John Pecman, the recently appointed Commissioner of Canada’s Competition Bureau, has announced a new Criminal Cartel Whistleblowing Initiative to encourage members of the public to provide information to the Competition Bureau about possible violations of sections 45 to 49 of the Competition Act. These provisions criminalise a wide range of cartel conduct including price fixing, allocation of markets, restricting outputs and bid rigging.
The new programme is in addition to the general protection for whistleblowers already provided for in Canadian legislation, and demonstrates the Competition Bureau’s increasing focus on tackling violations of the criminal cartel offence. The Competition Act provides that any person who has reasonable grounds to believe that a person has committed (or intends to commit) an offence under the Act and notifies the Commission as such may request that their identity be kept confidential, and also prohibits employers from taking action against whistleblowers who act in good faith and on the basis of reasonable belief. Canada’s Criminal Code provides a wider protection for anyone who provides information to law enforcement officers with respect to any kind of offence committed by someone in their organisation.
The details of the Criminal Cartel Whistleblowing Initiative show a high degree of protection for the identity of individuals who come forward, with an assurance that any information used to enforce the offence will not reveal the Whistleblower’s identity and a guarantee that while individuals may be asked to testify in court they will not be required to do so.
The Competition Bureau already has immunity and leniency programmes in place to encourage self-reporting, and Pecman said that the new initiative was designed to “support increased reporting of anti-competitive behaviour, while ensuring the protection of individuals who come forward with such information.”
Chile-based LATAM Airlines has been fined C$975,000 by the Ontario Superior Court of Justice after pleading guilty on 20 August 2013 to participating in an air cargo price-fixing cartel from March 17 2003 until February 14 2006.
LATAM stated it had “… cooperated closely with Canadian authorities throughout the investigation process” It is the ninth party to be convicted as part of a Canadian investigation into cargo price-fixing.
“The Bureau’s investigation into the alleged conduct of other air cargo carriers continues.” the Canadian Competition Bureau said in its statement. To date, the Bureau’s investigation into the fixing of fuel and other surcharges has secured more than CA$25 million in fines. Previously, Air France, KLM, Martinair, Qantas, British Airways, Cargolux, Korean Air and Cathay Pacific have also pleaded guilty to fixing one or more air cargo surcharges for shipments on particular routes to and from Canada.
On 16 August 2013, Canada’s Competition Bureau announced the sentences for three individuals found guilty in March for conspiring to fix the price of petrol at the pump. The Bureau’s investigation into price-fixing of retail petrol in certain local markets in the province of Quebec was first made public in 2008. The three individuals were charged on 15 July 2010 and found guilty on 22 March 2013 after a two month trial before the Quebec Superior Court.
Yves Gosselin, an Irving employee, Michel Lagrandeur, an independent dealer under the Shell banner, and Linda Proulx an independent dealer under the Petro-Canada banner have each been ordered to pay CAD15,000. They have not been given custodial sentences. Another guilty verdict was entered on 9 August 2013 against Les Pétroles Global Inc. after a two week trial. The Ontario based company has yet to be sentenced by the court, but the Bureau has indicated that it will be looking for a fine of up to CAD10 million.
The latest verdicts take the total charged in the investigation to 39 individuals and 15 companies. 33 individuals and seven companies have either pleaded or been found guilty. Six people have been given terms of imprisonment totalling 54 months and fines of more than CAD3 million have been imposed. Several defendants have been ordered to make donations to charity rather than going to prison or paying a fine to government.
It is alleged that most of the gas retailers in the Sherbrooke, Magog, Victoriaville and Thetford Mines communities of Quebec participated in the cartel between 2004 and 2006. Charges were filed under the Competition Act after investigators with wiretaps leaned that gas retailers agreed through telephone calls the prices they would charge motorists at the pumps.
While most of the companies and individuals charged are associated with major oil companies including Royal Dutch Shell PLC, Petro-Canada, Irving Oil Corp. and Esso, the Bureau has stressed that the cartel was limited to the four markets in Quebec and that local operators were responsible for the price manipulation.
Japan’s Yazaki Corporation, the world’s 13th largest global auto parts supplier, has been has fined C$30 million in Canada. The investigation by the Canadian Competition Bureau into the auto parts industry is the largest ever undertaken by Canadian authorities and this fine is the largest ever ordered by a Canadian Court.
This record fine by the Canadian authorities dwarfs a fine of $470m imposed against Yazaki in March last year by the US Department of Justice following a guilty plea to cartel conduct over a ten year period.
The Canadian fine was reduced as a consequence of Yazaki participating in the Bureau’s Leniency Program and providing substantial assistance to the Bureau and the Public Prosecution Service of Canada.