Canada: Cartels: An Enforcement Priority

The Commissioner of Competition (the "Commissioner") has identified cartels, and particularly domestic cartels, as a top enforcement priority for the Competition Bureau (the "Bureau"). The Commissioner also has stated that she will continue to seek fines and prison terms against individuals involved in cartel offences, where appropriate, to increase accountability and deterrence.

Importance of Immunity Program

As a practical matter, the Bureau's policy of offering immunity to cartel participants who disclose the cartel to the Bureau and co-operate in the resulting investigation and proceedings against the other participants, continues to play a major role in many of the Bureau's proceedings. During the past year, the Bureau received 13 requests for immunity and has averaged 8 requests per year since the immunity program was first published in 2000. A senior Bureau officer recently identified the immunity policy as the Bureau's "single most powerful means of detecting cartel activity".

Last year, with a view to ensuring its continued effectiveness, the Bureau initiated a major consultation on its immunity policy. The issues addressed by the consultation process include:

  • How to balance the concern of immunity applicants that the information they provide be kept confidential against the disclosure requirements of the Canadian court system and the Bureau's need to coordinate with other competition authorities?
  • Are there certain communications that ought to be made in writing notwithstanding the Bureau's general acceptance of a paperless immunity application process?
  • How should the Bureau define what constitutes the "instigator/leader" of a cartel and how should they be treated?
  • Should immunity also be automatically extended to past directors/officers/employees, which is not the current Bureau position?
  • When is it appropriate to "carve out" directors/officers/employees from a grant of immunity?
  • Should parties that fail to disclose a second offence under the Competition Act face an increased penalty ("penalty plus") for that offence in addition to possible revocation of immunity for the first offence they disclosed?
  • Is providing restitution an appropriate prerequisite for immunity?
  • What are the circumstances in which immunity should be revoked?
  • Should the Bureau adopt a formalized position on when leniency short of complete immunity will be available?
  • Is it appropriate for the Bureau to initiate approaches to potential immunity applicants to encourage one or more to come forward?

The Bureau is expected to issue a revised immunity policy early in 2007.

Domestic Cartels

2006 started with the significant resolution of a cartel investigation involving three Canadian distributors of carbonless sheets. Davies acted for one of the parties in this matter.

Each company pleaded guilty and was fined $12.5 million, a record for a Canadian domestic cartel, for conduct that included agreements to respect market shares, implement a common discount program, and share sales and pricing data. Key personnel were also removed from positions in the companies' paper merchant businesses.

Also in the domestic context, a judge in Newfoundland discharged 12 accused companies and individuals after determining that a preliminary inquiry revealed insufficient grounds to allow conspiracy charges to proceed to a trial. The charges, which were filed in 2004, related to an agreement among taxi operators in the City of St. John's not to bid on tenders for the exclusive supply of taxi services to the local airport, hospital and university, as well as certain hotels. The judge was not satisfied that there was sufficient evidence that the agreement unduly lessened competition in a specific product market, but also appeared to be somewhat influenced by the fact that the agreement was open and disclosed both to the persons calling for tenders and the St. John's municipal taxi regulatory authority, which declined to take any action. The Attorney General of Canada (who is responsible for prosecuting criminal offences under the Competition Act) is appealing this decision.


At a May 2006 meeting of the International Competition Network in South Africa, participating competition authorities highlighted obstruction of justice as a "major problem" in cartel investigations because "it swings the balance further in favour of cartelists".

Several months later, the Bureau announced on September 11, 2006 that the Attorney General of Canada had laid charges against the employee of a Québec ventilation company for obstructing the course of a Bureau investigation and destroying documents during the execution of a search warrant. It was alleged that the individual in question had removed and destroyed relevant pages from his agenda. Penalties for obstruction under the Competition Act include a maximum fine of $5,000 or two years in prison, or both. The maximum penalties for the destruction of documents are $25,000 in fines, or two years in prison, or both.

International Cartels

In past years, international cartels have dominated the Bureau's criminal enforcement agenda. However, the only major international cartel proceeding in 2006 involved a prohibition order against Sotheby's, an international auction house, following an investigation into an international price-fixing conspiracy between Sotheby's and Christie's between 1993 and 2000. (In related proceedings, Sotheby's pleaded guilty and paid a U.S.$45 million fine in the U.S. in 2000, its former chairman was subsequently convicted and imprisoned after a contested trial in the U.S., and Sotheby's was fined €20.4 million by the European Commission in 2002. Christie's received immunity in the U.S. and the EU.) The Canadian resolution did not involve any guilty plea, but did require Sotheby's to pay about $800,000, representing the Bureau's investigative costs, and take measures to ensure future compliance with the Competition Act. It appears that the Commissioner was prepared to settle without a guilty plea because the effects in Canada were unclear. In particular, the Bureau's investigation revealed that Canadians may have been induced to consign their property to U.S. auctions affected by the conspiracy, but found no evidence that the conspiracy affected auctions in Canada.

Possible Amendments

The possibility of significant amendments to the Canadian cartel provisions of the Competition Act has been the subject of active debate for some time. Such amendments were the subject of a recommendation in a 2002 report of a Parliamentary Committee. However, the current minority government has not indicated that amendments to the Competition Act are a priority. Nevertheless, the Commissioner has recently suggested that she intends to continue to pursue opportunities to amend the Competition Act to provide for a certain category of per se cartel offences, as well as a noncriminal means of challenging agreements among competitors that substantially lessen or prevent competition. The current general cartel offence (but not the bid-rigging offence, for example) requires that the government prove beyond a reasonable doubt that the agreement has prevented or lessened competition "unduly", which in turn requires both behaviour that reduces competition or limits entry and at least some degree of market power. While a new per se offence could bring Canadian competition law closer to the U.S. model, there is vigorous debate in Canada on whether that outcome is desirable in Canada's smaller market economy, and whether there is any demonstrated need for an amendment in the first place. In any event, it seems clear that the issue of whether the Canadian cartel offence should be amended to more easily capture an expanded range of commercial activity will continue to be raised for some time to come.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
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).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.