Canada: Competition Bureau Updates Guidance On Confidential Information

Last month Canada's Competition Bureau (the Bureau) released its updated Information Bulletin on the Communication of Confidential Information under the Competition Act (the New Policy). The bulletin clarifies and revises elements of the Information Bulletin on Confidential Information under the Competition Act (the Old Policy) that was released six years ago. These changes reflect several trends in Canadian competition law such as: the public disclosure of mergers; increased cooperation between foreign competition authorities; and preserving and strengthening the Bureau's immunity and leniency programs as effective tools for enforcement.

The Old Policy

General

Under the Old Policy, the Bureau's general practice was to minimize the extent to which the confidential information it obtained while administering or enforcing the Competition Act (the Act) was communicated to persons outside the Bureau. The Old Policy stated the Bureau would be vigilant in preventing the communication of confidential information unless specifically permitted under the Act, and even when permitted, it would first consider whether the disclosure was advisable or necessary.

The Old Policy also set forth four limited circumstances in which the Bureau would utilize its discretion to communicate confidential information:

  1. communication to a Canadian law enforcement agency;
  2. communication for the purposes of administering or enforcing the Act;
  3. communication where the information had otherwise been made public; or
  4. communication authorized by the person who provided the information.

In administering and enforcing the Act, the Old Policy stated the Bureau may share confidential information with: (i) market participants such as customers, suppliers and competitors, in order to elicit certain information from them that may be used as evidence by the Bureau (although, in such cases, the Bureau would take steps to refrain from or minimize the communication of confidential information); (ii) industry, economic or legal experts retained by the Bureau to provide an opinion or analysis; (iii) international enforcement agencies in obtaining enforcement assistance or coordinating enforcement actions; (iv) courts, when making an application for the use of wiretaps or production orders; and (v) the courts and the Competition Tribunal, when initiating enforcement proceedings under the Act.

The Old Policy stated that if the Bureau was required to use confidential information before the courts or the Competition Tribunal, it would put measures in place to protect the confidentiality of the information, provided such measures did not hinder the enforcement or administration of the Act.

International Cooperation

When disclosing confidential information to foreign competition authorities to assist their law enforcement agencies, the Old Policy noted the Bureau would, in all such cases, seek to maintain the confidentiality of the information either through formal international instruments or assurances from the foreign authority.

The Immunity Program

The Old Policy also referred to the Bureau's immunity program. In particular, the Bureau would not disclose the identity of an applicant for immunity under this program unless the disclosure was: (i) required by law; (ii) necessary to obtain or maintain judicial authorization for the exercise of investigative powers; (iii) for the purpose of securing the assistance of a Canadian law enforcement agency in the exercise of investigative powers; (iv) agreed to by the applicant; (v) already made by the applicant; or (vi) necessary to prevent the commission of a serious criminal offence.

As well, the Old Policy stated the Bureau would not disclose the identity of an immunity applicant or any information obtained from the applicant to any foreign law enforcement agency unless it received the applicant's consent.

Third-Party Actions

Finally, the Old Policy set forth the Bureau's policy of refusing to voluntarily disclose confidential information in its possession to third parties contemplating or initiating a legal action under section 36 of the Act to recover damages incurred as a result of conduct contrary to the criminal provisions of the Act. The Bureau would oppose subpoenas for the production of confidential information if compliance with them would potentially interfere with an ongoing examination or inquiry, or would otherwise adversely affect the Act's administration or enforcement.

Changes made by the new policy

The New Policy differs from the Old Policy in several ways. Specifically:

Public Disclosure of Mergers

The New Policy refers to the Bureau's Merger Register, which was introduced in 2012. Specifically, the New Policy states the Bureau will, through its Merger Register, disclose the identity of the parties to a merger it has reviewed under Part IV of the Act once the review is complete.

International Cooperation

In section 4.1.2, the Bureau added bid-rigging and criminal conspiracies as crimes about which it will communicate confidential information to Canadian law enforcement agencies in an effort to more effectively combat criminal anti-competitive behaviour. The Old Policy only explicitly referred to mass marketing fraud and deceptive marketing practices as crimes about which it would share confidential information with Canadian law enforcement agencies.

The Immunity and Leniency Programs

The New Policy adds reference to the Bureau's leniency program. The Bureau released its Bulletin on the Leniency Program in 2010 (the Leniency Bulletin). The Leniency Bulletin provides that the Bureau will recommend lenient treatment in sentencing for parties who have engaged in criminal anti-competitive conduct prohibited by the Act but who approach the Bureau, admit their illegal activity and offer to cooperate with the Bureau's investigation.

The Old Policy only referred to the Bureau's immunity program, which applies only to the first party engaged in criminal anti-competitive conduct who contacts the Bureau to admit his or her guilt and cooperate with the Bureau's investigation. In contrast, the leniency program applies to subsequent parties who approach the Bureau.

As a result, the Bureau elaborated in the Leniency Bulletin on how it will treat confidential information. The New Policy also elaborates on the Bureau's practice of disclosing the identity of a party seeking leniency under the leniency program (or information provided by such party) to foreign law enforcement agencies. In particular, the New Policy states the Bureau will not disclose such information to a foreign enforcement agency unless it receives the consent of the party seeking leniency or unless required by law. In regard to the latter, the New Policy does not elaborate on when it would be required by law to disclose such information.

In the New Policy, the Bureau reaffirmed its stance on third parties contemplating or initiating legal action under section 36 of the Act.

Other Noteworthy Developments:

  • Whistleblowing Provisions: in regard to the whistleblowing provisions of the Act (section 76), the Old Policy stated that the Bureau would make every effort to ensure the identity of the whistleblower is kept confidential.  The New Policy provides further guidance on the whistleblowing provisions by elaborating when the Bureau may communicate a whistleblower's identify or any information that could reveal his or her identity. The New Policy states that the Bureau may communicate such information in the four limited circumstances set out above under the "The Old Policy."
  • Intervening before the Competition Tribunal: the New Policy adds a reference to the price maintenance provisions of the Act (section 76) as an avenue for private parties to apply for leave to make an application to the Competition Tribunal for a remedial order. In such applications, the commissioner has the ability to intervene and if he does, the New Policy states that the Bureau's policy regarding communicating confidential information will be the same as with other applications before the Tribunal or courts; it will only disclose such information for the purposes of administering or enforcing the Act.

The New Policy does not signal a shift in approach to treating confidential information under the Act. Rather, it represents a policy update to reflect developments in competition law (particularly the increased cooperation among antitrust agencies) and changes in Bureau practice.

The author wishes to thank Matthew Zedde, articling student, for his help in preparing this legal update.

Norton Rose Fulbright Canada LLP

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