Court Decisions

Court Proceedings, Judgments and Court Orders — 2000

To protect confidential information, the Bureau does not reveal the names of the companies involved unless they were otherwise made public.

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• 2000

Unsolicited Internet Directory Services Charges laid

Date: 2000-11-30

Eight charges under the misleading advertising provisions of the Competition Act were laid against three individuals and two companies for allegedly invoicing businesses for unsolicited Internet directory listing services.

Gireesh Athavale

Date: 2000-11-28
Event: Prohibition Order
Court: Superior Court of Justice (Windsor)
Party: Gireesh Athavale
Provision(s): 52 (1)(a) of the Competition Act - misleading advertising;
52 (1)(d) of the Competition Act - misleading representation relating to ordinary selling price
Product: Jewellery

Summary: On July 26th, 1990, a total of seven charges under
section 52 (1)(a) and (d) of the Competition Act (the "Act") were laid against Mr. Gireesh Athavale for allegedly inflating the regular price of jewellery to complement the sale price and making fictitious savings claims.

On April 1st, 1992, the Ontario Superior Court of Justice in Windsor issued a warrant for the arrest of Mr. Athavale as he had failed to attend court. On February 23rd, 2000, the Windsor Police Service executed the warrant.

On November 28th, 2000, the case was resolved with the issuance of a Prohibition Order pursuant to section 34(2) of the Act by the Ontario Superior Court of Justice in Windsor. The order prohibits Mr. Athavale from making any representations to the public relating to the sale of jewellery which misrepresents the value of the jewellery and from making any misleading representations as to the regular selling price of jewellery and the relative savings to consumers on the products being offered for sale.

Court Documents:
Prohibition Order
PDF Document (41 KB)

La Cie de pavage d'asphalte Beaver, Excavation Loiselle et frères Inc., Giguère et Geoffroy Inc., Nepcon Inc., Roxboro Excavation Inc., consulting firm 9014-6135 Québec Inc.

Date: 2000-10-24
Event: Conviction / Prohibition Order
Court: Quebec Superior Court
Court File Numbers: 500-73-001333-000
Party: La Cie de pavage d'asphalte Beaver, Excavation Loiselle et frères Inc., Giguère et Geoffroy Inc., Nepcon Inc., Roxboro Excavation Inc., consulting firm 9014-6135 Québec Inc.
Provision(s): 45 of the Competition Act - Conspiracy
Products: Snow removal contracts

Summary: On October 24, 2000, the Quebec Superior Court imposed fines totalling $1 million on five snow removal companies and a consulting firm in the Greater Montreal area for a market sharing conspiracy. The Court also issued a 10 year prohibition order requiring each of the companies and their executives to comply with the Competition Act.

La Cie de pavage d'asphalte Beaver (a division of Devesco Ltée), Excavation Loiselle et frères Inc., Giguère et Geoffroy Inc., Nepcon Inc., Roxboro Excavation Inc., as well as the consulting firm 9014-6135 Québec Inc., pleaded guilty to the charge of conspiring to share the market and unduly lessen competition in snow clearing, removal and transportation on August 30, 2000.

The offence involved an agreement to share snow removal contracts awarded by the Ministère des Transports du Québec for the 1997-98 season. The agreement primarily encompassed major highways on the island of Montreal. The total value of the contracts was about $4.6 million.

Announcement:
$1 Million fine imposed in Montreal area snow removal conspiracy

Irving Oil. Inc.Court Decision

Date: 2000-10-17
Court: The Quebec Court

Summary: The Quebec Court, Criminal Division, decided not to commit to trial Les Pétroles Irving./Irving Oil Inc. and two gasoline retailers following a preliminary inquiry relating to charges laid against them on September 29, 1999. The Judge felt that the element of threat, as defined by the price maintenance section of the Competition Act (section 61 (1)(a)) , was not demonstrated by the facts before the Court. The Judge therefore felt there was insufficient evidence to put the accused on trial.

Telemarketing Charges laid

Date: 2000-09-21

35 criminal charges under the deceptive telemarketing provisions of the Competition Act were laid against two Montreal-based telemarketing companies, their principal director, and five individual telemarketers.

Daicel Chemical Industries Ltd.

Date: 2000-09-19
Event: Conviction / Prohibition Order
Court: Federal Court Trial Division
Court File Number: T-1686-00
Party: Daicel Chemical Industries Ltd.
Provision(s): 45 of the Competition Act - Conspiracy
Products: Chemical Food Preservatives (Sorbates)

Summary: On September 19, 2000, the Japanese corporation Daicel Chemical Industries, Ltd. pleaded guilty in the Federal Court Trial Division and was fined $2.46 million for an international price fixing and market sharing conspiracy affecting prices over a 17-year period.

In addition, the Court imposed a Prohibition Order prohibiting the repetition of the offence.

The conspiracy involved sorbic acid and potassium sorbate (known together as "sorbates"). Sorbates are chemical preservatives used primarily as mold inhibitors in the manufacture of high-moisture and high-sugar foods such as cheese and other dairy products, bakery products, and other processed foods.

