The Competition Act is enforced and administered by the Competition Bureau, a federal enforcement agency headed by the Commissioner of Competition.
The Competition Bureau investigates potential criminal competition law offences and civil reviewable matters under the Competition Act based on its own investigations and complaints from consumers, competitors and other marketplace participants. For more information about Competition Bureau complaints see: complaints.
These include a range of advertising and marketing law matters, ranging from the “general misleading advertising” provisions of the Competition to a number of specific forms of advertising practices, including promotional contests, deceptive prize notices, multi-level marketing, testimonials, deceptive telemarketing performance claims, disclaimers, “green” or natural claims, bait-and-switch advertising, “ordinary selling price” claims (e.g., in relation to sales or discounts) and sales above advertised prices.
The Competition Bureau has significant powers to investigate potential violations of the Competition Act. These include the ability to obtain court orders to search premises and seize documents, search and seize computer records, tap phone lines, compel individuals to testify under oath or require companies or individuals to produce documents or responses to written information requests.
CIVIL MATTERS & CRIMINAL OFFENCES
The Commissioner of Competition has the power to investigate and refer criminal matters under the Competition Act to the Director of Public Prosecutions (DPP) for prosecution. These include conspiracy (price-fixing, market allocation/division and supply/output restriction agreements between competitors), bid-rigging, criminal misleading advertising, deceptive telemarketing and pyramid selling.
While the Competition Bureau investigates potential violations of the Competition Act’s criminal offences, the responsibility for prosecutions lies with the DPP. In practice, the Competition Bureau and the Public Prosecution Service work closely together on criminal competition law investigations.
The Commissioner of Competition is also responsible for investigating and initiating applications relating to potential violations of the Competition Act’s civil reviewable matters sections.
These are civil (not criminal) sections of the Competition Act, which are mostly heard by the federal Competition Tribunal but may also be adjudicated by provincial civil courts depending on the section of the Competition Act.
The Competition Tribunal is a specialized administrative body consisting of judges and lay experts. Civil reviewable matters under the Act include the civil misleading advertising, refusal to deal, price maintenance, abuse of dominance and exclusive dealing / tied selling / market restriction sections.
COMMENCEMENT OF COMPETITION LAW MATTERS
Proceedings may be commenced under the Competition Act by the Competition Bureau itself based on its own investigations or based on complaints from customers, competitors or other industry participants.
In many criminal cases, the Competition Bureau commences investigations based on parties applying for immunity or leniency under the Bureau’s formal Immunity or Leniency Programs.
The Competition Bureau’s Immunity and Leniency Programs are its leading source of evidence about criminal violations of the Competition Act and can be a significant safe harbour companies or individuals implicated in potential criminal competition law violations.
The Competition Bureau also relies on whistleblowers for some of their matters. For more information see: whistleblowers.
PRIVATE ACTIONS AND PRIVATE ACCESS APPLICATIONS
In addition to Competition Bureau investigations, private parties may also in some cases commence private actions for violations of the criminal sections of the Competition Act (typically under the criminal conspiracy or criminal misleading advertising sections) or commence private access applications before the Competition Tribunal for orders under the refusal to deal, price maintenance or exclusive dealing / tied selling / market restriction sections.
For more information about private actions and private access applications under the Competition Act, see: Canadian competition litigation.
COMPETITION ACT PENALTIES
Violation of the Competition Act can result in significant penalties, lost time and negative publicity for individuals, companies, associations and their directors and officers.
Some potential Competition Act penalties include criminal fines, civil administrative monetary penalties or “AMPs” (essentially civil fines), imprisonment, damages (or settlements) arising from private civil actions and court orders (injunctions or prohibition orders) to stop or modify conduct.
Some specific penalties under the Competition Act include criminal fines of up to $25 million, civil fines of up to $10 million and imprisonment for up to 14 years.
There is also potential director and officer liability under the Competition Act. The Competition Bureau commonly pursues individual executives as accused in criminal matters and plaintiffs frequently name directors and officers as defendants in civil competition law actions.
A significant portion of Canadian competition law cases also result in negotiated settlements with the Competition Bureau. While the terms of such settlements (e.g., under consent agreements) varies according to the case, they commonly include negotiated penalties, an agreement to stop the conduct that allegedly violates the Competition Act, a commitment to adopt or revise a company’s competition law compliance program and a reporting obligation to the Competition Bureau.
COMPETITION BUREAU SEARCHES
The Competition Bureau’s enforcement powers include the ability to obtain search warrants to search premises and seize records, which may include documents and computer records. The Competition Bureau can seek court orders to search premises in relation to both criminal and civil matters.
The Competition Act also includes criminal obstruction provisions, which make it an offence to impede or prevent or attempt to impede or prevent inquiries or examinations under the Competition Act.
SERVICES AND CONTACT
I help clients practically navigate Canada’s advertising and marketing laws and offer Canadian advertising law services in relation to print, online, new media, social media and e-mail marketing.
My Canadian advertising law services include advice in relation to: anti-spam legislation (CASL); Competition Bureau complaints; the general misleading advertising provisions of the Competition Act; Internet, new media and social media advertising and marketing; promotional contests (sweepstakes); and sales and promotions. I also provide advice relating to specific types of advertising issues, including performance claims, testimonials, disclaimers and native advertising.
To contact me about a potential legal matter see: contact
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