Taking punishment to the Max?: Individual liability for competition offences post-Maxzone

Introduction We have long been told that money cannot buy happiness. Now, it seems, money also cannot buy freedom - at least not freedom from jail for cartelists in Canada. Traditionally, criminal convictions or plea agreements for Canadian competition offences have involved monetary fines and, for individuals, house arrest or conditional sentences instead of actual jail time. However, both enforcement efforts and penalties sought for competition offences against individuals may be on the rise in Canada as a result of a deliberate strategy on the part of the Competition Bureau (the "Bureau") to eradicate these harmful practices. Canada's Federal Court also recently touted the benefits of jail time as a deterrent for competition offences and compared price fixing agreements and other "hard core" cartel agreements to fraud and theft. These "tough on (competition) crime" attitudes mirror those expressed by enforcers south of the border: individuals in the United States are also facing more jail time for cartel offences.

This article explores the principles of individual liability for competition offences in Canada in Section 1. Section 2 discusses the recent focus on enforcement against individuals, including the push for jail time. Section 3 explains the impact of the Safe Streets and Communities Act (SSCA), and Section 4 discusses the Bureau's Immunity and Leniency Programs.

General Principles of Individual Liability Individual liability exists for many offences under Canada's Competition Act (the 'Act'). The most widely publicized and enforced of these are cartel offences under section 45, and bid-rigging offences under section 47.

Cartel Offences Section 45 of the Act makes it an offence to conspire, agree or arrange with a competitor to fix, maintain, increase or control the price for the supply of a product; to allocate sales territories, customers, or markets for the production or supply of a product; or to fix, maintain, control, prevent, lessen or eliminate the production or supply of a product. The maximum penalty for these crimes is among the highest in the world: imprisonment for up to fourteen years and/or a fine of up to CA$25 million.

The Commissioner of Competition, John Pecman, stated in 2015 that the Bureau will vigorously enforce these provisions, including against individuals, and will prioritize cracking down on cartels. He has also quoted the US Supreme Court in stating that cartels are the "the supreme evil of antitrust".

Bid Rigging Offences Section 47 of the Act prohibits bidders, in response to a call for bids or tenders, from agreeing to not submit a bid or to submit a bid that is the product of an agreement, when such an agreement is not disclosed to the person calling for the bids. It is an indictable offence for which the sentence is a fine, in an amount at the court's discretion and/or imprisonment for up to 14 years. Collusion in the bidding process, the decision to not submit bids, bid rotation, and bid sharing among bidders rank among the most widespread forms of bid-rigging.

Other Competition Act Offences/Reviewable Conduct Individuals also face liability under other sections of the Act, as well as under...