Cartels & Other Competition Criminal Matters

This article considers the potential for changes in the treatment of vertical agreements under South African competition law as a result of recent amendments to the Competition Act, as well as current policy views within the law-makers and regulators.

Section 5(1) of the South African Competition Act prohibits vertical agreements that substantially prevent or lessen

Joint ventures are generally only of interest to competition authorities when they trigger merger notification obligations, or are otherwise used as a platform for collusive or anticompetitive behavior.

Recently, the South African competition authorities’ interest has been peeked in joint ventures that have purportedly been used as a platform for cartel activity, and a number

On October 26, 2017, the Canadian Competition Bureau (“Bureau”) released for public comment a revised version of its Immunity Program, under which a party may receive immunity from criminal prosecution if the party is the first to disclose an offence and agrees to cooperate with the Bureau’s investigation and prosecution of others. The revisions, discussed below, has led to comments and concerns from, among others, the CBA National Competition Law Section and the ABA Section of Antitrust Law. These comments and concerns are discussed below.

According to the press release, the program is being updated to increase transparency and predictability in light of legal and policy developments.

The Bureau has advised that the changes are prompted partly by the outcome of recent unsuccessful prosecutions and include the following:

  • Interim Grant of Immunity: Documentary and testimonial evidence will be provided under an interim grant of immunity (IGI). Final immunity will be provided when the applicant’s cooperation and assistance is no longer required.
  • End of Automatic Corporate Immunity for Directors, Officers and Employees: Automatic coverage under a corporate immunity agreement for all directors, officers and employees will no longer be provided. Instead, individuals that require immunity will need to demonstrate their knowledge of the conduct in question and their willingness to cooperate with the Bureau’s investigation.
  • Greater Use of Recordings: Witness interviews may be conducted under oath and may be video or audio recorded. Proffers, statements made by an applicant (usually through counsel) to the Bureau where the applicant is expected to reveal its identity and describe in detail the anti-competitive activity, may also be audio recorded.
  • Privileged Documents: Non-privileged records from companies’ internal investigations will be treated as presumptively disclosable facts in the possession of cooperating parties. And while privileged records will continue to be protected from disclosure, applicants will now be required to justify their claims of privilege.


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On October 27, 2017, Cardinal Ventilation Inc. was fined $375,000.00 after pleading guilty to one count of bid rigging related to three condominium development projects in Montreal. The contracts in question related to the supply and installation of ventilation and/or air conditioning systems in residential high-rise construction projects in the greater Montreal region.

Cardinal Ventilation Inc. admitted that it conspired with competing Montreal-area companies to obtain a ventilation contract by ensuring it offered the lowest bid on the Faubourg St-Laurent Phase II construction project in Montreal. The company also admitted to its participation in two other agreements to ensure that competing firms would get the contracts for two other projects: Le Roc Fleuri and Tour St-Antoine.

The courts have imposed fines totalling over $1 million in this matter.

Background

The Competition Bureau began investigating this matter following a tip from a former employee of one of the accused companies. Over the course of the investigation, Bureau officers searched many sites, seized thousands of documents and interviewed numerous witnesses. The Bureau eventually uncovered evidence indicating that several companies had coordinated their bids in order to pre-determine the winners of the residential construction contracts, while blocking out competitors. The Bureau’s investigation found evidence of bid rigging in five competitive bidding processes between 2003 and 2005, for contracts worth a total of approximately $8 million. In December 2010, the Bureau laid charges against eight companies and five individuals.

There have been several plea agreements in the matter. To date, four companies and two individuals have pleaded guilty for their participation in the bid-rigging scheme. As part of one individual’s plea agreement, he agreed to complete 50 hours of community service and to collaborate with the Bureau’s ongoing involvement in the matter.

In one case, charges against one of the accused individuals were withdrawn in exchange for the individual’s full cooperation with the Bureau’s investigation.

There is one remaining accused in the matter.


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The passive attendee in meetings at which potentially collusive conduct takes place has recently been considered further and developed by the South African Competition Appeal Court in the ‘bicycles case’.

Previously addressed by the South African Competition Tribunal in DPI Plastics Pipes (2012), the Tribunal concluded that an attendee simply cannot stay silent nor

On September 9, 2016, the Quebec Court of Appeal (“QCCA”) issued its judgment in two gasoline price-fixing conspiracy cases. The cases were the product of the Competition Bureau’s (the “Bureau”) year-long investigation into the fixing of retail gasoline prices in the province of Quebec from April 2005 to May 2006.

The three accused individuals in the cases (Yves Gosselin, Linda Proulx, and Michel Lagrandeur) were charged under the Competition Act’s (the “Act”) former price-fixing provisions for conspiring to fix retail gasoline prices in the cities of Magog and Sherbrooke. All three accused were subsequently convicted at trial. The trial judge arrived at his decision based on the preponderance of evidence adduced during the trial, which included, among other things, hundreds of intercepted telephone conversations, which included statements by co-conspirators.


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The Competition Bureau Continues to Make History in its Enforcement of the Criminal Conspiracy Provisions of the Competition Act

For the second time in as many months, the Competition Bureau (the “Bureau”) has made an historic announcement about its efforts to enforce the criminal conspiracy provisions of the Competition Act (the “Act”).

On July 20,

On July 28, 2016, the Competition Bureau (the “Bureau”) released its 2016-2017 Annual Plan, entitled “Strengthening Competition To Drive Innovation”. While this year’s Annual Plan ostensibly repackages both the Bureau’s 3-year Strategic Vision and its 2015-16 Annual Plan, it does contain a few notable developments.

Indeed, the Bureau has introduced 10 new “areas of focus”

On September 10, 2015, Christopher Staines filed a class action in the Ontario Superior Court of Justice against numerous banks for their role in an alleged conspiracy contrary to section 45 of the Competition Act (the “Act”). Staines claims, among other things, that the defendant banks had conspired, agreed and/or arranged with each other to

The Competition Bureau (Bureau) announced yesterday that the Public Prosecution Service of Canada (PPSC) has entered a stay of proceedings against 4 key targets, in one of the Bureau’s most labour-intensive, criminal investigations to date. Indeed, following the Bureau’s 6-year investigation of alleged price-fixing in the chocolate confectionary industry, criminal proceedings against ITWAL Ltd., Mars