The Competition Bureau (Bureau) announced yesterday that the Public Prosecution Service of Canada (PPSC) has entered a stay of proceedings against 4 key targets, in one of the Bureau’s most labour-intensive, criminal investigations to date. Indeed, following the Bureau’s 6-year investigation of alleged price-fixing in the chocolate confectionary industry, criminal proceedings against ITWAL Ltd., Mars Canada Inc., ITWAL chair David Glenn Stevens, and one other party have been suspended. The Bureau noted, however, that the PPSC intends to continue in its prosecutorial efforts against two other parties.
On June 6, 2013, the Bureau laid charges against 3 companies and 3 individuals for their alleged role in a price-fixing conspiracy, contrary to section 45 of the Competition Act (the “Act”). Section 45 contains the Act’s criminal conspiracy provisions, making it illegal for two or more competitors to enter into agreements or arrangements to fix prices, allocate sales or markets, and restrict or control the supply of a product.
Later that month, on June 21st, Hershey Canada pleaded guilty to a charge under section 45 of the Act and was sentenced to pay a fine of $4 million. The expediency of Hershey Canada’s sentence is owing to its cooperation in the Bureau’s investigation. Under the Bureau’s Leniency Program, parties are entitled to seek lenient treatment, such as a reduced fine, in exchange for their timely co-operation. Such cooperation usually includes divulging the nature and extent of the alleged conspiracy, including the names and conduct of the party’s co-conspirators. Commissioner of Competition John Pecman has said that the cooperation of “organizations and individuals [in the Bureau’s Immunity and Leniency Programs] is one of the best weapons to bring to light illegal agreements between competitors, which are secretive in nature and very difficult to detect.”
A stay of proceedings may be entered by the PPSC for any number of reasons, including in cases of lost or destroyed evidence where the accused cannot be granted his or her constitutional right to make full answer and defence at trial, or when the accused was not tried within a reasonable period of time. It is unclear why, in this case, 4 of the 6 accused parties were granted a stay.
Criminal litigation under the Competition Act is often protracted. Accordingly, only time will tell what fate lies before the remaining parties accused of fixing the price of chocolate confectionary.