A few interesting competition and regulatory developments caught my eye today including:
John Greenwood (Financial Post) wrote a rather good article on the LIBOR investigation: Fallout from LIBOR Scandal Likely to Hit Canada’s Financial Industry
The Conference Board of Canada published a new report on Chinese foreign direct investment in Canada: Fear the Dragon? Chinese Foreign Direct Investment in Canada.
The Fraser Institute published a comparative note on Canadian and European airline pricing: Why Europe Has Cheap Airfares: Competition.
The ABA’s Section of Antitrust Law has published its June edition of Antitrust Source. This new issue of the ABA’s bi-monthly online antitrust journal includes articles on a Roundtable Conference with Enforcement Officials (including Jon Leibowitz (FTC), Sharis Pozen (DoJ), Joaquin Almunia (EC) and Ashok Chawla (Competition Commission of India)), the Risk of Tagbacks to Leniency Applicants in Cartel Investigations and Analyst Calls and Price Signaling Under EU Law.
For the complete issue see: Antitrust Source – June 2012
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On July 4, 2012, the Competition Bureau announced that it had issued a No Action Letter clearing the Maple/TMX transaction (see: Competition Bureau Completes Review of Proposed Maple-TMX Transaction).
I’m a bit of a sucker for eloquent [if geeky] old competition law quotes. In that vein, I came across this oldie where the Alberta Supreme Court (in R. v. Clarke, 1907) talks about the importance of competition in a new country. When I reflected a bit on this quote, I realized that Canada had only had competition law for 18 years when this case was decided, in relation to a lumber cartel in Alberta. (Although us Canadians can continue to brag as having competition law for one whole year longer than the U.S.) In any event, great quote I thought and something of the western frontier spirit in it:
“If there is anything important in connection with the affairs of a new country, anything important in connection with the affairs of a business community, it is that men should have the right – and I have no doubt that that was the intention of parliament so far as this section is concerned – that men should have the absolute right, so long as they did not interfere with the rights of the public, to conduct their own business in the manner in which they see fit. If this firm did not desire to make profits in selling lumber to the city of Edmonton or in selling lumber to the city of Calgary, that was a matter of their own concern, and it was not in the interests of the public that the members of this association assumed to bulldoze this particular individual in regard to the manner in which he should conduct his business. Various other instances were brought forward in which practically the same class of thing was done.”
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For anyone that doesn’t know, the Institute of Competition Law’s website has a terrific online directory of current competition/antitrust law articles and posts from around the world on its e-Competitions National Competition Laws page.
And thanks a lot to the Institute for including some of our material on their very fine (and apparently growing) site!
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In two interesting notes yesterday and today (see: here and here) Bloomberg has reported that the Competition Bureau is seeking to overturn an earlier interim stay obtained by RBS in relation to a court order to produce records related to the Bureau’s ongoing LIBOR price-fixing investigation involving Deutsche Bank AG, HSBC, Citigroup Inc., ICAP Plc and RP Martin Holdings Ltd.
According to Bloomberg, the Bureau sought and obtained court orders for the compulsory production of documents (section 11 orders) requiring the firms being investigated to produce documents including lists of individuals responsible for making Yen LIBOR submissions and internal communications. Also according to Bloomberg, the Bureau has taken the position that its [section 11 orders] “may be the only tool available to the Commissioner to obtain evidence of an international cartel formed by foreign-based persons impacting the Canadian economy but where records are held in a foreign jurisdiction …”
On June 21, 2012 the Competition Bureau announced that, together with the Unité permanente anticorruption (UPAC) in Quebec, it has laid 77 charges against 11 individuals and 9 companies in relation to a broad range of allegations that include corruption in municipal affairs, breach of trust, influencing municipal officers, fraud upon the government, production and use of counterfeit documents, accepting reward, advance or benefit, extortion and conspiracy.
With respect to allegations of competition law violations, the Bureau has announced that bid-rigging charges were also laid under section 47 of the Competition Act.
According to the Bureau, this newly announced case is the result of an investigation that ran for more than two years, which uncovered “evidence of a sophisticated collusion scheme giving preferential treatment to a group of contractors to obtain municipal contracts, mainly for infrastructure projects in Saint-Jean-sur-Richelieu and surrounding areas.”
Under section 45 of the Competition Act (the criminal conspiracy offences of the 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) and (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).
In addition to these conspiracy offences, the Competition Act (somewhat in contrast to, for example, the U.S. where bid-rigging is challenged under Section 1 of the Sherman Act together with other types of cartels, such as price-fixing or market division arrangements) also contains stand-alone bid-rigging offences (under section 47 of the Act).
In this regard, section 47 of the Act makes it a criminal offence to: (i) agree to not submit a bid or tender, (ii) agree to withdraw a bid or tender already submitted (recently added to the Act as a result of the 2009 amendments) or (iii) submit a bid or tender that is arrived at by agreement. Bid-rigging in Canada is also, like the amended section 45, ”per se” illegal, in that no anti-competitive effects on a relevant market (or markets) need to be established in order to make out an offence (though all of the elements need to be established on the standard criminal burden of proof – i.e., beyond a reasonable doubt).
Some common types of coordinated bidding activities that can contravene the criminal bid-rigging provisions of the Act include: “cover”, “courtesy” or “complementary” bidding (some firms submit bids that are too high to be accepted, or with terms that are unacceptable to the party calling for bids, to protect an agreed upon low bidder); “bid suppression” (one or more bidders that would otherwise bid agree to refrain from bidding or withdraw a previously made bid); “bid rotation” (all parties submit bids but take turns being the low bidder according to a systematic or rotating basis); “market division” (suppliers agree not to compete in designated geographic areas or for specified customers); and “subcontracting” (parties that agree not to submit a bid, or submit a losing bid, are awarded subcontracts or supply agreements from the successful low bidder. Trade association activities involving information exchanges about upcoming or proposed tender opportunities, or that facilitate coordination of bids and tenders, can also raise competition law concerns.
The Oxford University Press, Journal of Antitrust Enforcement has issued a call for papers:
“Oxford University Press is delighted to announce the launch of a new competition law journal dedicated to antitrust enforcement. The Journal of Antitrust Enforcement forms a joint collaboration between OUP, the Oxford University Centre for Competition Law and Policy and the George Washington University Competition Law Center.
The Journal of Antitrust Enforcement will provide a platform for cutting edge scholarship relating to public and private competition law enforcement, both at the international and domestic levels.
The journal covers a wide range of enforcement related topics, including: public and private competition law enforcement, cooperation between competition agencies, the promotion of worldwide competition law enforcement, optimal design of enforcement policies, performance measurement, empirical analysis of enforcement policies, combination of functions in the mandate of the competition agency, competition agency governance, procedural fairness, competition enforcement and human rights, the role of the judiciary in competition enforcement, leniency, cartel prosecution, effective merger enforcement and the regulation of sectors.
Submission of papers: Original articles that advance the field are published following a peer and editorial review process. The editors welcome submission of papers on all subjects related to antitrust enforcement. Papers should range from 8,000 to 15,000 words (including footnotes) and should be prefaced by an abstract of less than 200 words.
General inquiries may be directed to the editors: Ariel Ezrachi at the Oxford CCLP or William Kovacic at George Washington University. Submission, by email, should be directed to the Managing Editor, Hugh Hollman.”
For more information see:
Journal of Antitrust Enforcement
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Templates/precedents and checklists to run promotional contests in Canada
Templates/precedents and checklists to comply with Canadian anti-spam law (CASL)
