On April 1, 2016, the Competition Bureau and the Public Prosecution Service of Canada (PPSC), formerly the Federal Department of Justice, secured their ninth guilty plea in the Bureau’s years-long investigation of the Japanese auto parts industry. .The Showa Corporation—a Japanese manufacturer and supplier of auto parts—pleaded guilty in Court to one count of bid-rigging under section 47 of the Competition Act. The Showa Corporation was sentenced to pay a fine of $13 million—the second largest fine ever ordered by a Canadian court for a bid-rigging offence.
Bid-rigging is a serious criminal offence in Canada, similar to the criminal offence of fraud. Bid-rigging usually involves competitors agreeing to artificially increase the prices of goods and/or services offered in bids to potential customers. Under the Act, upon conviction, persons are subject to fines without an upper limit and/or imprisonment for a term not exceeding 14 years.
Under the Act, it is a criminal offence for two or more persons to agree that, in response to call for bids or tenders, one or more of them will:
- Not submit a bid;
- Withdraw a bid; or
- Submit a bid arrived at by agreement;
unless such an agreement is made known in advance to the person calling for bids or tenders.
The Bureau often learns of bid-rigging and other anti-competitive conspiracies through whistleblowers and through its Immunity and Leniency programs. Under the Immunity Program, the first party to disclose to the Bureau an offence not yet detected, or to provide evidence that leads to the filing of charges, may receive immunity from prosecution, as long as the party cooperates with the Bureau. The Bureau first learned of widespread conspiracies in the Japanese auto parts industry via this program in 2009.
Similarly, parties who contravene the conspiracy provisions of the Act, but do not qualify for immunity, may still receive lenient treatment in sentencing in exchange for their cooperation with the Bureau. This program has secured cooperation from numerous companies, including the Showa Corporation, to the benefit of the Bureau’s ongoing investigation.