Canada Set to Implement Stringent New Conspiracy Law: Some Words Of Caution For Anyone Doing Business In Canada

Overview

Effective March 12, 2010, the new "per se" conspiracy offence under the Competition Act (the "Act") will come into effect. Agreements or arrangements between competitors to fix prices, allocate markets or control production––so-called "naked restraints"––may now result in fines and/or imprisonment even where implementation has not, or would not have, any effect on the level of competition in a market. The new law marks a significant departure from Canada's time-tested, market-effects requirement, i.e. that the conspiracy would lessen or prevent competition "unduly." As an alternative to criminal prosecution, agreements between competitors may be reviewed by the Competition Tribunal under a new civil provision which incorporates a competitive effects test.