Introduction

On October 10, 2007, the Canadian Competition Bureau released its revised Information Bulletin on the Immunity Program under the Competition Act. This Bulletin updates the Bureau's 2000 policy respecting immunity under the Competition Act. It makes a number of significant changes to the Bureau's pre-existing policy, including:

  • Eliminating the interim step of a Preliminary Grant of Immunity.
  • Not automatically extending immunity to all past officers, directors or employees.
  • Eliminating the requirement of restitution.
  • Not disqualifying for immunity those who "instigated" the conduct.

This brief provides an overview of the new Immunity Policy, but the full policy is accessible on the Bureau's website at http://www.competitionbureau.gc.ca.

Like the predecessor policy, the goal of the updated Immunity Program is to assist the Bureau in bringing to light anticompetitive activity – most frequently cartels – by granting incentives to participants to assist the government in prosecuting others. Like most antitrust immunity programs around the world, it works on the basis of providing incentives to be "first in" to bring improper conduct to the attention of the authorities.

Requirements for Immunity

To obtain full immunity (that is, no criminal conviction or penalty) the immunity applicant must:

  1. Be the first to approach the Bureau with information with respect to the offence, and that the Bureau either be previously unaware of the offence or not in possession of sufficient evidence for a referral of the matter to the Director of Public Prosecutions for prosecution
  2. Terminate its participation in the illegal activity.
  3. Not have coerced others to become a party to the illegal activity.
  4. Not be the only one involved in the conduct. That is, one cannot get immunity for reporting an offence committed only by the reporting party.
  5. Provide complete, timely and ongoing cooperation in the Bureau's investigation and prosecution of others.
  6. Reveal all illegal Competition Act conduct it has engaged in.
  7. Not publicly reveal an application for immunity without the consent of the Bureau, unless required by law.
  8. Do everything it reasonably can to obtain the cooperation of employees, officers and directors, at its own expense.

How Does the Current Policy Vary From the Bureau's Pre-existing Immunity Policy?

  • As the above points illustrate, the new Immunity Policy is similar in key respects to the pre-existing policy. However, there are a number of significant differences, including the following items: The previous policy denied immunity to those who "instigated" the conduct, whereas the current policy only denies immunity to those who "coerced" others into the conduct. This change is consistent with the approach favoured internationally, and recognizes the difficulty in determining, after the fact, who was the instigator.
  • The previous policy required, on its face, that the applicant be willing to make restitution to those injured, whereas the current policy is silent on that point, leaving restitution to civil claims under the Competition Act.
  • The new Immunity Policy requires applicants to reveal any Competition Act offence they may have committed, whereas the previous policy purported to require applicants to reveal any offence, whether under the Competition Act or otherwise. This requirement proved to be unworkably broad.
  • The current policy denies immunity if the applicant is the only firm to have committed the offence. The predecessor policy denied immunity if the applicant was the only firm to have benefited by the commission of the offence within Canada. That phrase was, at least in some cases, vague and difficult to apply, and may have unfairly penalized Canadian participants in international cartels.
  • While current officers, employees and directors who admit their involvement and cooperate will, as with the predecessor policy, be eligible for immunity, former directors, officers and employees will only qualify for immunity on a case by case basis. This is a departure from the previous policy. Similarly, agents may also qualify for immunity on a case by case basis.

Difference in Process Between the Previous Immunity Policy and the New Immunity Policy

The key difference in the formal process between the prior Immunity Policy and the new policy is that the process to obtain immunity is simplified. The predecessor policy involved granting of a marker by the Competition Bureau, followed by a preliminary grant of immunity (PGI) by the Department of Justice (now the Director of Public Prosecutions) and finally a full grant of immunity. The new policy has eliminated the interim preliminary grant of immunity process, recognizing that the grant of immunity is always subject to a requirement of ongoing cooperation by the immunity applicant and can be revoked if the applicant fails to meet the criteria for the Immunity Policy or fails to continue to cooperate. The preliminary grant of immunity was found to be a redundant step in the process.

What is Unchanged From the Previous Process?

Most of the basic elements of the immunity process are, if not identical to, at least consistent with the prior Immunity Program, starting with the fundamental requirement to be the first to reach the Bureau.

As before, seeking immunity from other international antitrust authorities does not provide any immunity or marker with respect to the Canadian situation.

As with the previous policy, to obtain a "marker", which establishes one's place in line for immunity, one must contact the Senior Deputy Commissioner of Competition for Criminal Matters (or, in the appropriate case, Fair Business Practices). They will provide a marker on a hypothetical basis. Then the applicant will proceed with a proffer detailing the illegal activity, again typically on a hypothetical basis.

The need to admit, fully and frankly, the wrongdoing involved and the need to reveal any other Competition Act offences, and the need to cooperate fully with the authorities, remains.

The process may be (and usually is) pursued on a "paperless" basis with the Competition Bureau and Director of Public Prosecutions.

Future Developments – Leniency

The Competition Bureau has announced that it anticipates releasing a further policy on Competition Act leniency within the next few months. Leniency affects those firms which do not qualify for full immunity, but which may be second or third to report unlawful conduct and agree to cooperate. By so doing, they seek to earn some leniency from the penalties they would otherwise face. The Bureau/Director of Public Prosecutions have typically offered leniency to such firms in the past, but without a formal policy addressing process there was considerable uncertainty.