Canada Pipe Company Ltd. Pleads Guilty and Pays Record $2.5 Million Fine for Conspiracy Offence Under the Competition Act

OTTAWA, September 27, 1995 — The Director of Investigation and Research under the Competition Act, George N. Addy, announced today that a record $2.5 million fine has been levied against Canada Pipe Company Ltd., (CPC) for one count of conspiracy. This conspiracy involved an arrangement, between the then President of CPC (who was also President of its American parent, McWane Inc.) and the President of U.S. Pipe and Foundry Company, to cut off supplies of ductile iron pipe to CPC's Canadian competitor. The decision was rendered by Mr. Justice McKeown in the Federal Court of Canada (Trial Division) in Toronto, Ontario.

The company pleaded guilty to having arranged with U.S. Pipe to lessen competition in Canada unduly in the supply and sale of ductile iron pipe in the period of January 1990 to September 1990. If implemented, this arrangement would have effectively given CPC the entire Canadian market. Ductile iron pipe is used in the filtration, transportation and distribution of drinkable water in high pressure water mains. CPC's customers include municipalities, distributors of pipe, fittings, and valves, and construction contractors.

The decision is significant because, in addition to the deterrent value of the record fine, the costs of the Crown's investigation and legal services were an important factor in deciding on the amount of the fine. A Prohibition Order was also imposed.

"Our prosecution of this case in Canada clearly benefited from the cooperation provided by the U.S. Department of Justice, Antitrust Division," Mr. Addy stated. Investigative cooperation among law enforcement agencies to fight transborder anticompetitive activities is increasing and those who break competition laws will not find protection in another jurisdiction. Cooperation allows us to attack foreign based anti-competitive conduct directed at the Canadian market.

"An Agreement on enforcement cooperation between Canada and the United States regarding the Canadian Competition Act and American antitrust legislation was signed on August 3, 1995. With these new mechanisms in place, further cooperation between the two agencies can be expected to grow in the future," Mr. Addy added.