“From Collusion to Competition” – Fifth Issue

Jan 31, 2013

CPI Cartel Column edited by Rosa Abrantes-Metz (NYU Stern School of Business)

Introduction by Rosa Abrantes-Metz

Happy New Year, and welcome to January’s issue of the cartel column “From Collusion to Competition.” Today we have two excellent articles from our neighbor to the north, Canada.

The first article, by Mark Katz from Davies, Ward, Phillips & Vineberg LLP, reviews Canada’s long history of pursuing and prosecuting cartels, with its active and sophisticated leniency program. Despite the established pedigree of cartel prosecution, penalties and sanctions are the area of anti-cartel enforcement in which Canada is seen as lagging behind, particularly when compared to the United States. This happens despite the fact that the Competition’s Act core prohibition against cartel conduct makes it a criminal offence for competitors (or potential competitors) to agree to fix prices, allocate markets or restrict output. Involved parties are subject to imprisonment for a term of up to 14 years and to fines of up to CDN$25 million per count. Similarly, violations of the criminal prohibition against bid-rigging expose parties to the potential of fines “in the discretion of the court” and to imprisonment for a term not exceeding 14 years. However, in practice the sanctions imposed in Canada for cartel offences have been relatively modest. The article details signs of change in this area over the last few years but also issues a note of caution, in that difficulties and resistance to such changes should not be underestimated.

Punishing Cartels in Canada: Is a “Sea Change” on the Horizon? by Mark Katz (Partner, Davies Ward Phillips & Vineberg LLP)

In the second article, Huy Do and Antonio Di Domenico from Fasken, Martineau, DuMoulin LLP, focus on plea and immunity agreements (and their potential repudiation), which have become emerging antitrust issues in Canada. The authors review relevant case law and its implications for antitrust matters in Canada, specifically those involving plea and immunity agreements. In particular, the article discusses the recent case R. v. Nixon, a general criminal law matter, in which the Supreme Court of Canada concluded that Crown prosecutors can exercise their prosecutorial discretion to renege on plea agreements, and that such decisions are only reviewable by courts for abuse of process. Additionally, the Supreme Court found that the burden of proof for demonstrating an abuse of process is high and lies with the accused. The article also discusses R. v. Couche-Tard Inc, an antitrust matter involving the repudiation of a plea agreement, in which a Québec-based gas retailer and convenience store operator overcame charges of price-fixing under Canada’s Competition Act. A Québec Superior Court judge concluded that the Crown’s repudiation of a plea agreement irreparably prejudiced the fairness of the proceeding.

“Deal or No Deal” – The Antitrust Plea Agreement that Came and Went in R. v. Couche-Tard Inc. by Huy Do (Partner, Fasken Martineau DuMoulin LLP) and Antonio Di Domenico (Partner, Fasken Martineau DuMoulin LLP)

I hope you enjoy the reading! Next month’s issue will be dedicated to Romania.

Rosa M. Abrantes-Metz