John Pecman, who was confirmed as Canada's new Commissioner
of Competition on June 12th, has launched a
"Criminal Cartel Whistleblowing Initiative" to intensify
the Competition Bureau's efforts to investigate and prosecute
cartel activity. Unlike the Bureau's Immunity and Leniency
Programs, which have had considerable success in getting companies
(and occasionally individuals) involved in cartel offences to
self-report, the whistleblowing initiative is targeted at parties
who are aware of but not implicated in an offence.
Protections for whistleblowers were added to the Competition Act
in 1999. The Bureau is not merely authorized, but is required, to
keep the identity of a whistleblower confidential. In addition,
there is a prohibition for an employer to take any retaliatory
action against an employee who has provided information to the
Bureau regarding an offence that the employee believes has been or
is intended to be committed (or the employee's refusal to
participate in the commission of an offence).
The Bureau has not received many tips under the whistleblowing
provisions. This is likely a function of lack of awareness and
incentives, rather than any obvious defect in the statutory
protections. The Whistleblowing Initiative is designed to address
the awareness issue by marketing the availability of the
whistleblowing option, including with a toll-free hotline
(1.800.348.5358). If this does not yield significant results, we
expect that the Bureau may explore the possibility of establishing
financial incentives for whistleblowers in a manner similar to the
Canadian government's recent proposal to provide rewards of up
to 15% for tips that assist in catching international tax
A little known feature of the Bureau's whistleblowing regime
is that it may be available to businesses as well as individuals.
The protection for the whistleblower's identity applies to any
person who has notified the Commissioner of a possible offence and
requested confidentiality and the retaliation provisions apply to
independent contractors as well as employer-employee relationships.
Thus, in our view, these provisions should apply to a customer
reporting conduct involving its suppliers to the Bureau. However,
the protection is only available in respect of offences, and would
therefore not apply to abuse of a dominant position or other
reviewable distribution practices.
The Whistleblowing Initiative, as well as recent high profile
prosecutions in the construction, gasoline, chocolate confectionary
and auto parts industries, among others, are a reminder about the
importance of having an effective competition law compliance
program. While some companies have incorporated internal
whistleblowing protections and procedures in their compliance
programs, many have not. Receiving such a tip before a call is
placed to the Bureau can provide a company with important
opportunities to access the time-sensitive Immunity and Leniency
Programs before being targeted with search and seizure, subpoena or
other investigative powers.
The foregoing provides only an overview. Readers are
cautioned against making any decisions based on this material
alone. Rather, a qualified lawyer should be consulted.
The Canadian Competition Bureau issued a template document for use as a form of Consent Agreement, to be filed with the Competition Tribunal to resolve concerns the Bureau may have with proposed mergers.
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