Welcome to McMillan's Canadian Cartel News. Our first couple
of posts will provide a general introduction to Canadian cartel
legislation, its enforcement and related private actions.
Thereafter, we expect to delve into specific points of interest and
new developments as they arise. But, first things first.
Canada's anti-cartel laws, which predate those of the
Sherman Act by a year, are found in the federal
Competition Act. The Act is administered by the Canadian
Competition Bureau (Bureau), headed by the Commissioner of
Competition (Commissioner). For criminal investigations, the
Competition Bureau receives support from the Public Prosecution
Service of Canada (PPSC), which is responsible for conducting
criminal prosecutions under the Act, including the final decision
to lay charges – or not. In practice, the Director of Public
Prosecutions (DPP), the head of the PPSC, will only initiate cartel
prosecutions based on advice received from the Commissioner, and
the two organizations work very closely together. Nevertheless, the
PPSC has the final choice as to whether charges are laid –
and on how they are resolved.
Section 45(1) of the Act is the central criminal provision that
prohibits cartel conduct in Canada. This section makes it an
offence for any person, with a competitor of that person with
respect to a product, to conspire, agree or arrange to do any of
a) fix, maintain, increase or control the
price for the supply of the product;
b) allocate sales, territories, customers
or markets for the production or supply of the product; or
c) fix, maintain, control, prevent,
lessen or eliminate the production or supply of the product.
This is a change from the Canadian law as it stood a few years
ago. Until 2010, Canadian cartel law required proof of
"undue" effects. Now, subject to the defense noted below,
the specific prohibited agreements between competitors are per
A person who agrees with a competitor on any of the above
matters is guilty of an indictable offence and liable to
imprisonment for a term not exceeding 14 years or to a fine not
exceeding $25 million (CDN) or to both. In addition, the conduct
gives rise to civil liability – in practice enforced by class
actions – and may disqualify those convicted from bidding on
Section 45(4) provides a defence where it can be demonstrated
that the otherwise illegal agreement with a competitor was
"ancillary" to a broader arrangement between the parties
which is directly related to, and reasonably necessary for
giving effect to, the objective of the broader or separate
agreement or arrangement.
In addition to the criminal prohibition, the Act also contains a
civil competitor agreement provision in Section 90.1. This targets
agreements between competitors beyond the three specifically
prohibited cartel matters. This section, known as the civil
reviewable practices provision, allows the Bureau to seek
prohibition orders that force parties to stop engaging in what the
Competition Tribunal (the administrative body in charge of
adjudicating non-criminal matters under the Act) determines to be
agreements which injure competition. On application by the
Commissioner, the Tribunal can prohibit a person from doing
anything under an agreement or arrangement or require any person,
with the consent of that person and the Commissioner, to take any
other action. To make such orders, the Tribunal must find that the
agreement or arrangement between two or more competitors prevents,
lessens, or is likely to prevent or lessen, competition
substantially in a market.
That is the quick primer on Canada's new anti-cartel
legislation. Please return in two weeks – or so – for
our overview of the Competition Bureau's Immunity and Leniency
The foregoing provides only an overview and does not
constitute legal advice. Readers are cautioned against making any
decisions based on this material alone. Rather, specific legal
advice should be obtained.
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.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).