On October 10, 2007, the Competition Bureau released a revised information bulletin outlining its Immunity Program, thus replacing its initial immunity bulletin issued in September 2000. The revised Immunity Program was complemented by a backgrounder explaining the changes, a revised Frequently Asked Questions (FAQs) and new immunity agreement templates.
The new bulletin simplifies the process and clarifies the prerequisites for a grant of immunity from criminal prosecution for competition-related offences under the Competition Act to those individuals or organizations that are the first to report an offence (or who can provide additional evidence to support charges during an ongoing investigation). The most prominent use of immunity to date has been in cases involving price fixing and market allocation cartel activity among competitors.
A significant procedural simplification is the move to a one-step grant of immunity in line with other major antitrust jurisdictions. The previous two-step process, which involved a provisional grant of immunity (PGI) with continued cooperation required from the applicant before the grant of final immunity, was out of step with other major antitrust jurisdictions. The new process involves a single grant of immunity which remains conditional upon full cooperation by the applicant. The new process reflects actual Bureau practice and is more easily understood by non-Canadian firms applying for immunity. More practical guidance is also generally provided in terms of the application process, for example, in terms of information expected from the applicant.
There are several substantive changes to the Program. A significant change is that disqualification from immunity is now based on whether an applicant took steps to coerce others to join the illegal activity. This “coercion test” replaces the old disqualifications based on whether a party was an “instigator” or “leader” or the “sole beneficiary” of the illegal activity. The requirement for “restitution” has also been dropped, as the Bureau now considers civil actions as the best means for victims of illegal activity to seek compensation. The new bulletin also clarifies the Bureau’s confidentiality protections which it will extend to applicants, noting that the identity of an applicant will generally be protected but may be disclosed in certain circumstances, such as where necessary to obtain or maintain the validity of judicial authorizations including search warrants or production orders for documents.
The bulletin further confirms that, while the Bureau will not pursue a formal U.S.-style “penalty plus” approach (whereby an applicant who fails to disclose all of its illegal activities may be penalized more harshly for the undisclosed activities once they are uncovered), the Bureau will nevertheless adopt a strict approach if there is intentional non-disclosure of any competition offences by an applicant, including possibly revoking immunity and recommending increased penalties for the undisclosed offences.
The Bureau will also use the concept of “immunity plus”, where an applicant who may not be the first to disclose information about Offence A, and therefore does not qualify for immunity for that offence, does disclose Offence B for which it receives immunity as well as the “plus” of an improved sentencing recommendation for Offence A. The bulletin also clarifies that revocation of immunity will generally only occur in the event of intentional non-cooperation by an applicant, and will allow a party to address any shortfalls in its conduct.
Finally, the Bureau is considering a formal leniency program as was proposed during the 2006 consultations for parties that do not qualify for immunity but who wish to cooperate early in an investigation.
In sum, the new Immunity Program provides practical clarifications and improvements that make the process more transparent and more reflective of immunity programs in other jurisdictions.