March 10, 2013
Readers of this blog will know that two of my main interests are competition/antitrust compliance and cartels. Despite the continually escalating fines and persuasive reasons cartels should be aggressively punished, they seem to chug on in the corporate world unabated. Perhaps it’s the game theory of cartels that I find fascinating. At any rate, in this vein this new paper on cartels and compliance caught my eye by D. Daniel Sokol: “Policing the Firm” (see: here). Abstract:
“Criminal price fixing cartels are a serious problem for consumers. Cartels are hard to both find and punish. Research into other kinds of corporate wrongdoing suggests that enforcers should pay increased attention to incentives within the firm to deter wrongdoing. Thus far, antitrust scholarship and policy have ignored this insight. This article suggests how to improve antitrust enforcement by focusing its efforts on changing the incentives of internal firm compliance.”
March 9, 2013
In a very interesting case released on March 1st (R. v. J.F., 2013 SCC 12), the Supreme Court of Canada settled a debate between previously rival authorities for establishing party liability in criminal conspiracy cases.
While this case involved rather grisly criminal conspiracy-related facts, involving allegations of a conspiracy to commit murder (an agreement between youths to ply their mother with alcohol and drugs, drown her in the bathtub and make it appear an accident), it has potential implications for other types of conspiracy agreements including conspiracy and bid-rigging agreements under the federal Competition Act (sections 45 and 47).
The issues in this case were: (i) whether a person can be found liable as a party to an offence of conspiracy under section 21 of the Criminal Code (which includes liability to an offence for aiding or abetting the offence, in addition to actually committing it); and (ii) if so, under what circumstances, with the Court referring to the latter, quite rightly given the uncertainty of the law to date, as “the more perplexing issue” and “centerpiece of the appeal”.
The aiding and abetting provisions of the Criminal Code also apply to competition law offences in Canada – for example, in a 1966 Supreme Court case – R. v. Campbell – it was held that while the former Combines Investigation Act did not refer to aiding or abetting, it did not exclude the application of section 21 of the Criminal Code.
A number of recent Canadian cartel cases have also involved allegations or admissions of liability based on aiding and abetting conduct. These include a case involving Mitsubishi Corporation in 2005 (in which Mitsubishi was fined for aiding and abetting the implementation of a foreign-directed conspiracy in Canada); a case in 2005 involving Nippon Carbon Ltd. (which pleaded guilty and was fined $100,000 for aiding and abetting an international conspiracy to fix the price of graphite electrodes used in steel production); and a case involving Ibiden Co. Ltd. (which was fined for aiding and abetting a conspiracy to fix the price of isostatic graphite’s, a fine grain carbon product).
In answering the questions set out above, and in a concurring decision, the Court reviewed two conflicting lines of authorities that had been adopted by courts in different provinces with divergent approaches to party liability for conspiracy cases.
One broad approach, referred to the “McNamara model”, after the decision in R. v. McNamara (No. 1) (1981), 56 C.C.C. (2d) 193 (Ont. C.A.), extended party liability in conspiracy cases where an accused aided or abetted the furtherance of a criminal conspiracy’s unlawful object (a broad basis, which would potentially lead to liability in more instances).
Another and narrower approach referred to as the “Trieu model”, after the decision in R. v. Trieu, 2008 ABCA 143, limited party liability in conspiracy cases to situations where an accused aided or abetted the formation of a conspiracy agreement (thus a narrower basis of liability, and one more clearly linked to the elements of the offence of conspiracy – i.e., an agreement).
On the more orthodox point (being a party to an offence of conspiracy), the Court held that being a party to a conspiracy is an offence known to law.
On the less clear and more challenging and interesting question, namely the required linkage of an accused to a conspiracy agreement (framed by the Court as: “how and under what circumstances a person [can] be found liable as a party to the offence of conspiracy”), the Court held that the correct approach was based on the narrower Trieu model. In other words, party liability in conspiracy cases is to be limited to cases where an accused aids or abets the initial formation of an agreement or, alternatively, aids or abets a new member to join a pre-existing agreement.
The Court’s primary rationale for adopting this narrower approach related to the nature of conspiracy offences – i.e., the central actus reus (i.e., act element) of a conspiracy is the conspirators’ act of agreeing. In this regard, the Court held:
“The Trieu model is a legitimate basis for party liability to a conspiracy. A person becomes party to an offence if he aids or abets a principal in the commission of the offence. It follows that party liability to a conspiracy is made out where the accused aids or abets the actus reus of conspiracy, namely the conspirators’ act of agreeing.”
