March 26, 2015
When pricing agreements become harmful
Price-fixing is consumer fraud. Under Canadian law, when competitors agree to fix prices, they can face a maximum sentence of 14 years' imprisonment and/or a fine of $25 million.
The Quebec gasoline price-fixing investigation
In an investigation that began in 2004, Competition Bureau investigators uncovered evidence indicating that service station operators had conspired to set the price of gas at the pump in a number of local markets in Quebec.
These agreements involved price increases of only a few cents a litre. However, the high volume of sales meant these little increases added up to big profits and had an impact on the economy in the affected regions.
During its investigation, the Competition Bureau used wiretaps and intercepted over 200,000 telephone conversations.
The following are actual excerpts from some of the intercepted conversations:
- “As usual, in the usual locations? What time? At 10 o’clock?”
- “OK, I’ll let you call your people and I’ll call mine, and then at 10 o’clock at 95.4¢.”
- “I’m against price wars. But I don’t have anything against image wars.”
- “What we want is to make money.”
So far, 39 individuals and 15 companies have been charged in this ongoing case. To date, 33 individuals and seven companies have pleaded or were found guilty with fines totalling over $3 million. Six individuals were sentenced to a total of 54 months imprisonment.
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