Under the Competition Act (the “Act”), any six persons who are resident in Canada, at least 18 years of age and of the opinion that (a) an offence has been or is about to be committed under the criminal provisions in the Act, (b) grounds exist for the making of an order under the civil provisions in the Act or (c) a person has contravened an order made by the Competition Tribunal or a court pursuant to the Act, may apply to the Commissioner of Competition (the “Commissioner”) for an inquiry into the matter. These types of applications are commonly referred to as “six resident applications”.
A six resident application must be accompanied by a statement that includes the following: (a) the names and addresses of the applicants; (b) the nature of the alleged contravention or offence under the Act; (c) the names of persons they believe to be concerned; and (d) a statement of the evidence supporting their opinion.
Upon receipt of a six resident application, the Commissioner is required to commence an inquiry into all such matters as the Commissioner considers necessary to inquire into with a view of determining the facts. Upon commencing an inquiry, the Commissioner has access to and may in his discretion use a wide range of formal information gathering tools, such as (a) orders requiring oral examinations under oath, the production of documents and/or the delivery of written information under oath; (b) search warrants; or (c) in certain cases, wiretaps.
Six resident applications are a relatively straightforward and cost-effective tool for Canadians looking to capture the attention of the Competition Bureau (the “Bureau”). There are many examples of six resident applications resulting in inquiries under the Act. In the past, six resident applications have generally been used to bring attention to consumer-protection issues. For example, Friends of the Earth Canada recently brought a six resident application with respect to alleged false or misleading marketing practices by certain manufacturers and distributors of single-use “flushable” wipes. This application has resulted in increased awareness for Canadians of the environmental impact of such wipes.
While six resident applicants are entitled to updates on the progress of an inquiry, they should be mindful that the Bureau is required by law to conducts its investigations in private and is bound by strict confidentiality provisions in the Act. If a prosecution or civil proceeding results from an inquiry, that fact will become a matter of public record and the Bureau will often make the public aware through announcements or position statements. However, where no prosecution or civil proceeding has been commenced, and despite that the Bureau strives to be as transparent as possible, parties can, at times, feel “in the dark” while the Bureau advances its inquiry. Should the Bureau commence an inquiry pursuant to a six resident application and discontinue its inquiry, the Commissioner is required to inform the six resident applicants of the reasons for doing so.