Communication of Confidential Information Under the Competition Act
Author: Director, Competition Policy, Competition Bureau
May 1995
Table of Contents
Introduction
This Statement articulates how the Bureau of Competition Policy (the "Bureau") treats the information it acquires in enforcing and administering the Competition Act (the "Act ").(1) The Bureau is committed to treating such information responsibly and has maintained constant vigilance to avoid communicating confidential information while conducting investigations. The policy of the Director of Investigation and Research (the "Director") is one of minimizing the extent to which confidential information is communicated. Although the Director may be legally empowered to communicate information in a specific instance, he does not necessarily do so. Communication of confidential information is not the rule; it is the exception.
The Director investigates matters brought to his attention to determine if they raise issues of anticompetitive behaviour having an impact on the Canadian economy. Section 10 of the Act requires the Director to inquire "into all such matters as he considers necessary to inquire into with the view of determining the facts." This is stated without qualification as to how, substantively, the Director is to conduct those inquiries, although they are required to be conducted in private (i.e. not publicly). Section 10(3) prescribes the process that the Director must follow in conducting an inquiry. Section 10(3) provides that "All inquiries under this section shall be conducted in private." Thus, the process of an inquiry is to be held away from the public eye. In conducting his inquiries, the Director carries out his mandate in as private a manner as circumstances permit.
Under the Director, the Bureau reviews business behaviour and examines competition concerns by conducting investigations (2) encompassing the careful review of information, its analysis and integration into a comprehensive understanding of relevant issues and its consideration in the choice of an enforcement approach aimed at addressing any competition issues identified.
During its investigations, the Bureau collects a great deal of information from a variety of sources, providing a picture of the state of competition in a particular industry. Information typically includes historical and projected data on sales, profits and market shares, statements of competitive strategy, confidential contracts with customers and suppliers, detailed information on costs of production, and analyses of the competitive impact of firms and products on the market in question. This type of information is often commercially sensitive and, although more often than not it is provided on a voluntary basis, it may be obtained by the Director using formal powers under the Act. This information may be used to formulate questions and facilitate informed discussions with parties under investigation and third parties. Customers, competitors or suppliers are often contacted to provide information on such subjects as the definition of relevant markets, the nature and extent of barriers to entry and the role and significance in the market of individual competitors. All this is routinely done by the Bureau without communicating confidential information to those third parties.
Section 29 and Confidentiality
Section 29 provides specific protection from communication for certain types of information in the Director's possession, including the identity of any person from whom information was obtained pursuant to the Act, information obtained pursuant to the exercise of formal powers and that provided with a merger prenotification or request for an advance ruling certificate. Although confidential information not enumerated under section 29 does not enjoy the protection of any provision of the Act, given the generally sensitive nature of such information, it is the Director's practice to treat it as if it were covered by section 29.
The prohibition on communication of section 29 information does not apply where the information has already been made public. For example, section 29 does not apply when the parties who are the subject of an investigation release information publicly or when persons who provide information to the Director make their identity public. For instance, if contacted by the media or others to confirm information that is already public, the Director will generally do so. Section 29 also permits communication in two particular circumstances: to Canadian law enforcement agencies or "for the purposes of the administration or enforcement" of the Act.
Canadian Law Enforcement Agencies
For the most part, the Director has maintained an arm's length relationship with Canadian law enforcement agencies, with communication principally restricted to the redirecting of complaints when they fall within other agencies' jurisdictions. Agencies receiving complaints falling under the Act also forward them to the Bureau. Should communication of information to a Canadian law enforcement agency be undertaken in relation to an investigation under the Act, communication generally occurs only to the extent required to enable the agency to provide the Director with the assistance sought. However, communication permissible under section 29 need not necessarily occur to advance any particular matter under the Act and may be done for the express purpose of assisting the Canadian law enforcement agency in carrying out its duties.
"Administration or Enforcement"
In the Director"s view, the "administration or enforcement" exception to the prohibition against communicating section 29 information permits communication for the purposes of advancing a specific investigation being carried out pursuant to one or more sections of the Act.(3) Communicating such information to a foreign law enforcement agency, where the proposed communication is for the purpose of receiving the assistance or cooperation of that agency regarding a Canadian investigation, would fall within this exception as well.
