In her final days as commissioner of competition, Melanie Aitken has launched a significant action, laying criminal charges over an alleged breach of a merger-related consent order. The approach is unusual, as breaches of consent orders are often dealt with in civil contempt proceedings before the Competition Tribunal.

On September 11 2012 the Competition Bureau announced that it had laid criminal charges under Section 66 of the Competition Act against Progressive Waste Solutions Ltd and its subsidiary BFI Canada Inc for "multiple breaches" of a June 2010 consent agreement with the bureau. The agreement resulted from the 2010 merger of IESI-BFC Ltd and Waste Services Inc - now known collectively as Progressive - and was intended to remedy concerns about a substantial lessening or prevention of competition in four cities and one county. Under the terms of the agreement, the parties were:

  • required to divest certain assets and customer contracts; and
  • prohibited from soliciting or reacquiring divested customers for a period of one year.

If the parties became aware of a material breach of the agreement, they were to notify the bureau promptly.

The bureau alleges that Progressive:

  • solicited and reacquired a divested customer;
  • provided a false declaration of compliance with the consent agreement; and
  • failed to provide prompt notification of the breach.

If convicted on a summary basis, Progressive could face fines of up to C$25,000 on each count. Progressive has denied the allegations and representatives have claimed that the company will vigorously defend the matter.

Regardless of the outcome of the dispute, this case highlights the importance of ensuring that mechanisms are in place within a company that is the subject of a consent agreement, in order to manage any compliance obligations and identify and address potential problems. The case is also noteworthy for the bureau's aggressive response to the alleged failure to abide by the consent agreement. A non-criminal route is available to penalise failure to follow a consent agreement; however, the commissioner, in choosing the criminal route, intended to send "a strong signal to business that breaching a consent agreement… is an extremely serious matter and will not be tolerated".

For further information on this topic please contact Kevin Ackhurst at Norton Rose Canada LLP by telephone (+1 416 216 4000), fax (+1 416 216 3930) or email (kevin.ackhurst@nortonrose.com).

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