Originally published in Blakes Bulletin on
Competition Law May, 2008
On April 28, 2008, the Competition Bureau (the Bureau)
released its Draft Information Bulletin on Sentencing and
Leniency in Cartel Cases (the Draft Bulletin) for public
consultation. The Draft Bulletin outlines the factors that the
Bureau will consider when making sentencing recommendations to
the Director of Public Prosecutions (the DPP) and the process
for seeking a lenient sentence. Interested parties have been
asked to provide comments no later than July 25, 2008.
The Draft Bulletin sets out the general principles of
sentencing that the Bureau will consider when making sentencing
recommendations to the DPP. The Draft Bulletin states that, in
the Bureau's view, the "fundamental
principles" governing sentencing are that a sentence must
be proportionate to the gravity of the offence and that it must
reflect the degree of responsibility of the offender.
In cartel cases, the Bureau's sentencing
recommendation begins with an assessment of the magnitude of
economic harm — that is, the overall economic harm
caused by the cartel. The Bureau uses the
"overcharge" — the amount paid by victims
of the cartel over and above what would have been paid in the
absence of the cartel — as the basis for its
sentencing recommendations. The Draft Bulletin notes that, in
most cases, it may be difficult to quantify the actual economic
harm caused by the cartel. Consequently, the Bureau will use a
proxy to estimate economic harm for sentencing purposes. The
proxy is the volume of commerce in Canada affected by the
cartel (i.e., the volume of the cartel participants'
sales of the product that was the object of the
anti-competitive agreement over the relevant time period)
multiplied by an "overcharge" factor of 20%.
Various aggravating and mitigating factors that may affect
the recommended sentence are enumerated in the Draft Bulletin.
According to the Draft Bulletin, aggravating factors
coercion or instigation;
large corporate size or market share;
the degree of planning, covertness and complexity of the
lengthy duration of the illegal activity;
the nature of the victims; and
high level of senior officer involvement.
Mitigating factors include:
co-operation with authorities;
acceptance of responsibility; and
restitution for victims.
With respect to the Bureau's Leniency Program, the
Draft Bulletin provides that the Bureau's
recommendation for leniency will be directly proportionate to
the contribution a leniency applicant makes to the
Bureau's investigation and the eventual prosecution.
Leniency may be available when the DPP has not yet filed
charges and where the party has terminated its participation in
the illegal activity; co-operates fully with the
Bureau's investigation and any subsequent prosecution
by the DPP; and admits that it has engaged in the
anti-competitive conduct which may constitute an offence under
the Act and agrees, if charged by the DPP, to plead guilty and
be sentenced for its participation in the illegal activity.
The Bureau will consider various factors in recommending
that a party receive lenient treatment, including: the
timeliness of the co-operation; the value of the evidence; and
whether the applicant provides evidence of other unrelated
The first applicant that meets (and continues to meet) the
conditions of the Leniency Program is eligible for a reduction
of up to 50% of the fine that would have otherwise been
recommended, while subsequent leniency applicants may be
eligible for reductions of up to 30%.
The process for obtaining leniency is as follows:
The applicant makes a request for leniency by contacting
the Senior Deputy Commissioner of Competition, Criminal
The applicant provides a "proffer" to the
Bureau in which it describes in detail the anti-competitive
activity for which leniency is sought and its effect in
The Bureau will recommend that the DPP consider lenient
treatment for the applicant. This recommendation is
conditional upon the applicant's ongoing co-operation
with the investigation and prosecution.
The applicant must provide full, frank and truthful
disclosure of all non-privileged information, records or
other things in its possession, under its control or
available to it, wherever located, that in any manner relate
to the anti-competitive conduct for which leniency is
The Bureau will make a final recommendation for leniency
to the DPP where the applicant fulfills its obligation to
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.
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