In 2016, the Commissioner of Competition (the Commissioner) pursued another year of aggressive criminal enforcement in Canada. The Cartels Directorate secured a total of approximately C$13.4 million in fines for cartel and bid-rigging offences, in contrast to the relatively modest C$2.9 million in fines that were secured in 2015. The Commissioner was successful in obtaining an appellate decision that upheld convictions in the retail gasoline case, and he also secured the second-largest fine ever for a bid-rigging offence in Canada as part of his ongoing auto parts investigation. In addition to these successes before the courts, the Commissioner deepened his commitment to cross-border cooperation with the U.S. Department of Justice through a coordinated investigation that resulted in a significant fine against Nishikawa Rubber in the U.S. Finally, the Commissioner demonstrated his leadership role in the global network of competition enforcers by announcing that the Competition Bureau (the Bureau) will host the International Competition Network's Cartel Workshop in Ottawa in 2017.
To some observers, the Commissioner's enforcement efforts appeared to be focused on re-establishing his enforcement credentials following a difficult and challenging year before the courts in 2015. In 2015, despite the investment of enormous investigative resources, the Commissioner was unable to obtain a conviction in two high-profile criminal cases. In R. v. Durward, following a 10-year investigation by the Cartels Directorate and an eight-month trial in connection with allegations of bid-rigging in the technology services sector, the jury returned a verdict of acquittal on all charges. In R. v. Nestlé, following an eight-year investigation in respect of an alleged price-fixing conspiracy in the chocolate business, the Crown unilaterally stayed all of the remaining charges. In both high-profile cases, the Cartels Directorate had conducted the underlying investigation and had recommended both cases for prosecution, but the Crown was unable to obtain any conviction in either case.
On the face of his enforcement record in 2016, the Commissioner appears to have achieved part of that goal. However, the Commissioner did not announce any new significant investigations involving domestic or foreign cartel activity, and the high level of fines collected in 2016 was largely attributable to one single bid-rigging plea in the auto parts case. Moreover, based on his reported enforcement data, the Commissioner experienced a gradual decline in the number of requests for immunity and leniency markers, and he did not report any whistleblower contacts in 2016. While there is no concrete data on this point, some have speculated that the incentives to self-report potential criminal conduct have diminished given the outcome of the R. v. Durward and R. v. Nestlé cases – particularly in light of the Crown's aggressive posture and compulsive production orders directed at the Bureau's own immunity applicant. And while the Commissioner announced an intention to review his immunity and leniency programs in light of the outcome of these cases, no consultation process has been initiated since the Commissioner publicly announced his intention to conduct a review in December 2015.
In our annual report on antitrust criminal enforcement in Canada, we examine these key developments as part of our survey of the leading investigations by the Commissioner and prosecutions by the Public Prosecution Service of Canada (PPSC). We also discuss the leading judicial decisions from 2016, and consider their implications for domestic and international price-fixing investigations. In addition, we review the Commissioner's latest public statements relating to criminal enforcement of the Competition Act, and highlight a number of areas where we can expect developments in 2017.
To view the full report please click here.
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