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Bus Law 307 Assignment #1 Price Fixing and Competition Act, 1985

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Introduction This paper reviews the Bureau’s current methods of achieving compliance with the provisions of the Act. Some compliance initiatives, such as the enforcement guidelines and the immunity program, will be presented and analyzed. If consumers and customers have a choice between goods and services of competing firms, prices would be lower, and quality would be better or both. However, an entirely unregulated market does not ensure competition. The most efficient firms will ultimately drive the less efficient firms out of the market. They will then enjoy a monopoly, and there will be no competition, and the benefits of the free market will be lost. When such market imperfection exists or is likely to occur, the government must intervene to preserve competition. (J.E Smyth, 2016) Loblaw case explained it very well, as the company was involved in bread price fixing with their competitors from 14 years and they went against their policies which resulted in abuse of dominant position. The purpose of the Competition Act is to maintain and encourage competition in Canada to promote effeciency. Competition Act, R.S.C., 1985, c. C-34

Competition Act

Competition Bureau

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The competition bureau is an independent law enforcement agency, ensures that Canadian businesses and consumers prosper in a competitive and innovative marketplace. Competition Bureau administers four laws that are, 1.

The Competition Act

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The Consumer Packaging and Labelling Act

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The Textile Labelling Act

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The Precious Metals Marketing Act (Government of Canada, 2015)

Administrative Tribunals Administrative tribunals are an essential part of the legal system in Saskatchewan. In Saskatchewan, administrative tribunals are the boards, commissions, appeal committees and other regulatory bodies created by the government to assist in carrying out decision-making responsibilities. Tribunals make decisions in a wide range of areas that have a significant impact on the public. Several tribunals make several decisions. Some tribunals make decisions about the rights and benefits or resolve disputes between the parties. Some tribunals have a regulatory, administrative or policymaking role. Others hear public complaints and appeals, carry out their decision-making function like courts. (Saskatchewan Ministry of Justice and Attorney General, Ombudsman Saskatchewan, 2009)

Competition Bureau Commissioner The Competition Commissioner heads the Competition Bureau in Canada. The current commissioner of competition is Mathew Boswell. Under the Competition Act, the Commissioner can launch inquiries, challenge civil and merger matters before the Competition Tribunal, make recommendations on

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criminal issues to the Public Prosecution Service of Canada, and intervene as a competition advocate before federal and provincial bodies. [ CITATION Opp18 \l 4105 ]

The mandate of the Competition Bureau The Competition Bureau's legislated mandate is to help the Canadian marketplace to be more competitive and innovative for the benefit of Canadian businesses and consumers. (Government of Canada, 2015-2018 Strategic Vision, 2015) It delivers mandate in two ways: 1.

Competition Enforcement- The Bureau take appropriate action when it uncovers evidence of a contravention of the legislation it administers.

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Competition Promotion- The Bureau promotes competition-enhancing policies and practices by advocating before all levels of government, private sector.

Mission statement To promote and protect competition, the Bureau administers and enforces their legislation with fairness and predictability, to prevent and deter anti-competitive behavior and deceptive marketing practices, review mergers and seek to ensure they do not harm competition, empower consumers and businesses. (Government of Canada, 2015-2018 Strategic Vision, n.d)

Core Values of Competition Bureau 1. Openness and Transparency – Competition Bureau effectively communicates with consumers and businesses. 2. Collaboration- Competition bureau works with their partners to advance and promote a marketplace that is functioning efficiently.

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3. Integrity and Fairness- They act with integrity and justice to enforce and administer competition act and labeling statutes. Their decisions based on facts, evidence and sound judgment. 4. Respect- They interact honestly and respectfully with their colleagues, partners, and all Canadians recognizing their diversity and their contributions to healthy competition 5.

Leadership- They show direction through their actions, strategic approach, and commitment to continuous innovation.[CITATION Comnd \l 4105 ]

Role of Competition Commissioner The commissioner of competition bureau is responsible for the administration and enforcement of the competition act and three labeling statutes, the Consumer Packaging and Labelling Act, the Precious Metals Marking Act and the Textile Labelling Act. The Competition Bureau, led by the Commissioner, investigates anti-competitive business conduct, promotes compliance with the law and advocates for the role of competition in policy-making, and employs over 400 people in the National Capital Region and its regional offices. The Commissioner reports to Parliament through the Minister of Innovation, Science and Economic Development.[ CITATION Opp18 \l 4105 ]

Competition Bureau Website 1.