Confidentiality Undertakings
The Director's ability to administer or enforce the Act may be impeded by acceding to requests from those voluntarily providing information to limit his ability to communicate that information. As a rule, such requests will not be granted, with exceptional instances being considered on a case-by-case basis. Parties providing information are, however, encouraged to make whatever submissions they wish on that information's commercial sensitivity.
International Mutual Legal Assistance
In the area of international mutual legal assistance, confidential information, whether or not it falls within section 29, is treated in the same manner. Requests under the auspices of a mutual assistance treaty such as the Treaty between Canada and the United States on Mutual Legal Assistance in Criminal Matters, are administered by the Department of Justice according to the provisions of the treaty and its implementing legislation, the Mutual Legal Assistance in Criminal Matters Act.(4)
In response to such a request, information in the Director's possession may be provided to a foreign law enforcement agency where the Bureau and the foreign agency are working on the same matter and where the Director determines that communication of the information to the foreign agency would assist him in advancing his investigation.
State-to-state exchanges of information are always made on a confidential basis. In addition, the information communicated in response to a formal request is provided only for the specific use and purpose identified in the request by the foreign agency.
Private Actions
Private parties wishing to claim damages and pecuniary compensation may initiate a private action pursuant to section 36 of the Act. No general right of access to records in the Director's possession is provided in the Act. To preserve the independence necessary to carry out his mandate effectively and to protect the integrity of the investigative process under the Act, the Director would not voluntarily provide information to persons contemplating or initiating a private action. The Director believes that the civil discovery process and subpoena mechanisms available to any private litigant following the filing of a motion before the courts are appropriate mechanisms to gain access to records, including those in the Director's possession.
The Director would oppose compliance with subpoenas for production of documents while an investigation is ongoing if compliance would have a potential to impede his investigation or otherwise undermine his ability to enforce the Act. Should the Director's opposition be unsuccessful, protective orders would be sought. Should a subpoena be served upon the Director after the investigation has been completed, it may be complied with once the action has been initiated and the information provider has been apprised of the request. Whether the Director would seek to invoke available privileges would be considered on a case-by-case basis.
Access to Information Act
The Director recognizes that persons providing information to the Bureau may be concerned that the information would be disclosed in response to a request under the Access to Information Act(5) (the ATIA). Section`24 of the ATIA specifically provides that information protected by section 29 of the Competition Act shall not be disclosed in response to an ATIA request.
Regarding confidential information not enumerated under section 29, the ATIA provides that the Minister may refuse to disclose investigative and commercially sensitive information. In the vast majority of circumstances, the Director would recommend that information falling within these exemptions not be disclosed. However, the Director does not have the final authority as to the treatment of documents under the ATIA, nor can he provide undertakings or establish policies that would prevent the release of information under this statute.
(1) This document is a general statement of practice. It is not a binding statement of how the Director's discretion will be exercised in a particular situation. It supersedes all previous statements made by the Director or other officials of the Bureau. It does not discuss the treatment or communication of information once criminal proceedings have been initiated before the courts by the Attorney General. Similarly, the rules of procedure and rulings by the Competition Tribunal will govern the protection to be afforded to records and parties in a particular non-criminal matter before the Tribunal. Finally, it does not discuss "without prejudice", litigation, public interest or any other privileges which may be available to the Director (or other parties) and the circumstances under which he will consider invoking, or waiving, such privileges. This Statement is not intended to be a substitute for the advice of legal counsel. Interpretation of the law is ultimately the responsibility of the courts.
(2) "Investigations" refers to both "examinations" and "inquiries".
(3) It is possible that communication of section 29 information could occur on rare occasions when the Director is intervening, pursuant to his statutory authority, before regulatory agencies pursuant to sections 125 or 126. Such communication would occur when relevant to the intervention, but only where the information cannot be obtained through the regulatory body's own process. In this regard, it is noteworthy that such an instance has yet to occur.
(4) R.S.C. 1985, c. M-13.6.
(5) R.S.C. 1985, c. A-1.
