Lexpert US Guides

www.lexpert.ca | LEXPERT • December 2014 | 19 COMPETITION ENFORCEMENT generics in the pharma industry. "What we might be hearing is an echo of the federal govern- ment's current 'consumer fi rst' message," says Denis Gascon in Norton Rose Fulbright Canada LLP's Montréal offi ce. Another area in which Bureau Without Borders has had an impact is in the treatment of multi-jurisdictional mergers. In early December, 2013, the Bureau issued a No Action Letter regarding ermo Fisher Scientifi c Inc.'s acquisition of Life Technologies Corporation, two US multinationals. In approving the merger, the Bureau cited a remedy ordered by the European Commission that required divestiture of certain assets. " e Bureau had issues on this transaction, but it allowed the US and Europe to be the lead jurisdictions and accepted the global remedy they imposed," says Facey, who represented ermo in Canada. "It's a sign of the confi dence that the Bureau has in its own abilities and its willingness to resort to effi ciencies of this kind in using its resources." Pecman has also shown that he's not daunted by some recent setbacks that the Bureau has suff ered in litigation (like the Visa case and the Chatr case against Rogers), most of them arising from investigations instigated before his appointment. Instead, he has indicated that the Bureau would be more careful about bolstering its cases properly before bringing them. "John is using some of the older arrows in the toolshed's arsenal, such as s. 11 [which gives the Bureau wide powers to apply to the Federal Court for oral and document discovery in aid of an inquiry], much more than his predecessor did," says Paul Collins in Stikeman Elliott LLP's Toronto offi ce. "For example, in the past the Bureau would likely start an abuse of dominance inquiry with an informal approach to a party, but these days they're likely to initiate an investigation with a s. 11 order even if a party is willing to cooperate and has no history of non-compliance." Indeed, it's been almost a quarter century since the Bureau resorted, as it has recently, to s. 11 oral discovery in abuse cases. "It's a bit of an old-school approach," Collins says. "John genuinely believes that going the formal route at the outset of an investigation fl eshes out the issues and so facilitates settlement down the road." e formality would also deliver on Pecman's promised deter- mination to make the Bureau more transparent. "I've found him to be quite reasonable in several high-profi le cases in which I've been involved," Collins says. "He's defi nitely not afraid of litiga- tion, but my sense is that he prefers to work things out." Otherwise, many observers are expecting an upswing in crimi- nal prosecutions, especially those involving cartels. A er all, it's been about three years since the cartel provisions were amended to constitute agreements to fi x prices as per se off enses, making prosecution and conviction easier by removing the need to prove that such agreements were likely to lessen competition. " ere's never a shortage of cartels to pursue," says Anthony Baldanza in Fasken Martineau DuMoulin LLP's Toronto offi ce. "Given Pecman's recent heritage on the criminal side and the fact that the Bureau has matured now that it's gone through a bit of a learning curve regarding the 2010 amendments to the criminal provisions, I think we can expect a fair bit of activity there." Doubtless buoyed by the results of its immunity and leniency programs to date, the Competition Bureau adopted a new, more aggressive stance to enforcement with substantial revisions to the programs and by creating a new whistleblowing program, e Criminal Cartel Whistleblowing Initiative. " e vast majority of criminal cartel and bid-rigging cases that we are investigating have originated with our immunity and leniency programs," says Jeanne Pratt, Assistant Deputy Commissioner, Criminal Matters Branch. " e new initiatives are intended to build on the huge success of these programs." e revisions do not change the main features of the programs. But they do ramp up enforcement policies by, among other things, making it clear that cartels having only indirect sales into Canada are subject to prosecution and therefore fall within the immunity and leniency programs, and by instituting measures aimed at ensuring complete cooperation by applicants. As it turns out, the new initiative seems to be aimed primarily at individuals whose conduct does not expose them to the risk of prosecution. "Mostly we're talking about employees of corpo- rations who have evidenced but not participated in an off ense," Pratt explains. In other words, the new program focuses on innocent parties, encouraging them to provide information by highlighting the protections available and giving them direct contact information. What it does not do is provide positive incentives, like rewards, for innocent people to proff er information. It remains to be seen, then, whether such individuals will be as willing to come forward in cartel cases as have culpable individuals or companies who have opted for the leniency or immunity programs. As if all this wasn't enough, Pecman's appointment came in a year that saw Canadian courts and tribunals produce more signif- icant competition law decisions than ever. " e two previous years, 2011 and 2012, saw unprecedented levels of enforcement," says Adam Fanaki of Davies Ward Phillips & Vineberg LLP's Toronto offi ce. "But from the perspective of competition law jurisprudence, 2013 was unlike any other year." Not that Pecman is going to have any trouble understanding or acting on the rulings. With some 30 years at the Bureau as an investigator, manager and executive, including a year as interim commissioner, it's unlikely that even the most arcane legalities – or any other aspect – of competition law escape him. "Before his appointment as commissioner, Pecman had been in every other signifi cant role that exists at the Bureau," says Collins. Julius Melnitzer is a freelance legal-affairs writer in Toronto. "THERE'S A NEW relationship between the Commissioner and the Canadian Bar Association, what I would call a huge change." > Brian Facey, Blake, Cassels & Graydon LLP

• Cover