A brief description of what is the competition bureau and their responsibilities.

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Some latest news and the issues that are still going on.

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They demonstrated what services and information they provide like preventing fraud, publications, technical guidance for customers to find answers to their questions, legal actions show what legal action a person can take under which act.

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They also provide a link for resources for customers so they can reach consultants easily. Moreover, they also showed tools to learn about anti-competitive conduct, like CA identification number, labeling statutes, as well as their fees and service standards.

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Then they have shown companies performance over the years. At last, they provided contact information of various centers like information center, media relations, questions form, complaint form.

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In the end, with the picture of Matthew Boswell, they have given the corporate information like the mandate, their business structure, transparency, and job opportunities.

http://www.competitionbureau.gc.ca/eic/site/cb-bc.nsf/eng/home

Public Complaint Process On the left side of the website, it shows the contact box for the complaints. Then, the Competition Bureau of Canada asks to verify if the company or consumer has contravened any of the act. Then customers can verify the issues in which the competition bureau deals or does not deal.

In the end, it asks to fill form where it requires companies or individual information, details of the complaint and confirms if the person filling form is a victim. Then it asks about the amount that is directly related to product, service, and issue. At last, it asks for the other attachment the user want to submit and then finally the user can apply. [ CITATION Com18 \l 4105 ] Agreements between competitors to fix prices, to allocate customers or geographic markets, or to restrict production of a product by setting quotas among competitors or other means are considered to be “hardcore” cartel activities with no social redeeming features Competition Act, Provision 45, 46 and 48

Price Fixing

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Price fixing violates state and federal competition laws, which prohibits business collusion. Price fixing violates competition law because it controls the market price or the supply and demand for goods and services. This medium prohibits other businesses from being able to compete against the businesses in the price-fixing agreement, which prevents the public from being able to expect the benefits of free competition. Even if there is evidence that competitors have appeared to agree on a price, this can lead to collusion charge. Price fixing can be prosecuted federally as a criminal violation under the Sherman Antitrust Act or a civil violation under the Federal Trade Commission. Price fixing can also be prosecuted under the state antitrust laws. (Business Law, What is price fixing? n.d.)

Investigation Process 1.

Information Intake – In the first step, the bureau investigates as the result of information it obtains about the marketplace practices that may be anti-competitive and contrary to Canada’s competition law.

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Examination – Bureau examines all the information received to determine whether it points to

any concern under the competition act and assess whether further investigations are appropriate. 3.

Investigation- Bureau gather evidence by conducting interviews, executing search warrants,

seeking orders for the productions of business record and for obtaining the testimony of relevant individuals and seeking court orders for wiretapping. 4. Referral and Prosecution- When sufficient evidence of an offense is secured, the commissioner refers the case to the Prosecution Service of Canada who reviews the case and decides if a prosecution should be initiate. [ CITATION Govnd1 \l 4105 ]

To resolve competition issues, bureau officers have some tools available. These tools are outlined in the Bureau’s conformity continuum and include:

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public education, written opinions, information contacts, voluntary codes of conduct, written undertakings and prohibition orders;

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the legal authority with court authorization to search for and seize documents and other forms of evidence, to take sworn oral evidence and to demand the production of documents and records;

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the ability to refer criminal matters to the Attorney General of Canada, who then decides whether to prosecute before the courts;

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the power to bring civil matters before the Competition Tribunal or other courts depending on the issue;

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the authority to make presentations and intervene on matters of competition policy before federal and provincial boards, tribunals and commissions such as the Canadian Radiotelevision and Telecommunications Commission and the National Transportation Agency. [ CITATION Govnd2 \l 4105 ]

Immunity Program

The Bureau's Immunity Program often plays a crucial role in assisting the Bureau to uncover, investigate and prosecute criminal offenses under the Competition Act. Under the bureau’s immunity and leniency program, the first to come forward can receive immunity from prosecution. After that, others who agree to entirely corporate and plead guilty in court can receive reduced fines and sentencing. Loblaw secured immunity from prosecution by coming forward to co-operate. Immunity allowed the bureau to launch an investigation and gather more information about others who may have 8

involved. Without these immunity and leniency programs, many cartels would be undetected to the detriment of all Canadians. Loblaw still faces potential exposure as a result of class-action lawsuits allowed the competition act.[ CITATION Joh18 \l 4105 ]

