On September 25, 2013, the Canadian Competition Bureau released updated FAQs for its Immunity and Leniency Programs. These two programs, which offer whistleblowers immunity from prosecution and lenient treatment on sentencing, are cornerstones of the Bureau’s cartel investigation program and attract many applicants every year. The updated FAQs (the first since 2010) describe significant procedural and substantive changes to participation in the two Programs. Canadian and international counsel (and their clients) will want to note the following major changes:
- Must an applicant have direct or indirect sales in Canada: Responding to the often global nature of cartels, the Bureau has clarified that an applicant may seek an immunity or leniency marker even if it does not sell products either directly or indirectly in Canada. The relevant question is not whether the applicant has Canadian sales but whether the party has committed an offence in Canada. The FAQs note that market allocation agreements and bid-rigging do not require an applicant to have sold product in Canada, but are nevertheless offences in Canada.
- What happens when the Bureau discontinues its investigation: If the Bureau does not intend to pursue its investigation, it will confirm (in writing if the applicant desires) the scope of the immunity or leniency recommendation it would have made had it continued the investigation. If the Bureau resumes its investigation, it will recommend that the applicant receive immunity or leniency as previously indicated. This change should please counsel and their clients who often fear losing their place in the immunity/leniency line if the Bureau discontinues its investigation only to restart it later on the basis of new information.
- What must the applicant do to maintain its marker during the proffer process: The Bureau now expects that applicants will proactively ask for marker extensions to the 30-day proffer period. If it does not request an extension, the applicants’ marker will automatically lapse without any positive obligation on the Bureau to notify the applicant. Counsel must pay particular attention to this change as they have often taken for granted that, once granted, the marker would not lapse and would only be revoked in the rarest of circumstances.
- How document production occurs: The Bureau now expects counsel to coordinate production of relevant documents in advance with a Bureau officer and to produce documents in electronic format. So-called “document dumps” are not permitted. The Bureau also expects professional translations if documents are not in either English or French.
- Discount for Immunity Plus: The Bureau has quantified the Immunity Plus discount at between 5-10%, to be added to the applicants leniency discount.
- Fine Calculation (Leniency only): The Bureau has confirmed that participants in market allocation and bid-rigging offences may face penalties even if they had no sales in Canada (although presumably their co-conspirator(s) did).
The updated FAQs include many other changes. Although some appear striking at first glance, many of them simply formalize the Bureau’s existing practice. With these practices now in writing, counsel and their clients have greater certainty when participating in these two Programs. In this regard, the updated FAQs are a welcome part of the Bureau’s increasing transparency.