The Court also confirmed more than a century of Canadian jurisprudence that the “essence of the crime of conspiracy” (whether under the Criminal Code or Competition Act offences) is an agreement and, therefore, that liability should be founded on either committing the offence or aiding or abetting the offence (i.e., an illegal agreement).
The Court reasoned that, since acts that further the unlawful object of a conspiracy are not elements of the offence of conspiracy, aiding or abetting such acts should not expose a criminal accused to liability.
Having said that, the Court did also hold that where a person, with knowledge of a conspiracy, does or omits to do something for the purpose of furthering the mere (or perhaps more accurately, more mere) unlawful object, with the knowledge and consent of one or more of the existing conspirators, this may “provide powerful circumstantial evidence from which membership in the conspiracy can be inferred.”
In other words, where there is evidence of an accused supporting a conspiracy’s object, but not the agreement itself, this may be, depending on the facts, a sufficient ground on which to base criminal liability. This is a logical conclusion and extension of the Court’s holding and consistent as well with Canadian conspiracy authorities generally that an agreement may be established based on mere circumstantial evidence (although still with the necessity to be proven on the criminal burden of proof – i.e., beyond a reasonable doubt).
On the particular facts of this case, while the Court found that party liability should not have been put to the jury (given that there was no evidence that the accused aided or abetted the initial formation of the agreement or aided or encouraged a new member to join the conspiracy), the Court nevertheless found that the trial judge’s error could not have affected the verdict given that the evidence implicating the accused as a member of the conspiracy was “overwhelming”.
This interesting decision is important for several reasons, including for clarifying (and potentially narrowing) the circumstances in which criminal accused under the Competition Act may face liability for agreement related offences (including conspiracy, foreign directed conspiracies and bid-rigging).
The decision also gives persons that are being challenged by the Competition Bureau a clearer indication of when, and under what circumstances, allegations of aiding or abetting a criminal offence may be established, given that it is not uncommon for the Bureau to rely on aiding or abetting theories of liability in criminal cartel cases in Canada in addition to theories that an accused actually committed the offence.
For example, in the Bureau’s Competitor Collaboration Guidelines, the Bureau states that it may seek criminal conspiracy (cartel) liability under section 45 of the Competition Act based on aiding or abetting theories, including for trade association conduct:
“Where an agreement involves competing and non-competing parties, the fact that some parties are not competitors does not insulate the non-competing parties from prosecution under section 45. [criminal conspiracy agreements] Parties that are not competitors may also be prosecuted under section 45 through the aiding and abetting provisions in section 21 or the counseling provisions in section 22 of the Criminal Code … Agreements between members of a trade or other industry association may also constitute agreements between competitors for the purpose of section 45. … In the event that such an agreement contravenes section 45, the trade association may be considered as a principal party to the offence or may be subject to prosecution through the aiding and abetting provisions in section 21 of the Code.”
For a copy of the decision see: R. v. J.F., 2013 SCC 12.
March 8, 2013
Earlier today, the Competition Bureau launched a Twitter account: @CompBureau. 1 Tweet so far (“The Competition Bureau is now on Twitter”), following 1 other (the French version of its account: @Burconcurrence) and with 77 followers and rising quickly. For the Bureau’s announcement of its first steps into the Twitterverse see: Competition Bureau Launches Twitter Account.
March 7, 2013
The old adage is that “the life of a monopolist is a quiet life”. In light of mounting consumer criticism of poor service from a concentrated Canadian wireless market, earlier today the Canadian federal government announced new measures to increase competition in the wireless sector.
In making the announcement, Canada’s Industry Minister said:
“Canadian families work hard for their money. Our government is ensuring that they have access to the wireless services they need for their BlackBerrys and iPhones at a price they can afford. Simply put, since coming to office, we have made a stronger, more competitive wireless sector a priority. And the results speak for themselves. Consumers have more choice in the wireless market than ever before. Prices have dropped, and most Canadians now have access to faster mobile speeds and the most sophisticated tablets and smartphones.”
According to the Industry Minister, the new measures, which impose limits (caps) on the acquisition of spectrum by Canada’s large carriers and introduce new measures to facilitate roaming and encourage tower sharing, are meant to provide more choice, better access and more competitive pricing for Canadian wireless consumers.
The measures announced today include: expanding and extending the requirement for wireless companies to provide roaming on their networks to competitors, to ensure that all Canadians, even when traveling, have service regardless of their provider; tightening existing rules to increase cell-phone tower sharing, helping limit the construction of new cell towers (which can operate as a barrier to entry and has been an environmental concern for Canadians); using upcoming spectrum auctions to promote four competitors in each region of the country, from the current “big 3” (the first of which of these new auctions, a 700 MHz auction, will take place in November, 2013); and reviewing the policy on spectrum license transfers in advance of the upcoming auction.