Penalties of Price Fixing Penalties for price-fixing include fines up to $25 million, imprisonment to a maximum term of fourteen years, or both. Courts also can impose orders to prevent the parties to a conspiracy from continuing or repeating the offense.[ CITATION Pri18 \l 4105 ]

Loblaw Bread Price-Fixing Case In bread price-fixing case, Loblaw initially stated that it participated in a criminal price-fixing scheme with its competitors for over 14 years and for receiving immunity Loblaw came forward to co-operate. After the procedural investigation under the competition act, competition bureau found that Loblaw’s retailer George Weston and the parent company of grocery chain Loblaw which directly boosted bread prices before meeting with the retailers to get them to accept the prices. The grocers that were involved include Loblaw Companies Ltd., Walmart Canada Corp., Sobeys Inc., Metro Inc., Giant Tiger Stores Ltd. These companies fixed the date and boost up price range. After the declaration of Loblaw, competition bureau searched every grocery company and interviewed every CEO who were involved in this cartel[ CITATION The17 \l 4105 ] Update on Loblaw Price Fixing Loblaws $25 gift card offered as the compensation for the retailer’s admitted part in a bread price-fixing scandal. In 2018, many Canadians reported they are satisfied with their gift of free groceries. However, the end of the program does not mark the end of the retailer’s troubles as Loblaws still faces multiple proposed class action lawsuits targeting the retailer and alleged co-conspirators in the scandal. Loblaws

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is the only one to admit to any wrongdoing and received immunity from prosecution for co-operating with the Bureau’s investigation. Meanwhile, Canada’s Competition Bureau continues its investigation into the same companies for alleged bread price-fixing. Conclusion Legislative framework and anti-competitive behavior need to be strictly followed by all the businesses which is good for economy. Any violation of these act can result as a criminal or non-criminal activity. The purpose of this framework and punishment is to make guidelines for businesses so they can follow it easily and there will be fair competition among businesses which will be profitable for every business. Loblaw’s case stood as a great example of price fixing as they did not follow their company’s policy and moreover the competition bureau policies.

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References 1. Bureau, C. (n.d). 2015-2018 Strategic Vision. Retrieved from Government of Canada: https://www.competitionbureau.gc.ca/eic/site/cb-bc.nsf/eng/03934.html 2. Canada, G. o. (n.d). Price Fixing. Retrieved from http://www.competitionbureau.gc.ca/eic/site/cb-bc.nsf/eng/h_00112.html?Open 3. Canada, G. o. (n.d.). Criminal investigation basic purpose. Retrieved from Criminal investigation basic purpose: http://www.competitionbureau.gc.ca/eic/site/cbbc.nsf/eng/02443.html 4. Canada, G. o. (n.d.). Filling a complaint. Retrieved from Competition Bureau: http://www.competitionbureau.gc.ca/eic/site/cb-bc.nsf/eng/02930.html 5. The government of Canada. (2015). Retrieved from The Competition Bureau: http://www.competitionbureau.gc.ca/eic/site/cb-bc.nsf/eng/03336.html 6. J.E Smyth, D. S. (2016). The Law and Business Administration in Canada. Toronto: Pearson. 7. Law, B. (n.d.). What is price fixing? Retrieved from Business Law: https://businesslaw.freeadvice.com/business-law/trade_regulation/price_fixing.htm 8. Ombudsman. (2009). Practice essential for administrative tribunals. Saskatchewan: Saskatchewan Ministry Justice and Attorney General. 9. Opportunities - Selection Process. (2018, June 01). Retrieved from Government of Canada: https://appointments.gc.ca/slctnPrcs.asp? menu=1&lang=eng&SelectionProcessId=122BE692-F160-4367-A0FF-4E9D9759615F 10. Pacman, J. (2018, February 2). Competition Bureau: What Canadians need to know about price-fixing probes. Retrieved from The Globe and Mail:

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https://www.theglobeandmail.com/report-on-business/rob-commentary/competitionbureau-what-canadians-need-to-know-about-price-fixing-probes/article37830190/ 11. Price fixing. (2018, February 22). Retrieved from Government of Canada: http://www.competitionbureau.gc.ca/eic/site/cb-bc.nsf/eng/h_00112.html?Open

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