Canadian COMPETITION LAW

SWEEPING CANADIAN COMPETITION ACT
AMENDMENTS (BILL C-59) PASSED JUNE 20, 2024

On June 20, 2024, Bill C-59 was passed (the Fall Economic Statement Implementation Act, 2023), which introduced the third of three significant rounds of amendments to Canada’s federal Competition Act in two years (together with Bill C-19 and Bill C-56). This new round of amendments to the Competition Act completes a sweeping overhaul of the Competition Act across virtually all key provisions of Canada’s competition legislation. These amendments are also the most significant changes to Canadian competition law since the modern Competition Act came into effect in 1986 replacing the former Combines Investigation Act.

The Bill C-59 amendments, among other things, strengthen the Competition Bureau’s powers to enforce key deceptive marketing provisions of the Competition Act (e.g., relating to drip pricing, performance claims and ordinary selling price (OSP) claims), strengthen private party rights to seek Competition Tribunal remedies (e.g., for civil deceptive marketing and violations of the civil agreements provisions of the Act), introduce new penalties (e.g., administrative monetary penalties for violating the civil agreements provisions of the Act and for reprisal actions penalizing individuals for complying with the Act) and introduce a new clearance regime for environmental protection related agreements. Canada’s Competition Act merger review regime was also substantially overhauled, eliminating the efficiency defence, introducing market share presumptions and a more restrictive remedial test for restoring competition.

These amendments, together with those enacted in June 2022 and December 2023 (Bill C-19 and Bill C-56), increase the potential competition law risk for companies, trade and professional associations and other entities, particularly those without credible and effective competition law compliance programs and that have not reviewed their business practices to reflect Canada’s new competition laws. For the Competition Bureau’s summary of the June 20, 2024 Bill C-59 amendments to the Competition Act, see: Guide to the June 2024 amendments to the Competition Act (June 25, 2024).

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Competition Bureau Preliminary Guidance on the Mergers
and Restrictive Trade Practices Provisions of the Competition Act

On November 7, 2024, the Competition Bureau issued preliminary guidance relating to the recent changes to the provisions on mergers and restrictive trade practices under the Competition Act – see:  here.

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Does the Competition Act offer Competition Act
whistleblowers (informants) protection?

Yes.

The whistleblower provisions are set out in sections 66.1 and 66.2 of Canada’s federal Competition Act. These sections were enacted in 1999 but have not, until recently, received much attention. This has been changing since, among other things, Canada’s Competition Bureau launched a Whistleblowing Initiative in 2013.

What do the whistleblower sections
of the Competition Act do?

The whistleblower sections of the Competition Act: (i) protect the identities of people who report Competition Act violations to the Bureau (section 66.1); and (ii) prohibit employers form retaliating against employees (including independent contractors) who, in good faith and based on reasonable belief report potential competition law offences to the Bureau (section 66.2).

The Criminal Code (Code) contains similar employee protection provisions for reporting federal or provincial offences (section 425.1). The maximum penalty for violating the Code’s whistleblower offence is imprisonment for up to five years.

What is the Competition Bureau’s
confidentiality policy for whistleblowers?

The Bureau’s confidentiality policy for whistleblowers is set out in its Information Bulletin on the Communication of Confidential Information Under the Competition Act:

“Under section 66.1 of the Act (commonly referred to as the whistleblowing provision), anyone who has reasonable grounds to believe that a person has committed or intends to commit a criminal offence under the Act may notify the Bureau of the particulars of the matter and may request that his or her identity be kept confidential. The Bureau will keep confidential the identity of a person who has made such disclosure and to whom an assurance of confidentiality has been provided.

When a person has accepted such an assurance, his or her identity and any information that could reveal his or her identity is confidential and cannot be communicated under section 29 of the Act without the consent of that person.

Information provided by a whistleblower, other than his or her identity and any information that could reveal his or her identity, may be communicated under section 29 of the Act in the four limited circumstances set out in section 3.2 of this Bulletin. Where information provided by a whistleblower is communicated in such circumstances, the Bureau will make every effort to ensure that the communicated information does not disclose the identity of the whistleblower or any other information that could reveal his or her identity.”

Is reporting Competition Act violations mandatory for
directors, officers or other personnel?

No.

Whistleblowing under the Competition Act is voluntary. This is in contrast to, for example, other legislation, such as the federal Financial Administration Act, which imposes positive reporting obligations on federal employees. See Public servants who turn a blind eye to wrongful activities will be held accountable.