Total sales of sorbates in Canada during the period of the offence were approximately $37 million, with Daicel's sales at approximately $8 million.

Court Documents:
Agreed Statement of Facts (Daicel Chemical Industries, Ltd.) (PDF: 192 KB)
Prohibition Order (PDF: 395 KB)
Indictment (Daicel Chemical Industries, Ltd.) (PDF: 57 KB)
Announcement:
Fines totalling $2.71 million imposed for international conspiracy under the Competition Act

Takayasu Miyasaka (Senior executive of Daicel Chemical Industries Ltd.)

Date: 2000-09-19
Event: Conviction / Prohibition Order
Court: Federal Court Trial Division
Court File Number: F-264-2000
Party: Takayasu Miyasaka
Provision(s): 45 of the Competition Act - Conspiracy
Products: Chemical Food Preservatives (Sorbates)

Summary: The senior executive from the Japanese corporation of Daicel Chemical Industries, Ltd. and the company itself have been convicted of an international price fixing and market sharing conspiracy which affected prices over a 17-year period. The conspiracy involved sorbic acid and potassium sorbate (known together as "sorbates"). Sorbates are chemical preservatives used primarily as mold inhibitors in the manufacture of high-moisture and high-sugar foods such as cheese and other dairy products, bakery products, and other processed foods.

Daicel's former Director of Organic Chemicals pleaded guilty in the Ontario Superior Court and was convicted for his role in the conspiracy, which operated from 1979 until 1996. The Court fined Mr. Miyasaka $250,000 for his part in the conspiracy, taking into consideration his senior position and his personal role in the conspiracy.

Total sales of sorbates in Canada during the period of the offence were approximately $37 million, with Daicel's sales at approximately $8 million.

Court Documents:
Agreed Statement of Facts (PDF: 195 KB)
Indictment (PDF: 46 KB)
Announcement:
Fines totalling $2.71 million imposed for international conspiracy under the Competition Act

SGL Aktiengesellschaft (SGL AG)

Date: 2000-07-18
Event: Conviction / Prohibition Order
Court: Superior Court of Quebec, Criminal Division, Hull
Court File Numbers: T-1686-00, F-264-2000
Party: SGL Aktiengesellschaft
Provision(s): 46 of the Competition Act - Conspiracy / Foreign directives
Products: Graphite electrodes

Summary: On July 18, 2000, the German corporation SGL Carbon Aktiengesellschaft (SGL AG) pleaded guilty to fixing prices in Canada and is fined $12.5 million. This is the largest fine ever imposed under section 46 of the Competition Act.

The Superior Court of Quebec convicted SGL AG of implementing pricing directives as part of an international conspiracy to fix prices and allocate markets for graphite electrodes. SGL AG, a leading world producer of graphite electrodes, carries on business in Canada through its subsidiary S.G.L. Canada Inc., a manufacturer of graphite electrodes located in Lachute, Quebec.

SGL AG and the other members of the cartel agreed to restrict their production capacity and to fix the prices they would charge for, and allocate the volumes they would sell of, graphite electrodes in world markets. In each market, one conspirator was designated to fix the price that other conspirators supplying that market would follow.

As a result of the international cartel, which operated from May 1992 until at least June 1997, a regime of uniform pricing existed between the two main suppliers of electrodes to the Canadian market, and alternative supply sources were basically eliminated.

Graphite electrodes are used primarily in the production of steel in electric arc furnaces (the steelmaking technology used by all mini-mills) and for steel refining in ladle furnaces. Between 1992 and 1997 operators of electric arc and ladle furnaces in Canada are estimated to have consumed at least $440 million of graphite electrodes. Electrode prices in Canada increased by more than 90 per cent over this period.

Court Documents:
Agreed Statement of Facts (PDF: 175 KB)
Announcement:
Foreign Corporation Fined $12.5 Million for Price Fixing

Shakemaster Manufacturing Inc.

Date: 2000-04-25
Event: Conviction / Prohibition Order
Court: Alberta Court of Queen's Bench
Court File Number:
Party: Shakemaster Manufacturing Inc.
Provision(s): 47 (2) of the Competition Act - Bid-rigging
Products: Bids for purchase of commercial timber permits held by Alberta Land and Forest Services

Summary: On April 25, 2000, the Calgary based manufacturer and retailer of pine shakes pleaded guilty and was convicted of bid-rigging, an offence under section 47 (2) of the Competition Act.

Shakemaster Manufacturing Inc., a predecessor of Shakemaster Incorporated, pleaded guilty to rigging bids for the purchase of commercial timber permits at an auction held by the Alberta Land and Forest Service in November, 1996. The Alberta Court of Queen's Bench ordered Shakemaster Manufacturing Inc. to pay a fine of $15,000. In addition, the Court imposed a Prohibition Order prohibiting Shakemaster Manufacturing Inc. as well as its successors and their agents and employees, from agreeing not to bid, or not to compete, on purchases of timber from the Alberta Land and Forest Service. The Order also prohibits the parties from agreeing to submit or not submit bids without first advising the bidding authority.

