On May 6, 2021, the Competition Bureau (the “Bureau”) released its updated Competitor Collaboration Guidelines (the “Guidelines”),[1] providing refined insight into enforcement efforts under the criminal conspiracy (section 45) and civil agreement (section 90.1) provisions of the Competition Act (the “Act”).
Tracing its roots back to the 2009 amendments which introduced significant changes to the Act (including a per se criminal conspiracy offence), the updated Guidelines are reflective of developments in competition law enforcement and the Bureau’s experience in reviewing competitor collaborations over the past decade, as well as feedback from a 2020 public consultation.
Businesses should be relieved to learn that the original Guidelines’ core tenets remain unchanged. In particular, the Guidelines still proclaim that:
- section 45, which addresses criminal conspiracies, is reserved for agreements that constitute “naked restraints” on competition (e., restraints that are not implemented in furtherance of a legitimate collaboration, strategic alliance or joint venture);
- purely vertical agreements between suppliers and customers, including in the context of dual-distribution, will not be assessed under section 45; and
- “conscious parallelism” (e., the mere act of independently adopting a common course of conduct with awareness of the likely response of competitors or in response to the conduct of competitors) is insufficient to establish an agreement for the purposes of section 45.
While the updates to the Guidelines are relatively modest, they do share some additional insight into the Bureau’s views on key issues, such as:
- buy-side agreements between competitors for the purchase of products and services, including employee no-poaching and wage-fixing agreements, will not be assessed under the criminal provisions of the Act;
- consortium agreements may be captured by the civil provisions of the Act if there is substantial lessening or prevention of competition among bidding parties;
- algorithmic pricing may form the basis of a cartel offence under the criminal provisions of the Act; and
- non-compete clauses/agreements may be captured by either the criminal or civil provisions of the Act, among others.
Some of the updates suggest that the Bureau will delve deeper into the relationship dynamics between the parties to an agreement. Such additional scrutiny should be facilitated by the federal government’s recent pledge to increase the Bureau’s budget by $96 million over the next five years, plus annual $27.5-million budget increases after that.
As such, parties to competitor collaborations would be wise to pay closer attention to the rationale and necessity of certain agreements or terms within an agreement as part of their overall competition law risk assessment.
Should you have any questions regarding this bulletin or require further information, please do not hesitate to contact the authors of this article.
[1] Note, although the Guidelines provide general, yet helpful guidance on the Bureau’s approach in assessing collaborations between competitors, the Guidelines are not law and are not binding on the Commissioner of Competition or the Director of Public Prosecutions.
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