The new measures, meant to promote increased wireless competition, come on the same day that a non-profit study was released arguing that a majority of Canadians are forced to accept poor wireless service (see: Open Media: Time for an Upgrade). The apparent horror experienced by some Canadian wireless customers was also widely recounted by media today – see e.g., the HuffPost’s note: Canada Cellphone Contracts: Horror Stories Ring Through Consumers Troubles With Serice Providers.
The Government’s announced new wireless measures also come of course in the midst of the ongoing CRTC wireless code consultations and also follow the earlier lifting of investment restrictions on small carriers with less than a 10% market share.
CANADIAN CASL (ANTI-SPAM LAW) PRECEDENTS
Do you need a precedent or checklist
to comply with CASL (Canadian anti-spam law)?
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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March 7, 2013
Earlier today, the Federal Government posted comments that it has received to the proposed Industry Canada regulations under Canada’s pending federal anti-spam legislation (CASL). Revised Industry Canada regulations were posted in earlier January for public comments, based on significant industry push back to CASL and, in particular in relation to the proposed Industry Canada Regulations, narrow and arguably commercially unworkable exceptions to the legislation. More than 100 comments have been posted, from a variety of companies, associations, individuals and other organizations.
March 6, 2013
In addition to my contest law services, I offer Canadian contest forms and precedents for random draw and skill contests in Canada (excluding Quebec).
These Canadian contest forms are intended to bridge the gap between legal advice and forms on the web, which may not be current, accurate, reviewed by counsel or even intended for Canadian promotions (i.e., U.S. or international forms that do not include the key requirements to effectively operate a contest in Canada).
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CANADIAN CONTEST RULES & FORMS
Need contest rules and forms for a Canadian Contest? I offer a selection of Canadian contest rules and forms for common types of Canadian contests. For more information see: Contest Forms.
March 4, 2013
John Pecman has held the position of Interim Commissioner of Competition in Canada since late last fall and, until a new Commissioner is chosen and announced, holds the senior role at the Canadian Competition Bureau. On April 5th, the C.D. Howe Institute will be hosting a Toronto roundtable event with Mr. Pecman. From the C.D. Howe Institute:
“John Pecman is Interim Commissioner of Competition. The Commissioner is responsible for the administration and enforcement of the Competition Act and three labelling statutes, the Consumer Packaging and Labelling Act, the Precious Metals Marking Act and the Textile Labelling Act.
As head of the Canadian Competition Bureau, the Commissioner leads the Bureau’s participation in international fora such as the Organization for Economic Cooperation and Development (OECD) and the International Competition Network (ICN), to develop and promote coordinated competition laws and policies in an increasingly globalized marketplace.
March 4, 2013
In a very interesting real estate sector development, the Real Estate Council of British Columbia has updated its advertising requirements for licensees under the British Columbia Real Estate Services Act (see: here and here). In making the announcement, the Council said that:
“Each month, the Real Estate Council receives a large number of complaints relating to licensee advertising. In order to reduce the number of complaints, the Council has developed the following information which is designed to assist licensees in creating advertisements that comply with the requirements set out in the Council Rules.”
Three BC Real Estate Council rules govern real estate salespersons’ advertising in BC: sections 4-6 (general advertising restrictions and requirements), 4-7 (which prohibits false or misleading advertising) and 4-8 (advertising in relation to specific real estate) (see: here). In general, these Council rules require licensees to make certain disclosure (e.g., brokerage name), prohibit false or misleading advertising and owner (or agent) consent for advertising specific property.
The Council’s new advertising guidelines, which, according to the Council are intended to “ensure that the public is neither misled nor confused as to who is providing real estate services and to ensure the accuracy of representations”, include a real estate advertising checklist (with common advertising problem areas), as well as information relating to specific types of advertising and issues including disclosure of the brokerage name, a “top six” list of advertising vehicles where the Council commonly finds licensee advertising violations (e.g., Facebook, Craigslist, Twitter and Google+), guidelines for Internet and social media advertising and a discussion of steps to take to avoid false or misleading advertising.
Some of the general guidance in the Council’s new guidelines that is consistent with the Competition Act’s misleading advertising rules include: ensuring that all representations are accurate and verifiable, disclosure of any conditions or limitations, ensuring that any performance type claims – for example, relating to business volume, honours/awards, etc. – are supported and the source of the supporting data disclosed.
Templates/precedents and checklists to run promotional contests in Canada
Templates/precedents and checklists to comply with Canadian anti-spam law (CASL)