A charge of bid-rigging and a charge of attempting to impede an inquiry, contrary to section 64 of the Competition Act, against the President of the company, Mr. Lindemulder, were withdrawn pursuant to a plea agreement.

Court Documents:
Admission of Facts - (PDF: 194 KB)
Prohibition Order - (PDF: 148 KB)
Announcement:
Alberta Pine Shake Manufacturer Convicted of Bid-rigging under the Competition Act

King Pape Holdings Limited, Standard Electric Inc., VanJohn Ltd.

Date: 2000-03-31
Event: Conviction
Court: Ontario Superior Court
Court File Numbers:
Party: King Pape Holdings Limited, Standard Electric Inc., VanJohn Ltd.
Provision(s): 47 of the Competition Act - Bid-rigging
Products: Bidding practices in the Toronto electrical contracting industry

Summary: On March 31, 2000, the Ontario Superior Court fined three Toronto area companies for bid-rigging. King Pape Holdings Limited (formerly Rae Brothers Inc.), Standard Electric (Toronto, 1985) Inc., and VanJohn Ltd., carrying on business as Ehrlich Electric Company, pleaded guilty to bid-rigging under the Competition Act. This ends a lengthy investigation into anti-competitive bidding practices in the Toronto electrical contracting industry.

The Ontario Superior Court of Justice has imposed a fine of $300,000.00 for four counts of aiding and abetting a bid-rigging agreement on King Pape Holdings Ltd., a Toronto area construction management and general contracting company. The Court also imposed a fine of $65,000 on Standard Electric for four counts of bid-rigging and a fine of $12,500 on VanJohn Ltd. for one count of bid-rigging. This illegal activity took place between 1991 and 1993 and was part of a larger bid-rigging scheme in Metropolitan Toronto and surrounding area between 1988 and 1993.

This scheme permitted the electrical contractors to determine amongst themselves who would be the successful bidder on numerous contracts for the renovation of commercial office space. The electrical contractors were, at times, assisted with the bid-rigging by Rae Brothers Inc. who worked on behalf of the companies purchasing the electrical contracting services. The scheme was designed to give the appearance of competitive bids and of competition between the electrical contractors when in fact there was no such competitive bidding process among the parties involved.

Announcement:
Construction Management Firm and Electrical Contractors Fined For Bid-Rigging

Merck KgaA

Date: 2000-03-30
Event: Conviction / Prohibition Order
Court: Federal Court of Canada, Trial Division, Ottawa
Court File Number: T-304-00
Party: Merck KgaA
Provision(s): 45 of the Competition Act - Conspiracy
Products: Vitamins (Vitamin C and biotin)

Summary: On March 30, 2000, the Federal Court of Canada imposed a fine of $1 million for conspiracies to fix prices and allocate market shares for two vitamin products sold in Canada.

Merck KGaA of Germany, pleaded guilty and was convicted of participating in international conspiracies involving vitamin C and biotin, between 1991 and 1995. The conspiracies involved all of the principal producers of these vitamins for the world market. In addition to the fine, the court imposed a Prohibition Order prohibiting the commission or repetition of these offences for a period of ten years in Canada. The conspiracies were designed to allocate the volumes sold by the different producers and to artificially raise the prices of these products. Merck's sales in Canada of these bulk vitamins were approximately $4.5 million over the time period of the offence.

Vitamin C is generally used to fortify food and juices, and in supplements, multivitamins and animal feed. Biotin is a B-complex vitamin used in dietary supplements, infant formula, multivitamins and animal feed.

Court Documents:
Agreed Statement of Facts (PDF: 225 KB)
Indictment (PDF: 65 KB)
Announcement:
Federal Court Imposes A Fine Of $1 Million For International Vitamin Conspiracies

Takeda Chemical Industries Ltd.

Date: 2000-03-01
Event: Conviction / Prohibition Order
Court: Federal Court of Canada, Trial Division, Toronto
Court File Number: T-230-00
Party: Takeda Chemical Industries Ltd.
Provision(s): 45 of the Competition Act - Conspiracy
Products: Vitamins (Vitamin B2 and vitamin C)

Summary: On March 1, 2000, the Federal Court of Canada imposed a fine of $ 5.2 million for conspiracies to fix prices and allocate market shares for two vitamin products sold in Canada.

Takeda Chemical Industries, Ltd. of Japan, pleaded guilty and was convicted of participating in international conspiracies involving vitamin B2, also known as riboflavin, and vitamin C, between 1991 and 1995.

In addition to this fine, the court imposed a Prohibition Order prohibiting the commission or repetition of these competition offences for a period of ten years in Canada.

The conspiracies were designed to allocate the sale and artificially raise the prices of vitamins B2 and C, widely used in food, animal feed and pharmaceutical products. Takeda's sales in Canada of these bulk vitamins were approximately $ 32 million over the time period of the offence.

Court Documents:
Indictment (PDF: 66 KB)
Announcement:
Federal Court Imposes a Fine of $5.2 Million For International Vitamin Conspiracies