects the collective efforts of many leading antitrust law practitioners and scholars.
From the American Bar Association:
“Antitrust Law Developments (Seventh) is the seminal comprehensive review of federal antitrust law, with reports on current case law and administrative and legislative developments current through 2011.
This 2-volume set updates you on key decisions in the courts, and developments at the enforcement agencies, keeping you current in every area of antitrust practice. Each edition of Antitrust Law Developments is designed to improve upon, as well as update, prior editions, and to ensure consistency with everchanging developments in this dynamic area of law.
This new seventh edition addresses important developments, including the Supreme Court’s decisions in Twombly, Leegin, American Needle, linkLine, and Weyerhaeuser and their treatment in the lower courts. Developments in the courts of appeals relating to bundled discounts and the antitrust-intellectual property interface all receive comprehensive treatment. The chapter on mergers and acquisitions has been substantially revised to reflect the new DOJ/FTC Horizontal Merger Guidelines and new foreign merger control regimes, and the discussion of the misuse doctrine in the chapter on intellectual property has been reorganized and revised.
Antitrust Law Developments (Seventh) is the product of an enormous team effort of Antitrust Section members and is a “must have” for every antitrust practitioner.
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.
Theodore Banks (from the firm Schoeman Updike Kaufman & Scharf) has published an interesting new article on competition/antitrust compliance entitled “Antitrust Compliance – It’s All About the Culture”.
Summary:
“What does it take to develop an antitrust compliance program that works? There are a lot of pieces. The employees must be presented with materials that are directly relevant to each of their jobs. It must be done in a way that is easily understandable. It must be ubiquitous, so that little or no effort is needed to gain access to information. There should also be business controls so that violations are not easy to accomplish-or difficult to detect.
We’ve known these things for a long time. In antitrust, which in many ways is the grandfather (or perhaps the godfather) of corporate compliance programs, we’ve had detailed policies, handbooks, training courses, videos, slides. No shortage of information-yet the violations continue. The Justice Department seems to have given up on compliance when it comes to antitrust. Their main method to control cartel behavior is not to encourage prevention (i.e., compliance), but to encourage confession (i.e., the amnesty program). In fact, they are apparently so disgusted with the sorry state of compliance that they got a carve-out from the Federal Sentencing Guidelines when it comes to antitrust. If convicted of a violation of any other federal criminal law, the company can get credit for good intentions if its compliance program met the definition of an “effective” program. But not true for antitrust.”
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