Originally published in Blakes Bulletin on Competition,
Antitrust & Foreign Investment, March 2010
As previously reported in our January 2010 Blakes Bulletin on Competition, Antitrust & Foreign
Investment, (http://tinyurl.com/ye9yj52) the 2009
Competition Act amendments governing collaborations
between competitors came into force today, March 12, 2010. The
following provides key points to remember regarding the differences
between the former and current criminal provisions, the distinction
between criminal and civil review of competitor agreements, and the
Competition Bureau's enforcement policy as outlined in its Competitor Collaboration Guidelines
(http://tinyurl.com/yac4y8f) issued in December 2009.
SECTION 45 (CRIMINAL CONSPIRACIES)
Former Conspiracy Offence
Prohibited only those conspiracies or agreements
"unduly" restricting competition.
C$10-million maximum fine (per count) for corporations and
individuals, up to five years in prison, and private actions for
"Unduly" element required government to prove beyond
a reasonable doubt the anticompetitive effects of any agreement,
even if hard-core cartel conduct. Effects element was out of step
with the U.S. and other major jurisdictions.
New Conspiracy Offence
Prohibits only the most egregious cartel behaviour including
price fixing, allocation of sales, territories, customers or
markets and fixing production or supply, however, it imposes a
per se ban rather than requiring the government to prove
beyond a reasonable doubt the anticompetitive economic effects of
Fines for corporations and individuals are increased to up to
C$25-million (per count); the potential prison term is increased to
up to 14 years.
The new rule is both narrower (in that it only covers hard-core
cartel agreements between competitors) and broader (in that covered
agreements constitute criminal conduct regardless of whether they
result in anticompetitive effects).
Courts may still infer the existence of a conspiracy or
agreement from circumstantial evidence, with or without direct
evidence of communication between or among the parties.
Premature Merger Integration/Gun Jumping: whether pre-merger
co-ordination and information exchange could be prosecuted
criminally is not specifically addressed in the statute or the
Guidelines. Because the Guidelines represent that the Bureau
considers merger-related non-compete clauses in the context of the
overall competitive effects of a merger rather than an agreement
among competitors, it is unlikely that parties could face criminal
exposure through imprudent merger co-ordination.
Defendants have complete defence if they can prove, on the
balance of probabilities, the challenged agreement is
"ancillary" to another otherwise lawful agreement and
"reasonably necessary" for implementing the lawful
The new provision continues to recognize other exemptions to the
scope of the criminal conspiracy offence, including exemptions for
agreements between affiliates, certain export agreements and
SECTION 90.1 (CIVIL REVIEW OF AGREEMENTS IN RESTRAINT OF
Competitor collaborations can also be addressed by a new civil
provision that includes a competitive effects test and the
availability of an efficiencies defence.
Vertical supplier/distributor and franchisor/franchisee
agreements are not subject to civil review so long as they do not
involve agreements between "competitors".
Dual distribution restrictions between suppliers and
distributors are subject to civil review when the supplier is also
a competitor of its distributor in the distribution market.
Only the Commissioner of Competition can bring enforcement
proceedings before the Competition Tribunal. The Bureau can only
seek remedial cease-and-desist orders (not fines or imprisonment).
Private enforcement and damage awards not permitted.
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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