If a director, officer or employee does not report
a competition law violation can they be at risk?

Yes.

However, individual liability does not turn on whether or not an individual reports a competition law violation, but rather whether (and the extent to which) they were involved in the illegal activity.

For example, an individual may be liable for a competition law offence where they were either a party to the offence (e.g., party to a price-fixing or other criminal conspiracy agreement under section 45 of the Competition Act) or aided or abetted an offence under Canada’s Criminal Code (e.g., assisted with the formation of a conspiracy agreement).

What happens if a company
retaliates against a whistleblower?

Section 66.2 of the Competition Act makes it a criminal offence for companies to retaliate against a whistleblower.

More specifically, an employer cannot dismiss, suspend, demote, discipline, harass or otherwise disadvantage an employee who, in good faith and on reasonable belief, reports a Competition Act offence to the Competition Bureau or does anything else listed under section 66.2 of the Competition Act, including refusing to participate in an offence.

Are financial rewards available to whistleblowers?

No.

Unlike, for example, the Ontario Securities Commission’s Whistleblower Program, where tipsters are eligible to receive financial rewards for reporting violations, there are no financial incentives offered to whistleblowers under the Competition Act.

What is the Competition Bureau’s
position on whistleblowers?

Canada’s Competition Bureau encourages whistleblowers to report potential Competition Act violations.

In 2013, the Competition Bureau launched a “Whistleblower Initiative” to highlight the whistleblowing sections of the Competition Act and encourage reporting of potential competition law offences.

The Competition Bureau’s initiative did not, however, create any new Competition Act rules. It was an effort by the Bureau to highlight existing Competition Act protections for whistleblowers.

When the Competition Bureau’s Whistleblower Initiative was launched, the Commissioner of Competition said:

“This initiative is a way for members of the public to provide information to the Bureau regarding possible violations of the criminal cartel provisions of the Act. Anyone who has reasonable grounds to believe that a person has committed, or intends to commit, a criminal offence under the Act, may notify the Bureau of the particulars of the matter and may request that his or her identity be kept confidential. The Bureau will keep confidential the identity of a person who has made such disclosure and to whom an assurance of confidentiality has been provided. The Bureau will also ensure that any information provided by a whistleblower that is communicated to other law enforcement agencies does not reveal the identity of the whistleblower. We believe that this initiative will support increased reporting of anti-competitive behaviour, while ensuring the protection of individuals who come forward with such information.”

Should whistleblowing be part of an
organization’s Canadian competition law
compliance program?

Yes.

The Bureau’s position has been that a credible and effective Canadian competition law compliance program should include information about the Competition Act’s whistleblowing protections:

“While an internal reporting mechanism is important, there may be situations where the use of an external reporting mechanism would be more appropriate. A [competition law compliance] program should also educate employees who are in a position to engage in, or be exposed to, conduct in potential breach of the Acts on the Bureau’s Immunity Program and the whistleblowing provisions (sections 66.1 and 66.2 of the Competition Act.”

Are there other ways to report competition law violations
to the Canadian Competition Bureau?

Yes.

There are several different ways to report Competition Act violations to the Competition Bureau.

These include filing a complaint with the Competition Bureau (which can be done by calling the Bureau, filing a complaint on the Bureau’s online complaint page or filing a written complaint) or applying for immunity or leniency under the Bureau’s Immunity or Leniency Programs.

Where can I get more information about
whistleblowing and the Competition Act?

For more information about whistleblowing under the Competition Act, see Whistleblowers, Competition Bureau Launches Whistleblowing Initiative and Information Bulletin on the Communication of Confidential Information Under the Competition Act.

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SERVICES AND CONTACT

We are a Toronto based competition and advertising law firm offering business and individual clients efficient and strategic advice in relation to competition/antitrust, advertising, Internet and new media law and contest law. We also offer competition and regulatory law compliance, education and policy services to companies, trade and professional associations and government agencies.

Our experience includes advising clients in Toronto, across Canada and the United States on the application of Canadian competition and regulatory laws and we have worked on hundreds of domestic and cross-border competition, advertising and marketing, promotional contest (sweepstakes), conspiracy (cartel), abuse of dominance, compliance, refusal to deal and pricing and distribution matters. For more information about our competition and advertising law services see: competition law services.

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For more information about our firm, visit our website: Competitionlawyer.ca