In October 2007, the Competition Bureau released its new Information Bulletin on the Communication of Confidential Information Under the Competition Act.
The new bulletin replaces the previous 1995 version and provides practical direction and greater detail as to how the Bureau will treat confidential information which comes into its possession either voluntarily or as a result of its enforcement activities. The new bulletin also takes into account amendments to the legislation since 1995 affecting disclosure of confidential information, e.g., to the Minister of Transport or the Minister of Finance pursuant to reviews of transactions in their areas of responsibility (see sections 29.1 and 29.2 of the Act), and reflects increased enforcement cooperation among international competition authorities which may result in exchanges of information between agencies.
The Commissioner may receive confidential information from parties in a number of ways during investigations under the Competition Act: on a voluntary basis, as a result of the Commissioner’s exercise of formal compulsory information-gathering powers (subpoenas, search warrants), as part of a merger review (pre-merger notification and/or a request for an advance ruling certificate), or as part of a request for a binding written opinion regarding the application of the Act.
The new bulletin reaffirms the general policy that the Bureau will minimize the extent to which confidential information might be communicated to other parties, and clearly indicates that any disclosure will only take place within the limited circumstances set out in the legislation. Furthermore, even in these circumstances, the Bureau will generally only exercise its discretion to communicate protected information when failure to do so would prevent or hinder an inquiry or other matter from being addressed or dealt with under the Act.
The general provisions regarding confidentiality remain unchanged. Section 10(3) of the Act continues to provide that a formal inquiry must be conducted in private and the new Bulletin states that, in practice, this protection is extended to pre-inquiry examinations as well. Section 29 continues to extend broad protection to practically all information obtained on a voluntary or compulsory basis by prohibiting the communication of such information, except in four limited circumstances: (i) when the information is forwarded to a Canadian law enforcement agency; (ii) when the information is communicated for the purposes of administration or enforcement of the Act; (iii) when the information has otherwise been made public; and (iv) when the Bureau has been authorized to communicate the information by the person who provided it.
The first two exceptions, “to a Canadian law enforcement agency” and “for the purposes of the administration or enforcement” of the Act, typically raise the most questions as to how the Bureau will exercise its discretion to disclose. The new bulletin states that communication of information to Canadian law enforcement agencies will generally only occur where a matter is not within the mandate of the Bureau and requires transfer to another Canadian agency, or where the Bureau and another Canadian agency are cooperating in an investigation. In addition to this general exception, the Bulletin notes that sections 29.1 and 29.2 of the Act also provide specific exceptions to allow the Bureau to communicate confidential information to the Minister of Transport and the Minister of Finance for specific reviews by these agencies. However, communication to Canadian law enforcement agencies is rare, and even then the Bureau will only communicate information where it is satisfied that the receiving agency will respect the confidentiality of the information.
Communication “for the purposes of administration and enforcement of the Act” is a broader concept that may involve exchanges of information with a diverse group of entities for different purposes, including: market participants (customers, suppliers and competitors) to elicit further information, various experts hired by the Bureau (including economic, industry or legal experts), foreign law enforcement authorities in order to obtain their assistance or coordinate enforcement action, or courts as the basis for an order for compulsory formal investigative powers or to initiate enforcement proceedings under the Act.
The new Bulletin indicates a number of safeguard limitations to such exchanges: care is taken to minimize the exchange of confidential information to market participants; confidentiality of communications to foreign authorities will be ensured either through formal international cooperation agreements or, unless the Bureau is fully satisfied with the laws protecting confidentiality in the foreign country, through assurances from the foreign authority that the information will be kept confidential and that the use of such information be limited to the specific purposes for which it is provided; and, where necessary to protect against disclosure in formal proceedings before the courts or the Competition Tribunal, measures may include sealing orders, confidentiality orders, confidential schedules to public documents and in camera proceedings as long as these measures would not hinder the administration or enforcement of the Act.
As part of its policy of transparency, the new bulletin indicates that the Bureau will allow affected parties to review draft versions of its “technical backgrounders”, which summarize the Bureau’s analysis of a merger and are intended to provide useful information on how the Act is enforced in particular cases, in order to identify confidential information for removal.
The new bulletin also clarifies the Bureau’s approach to confidentiality under the new Immunity Program. The Bureau will not disclose the identity of an applicant requesting immunity except in limited enumerated circumstances and will treat any information obtained from such person as confidential, and will not disclose it to a foreign law enforcement agency except with the consent of the applicant. Similarly, with respect to the “whistle-blower” provision of the Act (which extends protection to persons who notify the Bureau that another party has committed, or intends to commit a criminal offence under the Act), the new bulletin states that every effort will be made to protect the identity of a whistle-blower.
Finally, the new bulletin also highlights the Bureau’s policy to resist attempts by third parties to gain access to confidential information in its possession, e.g., for a civil action for damages under section 36 or a private action before the Competition Tribunal. If served with a subpoena, the Bureau will inform the information provider and oppose subpoenas for the production of information if compliance with them would potentially interfere with an ongoing examination or inquiry, or otherwise adversely affect the administration or enforcement of the Act. If the opposition is unsuccessful, the Bureau will seek protective court orders to maintain confidentiality of the information in question.