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Managing Competitor Communication and Collaboration Risks

Managing Competitor Communication and Collaboration Risks
April 3, 2020

Communicating or collaborating with competitors raises serious Competition Act risks that must be managed. These risks include:

  • Criminal contravention that could result in costly investigations, reputational harm, fines and follow-on class actions for a company, and fines and/or jail time for individuals

  • Civil contravention that could result in costly investigations, reputational harm, and remedial and cost orders

Even if no contravention is found, a Competition Bureau investigation will encourage class action lawyers to pursue a damages award or nuisance settlement, all of which involve costs to the company.

Effective management of communications or collaborations between competitors, with the assistance of competition law counsel, will substantially reduce, likely eliminate, the risk of criminal or civil contravention of the Competition Act and the risk of a successful class action. For example, the exchange of competitively sensitive information (CSI) can be managed, and there are ways to structure even extensive collaboration with competitors to remain onside the Competition Act, such as in reliance on existing exemptions or defences for ancillary restraints or regulated conduct.

While competition law advice tailored to the particular context will be required, interactions with competitors should abide, at minimum, with the following “dos and don’ts”:

DOS

  • Circulate a draft agenda in advance of any competitor interaction to allow for legal review before it is finalized and ensure the (agreed upon) agenda is adhered to

  • Keep minutes of all interactions – after legal counsel review, circulate the minutes in draft

  • For more substantive/detailed discussions, have competition law counsel present to manage the risks and expressly affirm and ensure all parties comply with the Competition Act

DON'TS

  • Exchange information about strategic business plans, production or supply plans, markets or customers, or pricing or pricing strategy (CSI) without clearing such exchange with counsel.

  • Enter into any agreement or arrangement that could be said to fix or control the price or production of a product, or allocate sales, territories, customers or markets for a product, without obtaining competition law advice.

If you have any questions, please do not hesitate to contact your usual Blakes contact or any member of the Blakes Competition, Antitrust & Foreign Investment group.

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