Antitrust commentators are questioning the continuing significance of immunity and leniency programs that have been at the forefront of anti-cartel enforcement internationally since the U.S. Department of Justice introduced the first leniency program in the early 1990s. Amid evidence of declining applications for leniency, some are asking whether a turning point in criminal antitrust enforcement has been reached, requiring adapted investigatory tools and approaches, or whether this is simply a temporary lull that will soon be forgotten. Here we set out our views on the situation in Canada, where leniency is experiencing a downturn, but at a time when the Canadian Competition Bureau has a new leader with a prosecutorial background and experience heading the criminal enforcement side of the organization.
In our view, business may well increasingly question the merits of self-reporting potential cartel conduct and cooperating with the Bureau in return for various forms of leniency.
Appointment of New Commissioner of Competition
On March 5, 2019, Matthew Boswell was appointed Commissioner of Competition to lead the Bureau for a five-year term. Commissioner Boswell previously occupied senior positions within the Bureau, including most recently as interim Commissioner. He is perhaps most closely associated with his prior tenure as the head of the Bureau's Criminal Matters Branch, as it was then known, which is responsible for the investigation of criminal cartels, bid-rigging and deceptive marketing practices. He was recruited to that position from the Ontario Securities Commission, for which he prosecuted securities fraud and other regulatory offences. And he previously worked as a Crown attorney with the Ministry of the Attorney General of Ontario, prosecuting a wide range of criminal offences. Given Commissioner Boswell's professional background and direct involvement in the Bureau's recent criminal enforcement program, it is timely to reflect on where the Bureau may be heading on cartel enforcement under Commissioner Boswell's leadership and whether the Bureau's immunity and leniency programs are likely to feature prominently.
In our view, business may well increasingly question the merits of self-reporting potential cartel conduct and cooperating with the Bureau in return for various forms of leniency. This results from a number of interrelated factors, and the near-term future of cartel enforcement in Canada is likely to be characterized by the following general trends:
- the diminished effectiveness of the Bureau's Immunity and Leniency Programs as a cornerstone of cartel detection and enforcement;
- increased Bureau efforts to offset reduced immunity and leniency applications through more proactive case development, emphasizing market monitoring, outreach and information-sharing with partner agencies and possible measures to enhance its whistleblower regime; and
- the entrenchment and proliferation of potential adverse consequences of being a target of a cartel investigation or prosecution, even as a leniency applicant.
We elaborate on each of these trends and their underlying causes below.
Trend One: Reduced Effectiveness of Immunity and Leniency Programs
After nearly 12 months and two rounds of public consultations, the Bureau released the final version of revised Immunity and Leniency Programs in September 2018. (The first person or entity to report an offence to the Bureau may qualify for "immunity," without facing any criminal fine or charges.
