Alternative Methods of Cartel Detection in Canada Remarks

Alternative Methods of Cartel Detection in Canada Remarks of Kristen Pinhey Competition Law Officer Competition Bureau Canada Cartel Working Group SG 1 Teleconference on Ex Officio Cartel Investigations October 14, 2014

Immunity and Leniency Programs Ø The goal of the Competition Bureau’s Immunity Program is to uncover and stop criminal anticompetitive activity and to deter others from engaging in this behaviour Ø The Immunity Program has proven to be the Bureau’s single most powerful means of detecting, investigating and prosecuting criminal activity under the Act Ø Our Leniency Program complements our Immunity Program by supporting the effective and efficient enforcement of the Competition Act 2

Other Methods of Cartel Detection Ø Information Centre and complaints line Ø Whistleblower initiative Ø Proactive monitoring and competitive intelligence Ø Partnerships with domestic and international agencies Ø Relationships with procurement authorities Ø Outreach with the business and legal communities Ø Public awareness of the Bureau’s mandate and programs 3

Information Centre and Complaints Line Ø The Information Centre is the primary point of entry for requests from members of the public Ø The public can contact the Bureau through the Information Centre by telephone or e-mail Ø We also have an online complaints form to facilitate the complaints process 4

Criminal Cartel Whistleblower Initiative Ø The Competition Act has a specific provision protecting the identity of a “whistleblower” Ø The Bureau recently announced the establishment of a new whistleblower initiative and updates to its website to provide information about how whistleblowers can contact the Bureau to report alleged criminal activity Ø Two of the objectives of this initiative are: – To increase the quality and quantity of whistleblower requests. – To increase the number of cases originating outside of the Immunity Program. 5

Proactive Monitoring and Competitive Intelligence Ø Bureau officers regularly monitor the media for potential cartel conduct Ø The Bureau also benefits from information sharing within the agency Ø Additionally, Bureau officers and management frequently liaise with international counterparts 6

Partnerships with Domestic and International Agencies Ø The Bureau has partnerships with several domestic agencies which complement and support the work of the Bureau, as well as strong international partnerships Ø On the domestic side, we are strengthening our ties with various Canadian police forces and their respective white-collar crime investigation units Ø On the international front, the Bureau works in partnership with its international counterparts when conducting international investigations 7

Relationships with Procurement Authorities Ø The Bureau provides anti bid-rigging presentations to all levels of government, including Public Works and Government Services Canada (PWGSC), the principal procurement agency of the Canadian Federal government Ø These outreach presentations provide procurement authorities with knowledge of how to detect, deter and report bid-rigging Ø We are in the process of completing a Memorandum of Understanding with PWGSC that will formalize our strong relationship with the agency 8

Outreach in the Business and Legal Communities Ø The Bureau regularly conducts outreach sessions with the business community Ø Following these presentations, the Bureau uses a post-outreach presentation survey to evaluate the effectiveness of the presentation and participants’ increased awareness Ø The Bureau publishes for consumers and businesses on its website 9

Public Awareness of the Bureau’s Mandate and Programs Ø Maintaining and improving public awareness of the Bureau’s role and mandate is a crucial feature of maintaining credible domestic enforcement programs Ø The Bureau regularly publishes press releases following events, such as the laying of charges and/or guilty pleas, and also publishes speeches given by Bureau officials Ø The Bureau’s cartel awareness efforts, particularly the media attention that large cartel and bid-rigging cases draw, increase awareness of competition law throughout the general Canadian population 10

Case Example: Quebec Gas Cartel Ø Investigation of retail gas stations who conspired to fix prices in local communities in Quebec Ø Many different investigative tools used, including wiretaps and searches Ø The Bureau searched 88 premises in two weeks, the largest search ever undertaken by the Bureau. Ø The matter is currently before the courts – 39 individuals and 15 companies have been charged – 33 individuals and 7 companies have pleaded or were found guilty, with fines totalling over $3 million – 6 individuals have been sentenced to terms of imprisonment totalling 54 months 11

Case Example: IT Services Ø Investigation of companies and individuals who rigged bids to obtain Government of Canada contracts for information technology services worth approximately $67 million Ø The matter is currently before the courts – Charges laid against 14 individuals and 7 companies – To date, 2 individuals have each pleaded guilty to one count of bid-rigging Ø A 3 -month preliminary hearing was completed and the accused have been committed to stand trial 12

Case Example: Bid Rigging in the Construction Industry Ø In February 2011, the Québec provincial police force, the Sureté du Québec, created a Permanent Anti-Corruption Unit (UPAC) Ø The Bureau conducted a joint investigation with UPAC involving bid-rigging in the construction industry in greater Montreal area Ø In June 2012, a total of 77 charges were laid against nine companies and 11 individuals in in connection with a collusion scheme. These charges included 20 counts of bid-rigging against nine companies and 24 counts of bid-rigging against six individuals 13

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