Court Decisions

Court Proceedings, Judgments and
Court Orders - 2003

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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Mr. Robert Krass

Date: 2003-09-18
Event: Guilty Plea
Court: Federal Court of Canada (Trial Division)
Court File Number: T-1588-03
Parties: Robert Krass
Provision(s): 45 (1) of the Competition Act - Conspiracy
Products: Graphite electrodes

Summary: On September 18, 2003, Robert P. Krass, former head of UCAR International Inc. (UCAR), pleaded guilty and was convicted of fixing the price of graphite electrodes. He was fined $70,000 by the Federal Court of Canada for his direct involvement in an international price-fixing conspiracy which affected the production of Canadian steel. Graphite electrodes are used primarily in the production of steel in electric arc furnaces and for steel refining in ladle furnaces.

As Chief Executive Officer and later Chairman of UCAR, Mr. Krass led the firm's involvement with other major producers to fix prices and share volumes of graphite electrodes sold in Canada and elsewhere. During the conspiracy, prices for graphite electrodes in Canada almost doubled.

Mr. Krass, a U.S. citizen, is the fourth party to have plead guilty in Canada in relation to the graphite electrode cartel. Previously, UCAR's Canadian subsidiary UCAR Inc., the German corporation SGL Aktiengesellschaft, and the Japanese company Tokai Carbon Co., Ltd. were convicted for their roles and fined a total of almost $24 million.

Court Documents:
No. T-1588-03
Indictment (PDF: 67KB)
Agreed Statement of Facts (PDF: 300KB)
News Release:
2003-09-18 - Former UCAR Executive Robert Krass Pleads Guilty to Price-Fixing

Arteva Specialties S.a.r.l.

Date: 2003-08-29
Event: Guilty Plea
Court: Federal Court of Canada (Trial Division)
Court File Number:
Parties: Arteva Specialties S.a.r.l.
Provision(s): 45 (1) of the Competition Act - Conspiracy
Products: Polyester Staple Fibre

Summary: On August 29, 2003, Arteva Specialties S.a.r.l. pleaded guilty to a charge of price fixing and was fined $1.5 million in the Federal Court of Canada, for its part in a conspiracy affecting the sale of polyester staple fibre, used widely by textile manufacturers in fabrics, sheets, shirts and other clothing, and in home furnishings.

The Bureau's investigation revealed that Luxembourg-based Arteva Specialties S.a.r.l., also known as KoSa, was involved in a price fixing and market allocation conspiracy, affecting polyester staple fibre. This investigation is ongoing concerning the alleged involvement of other companies in this conspiracy.

Court Documents:
Indictment (PDF: 43KB)
Statement of Admissions (PDF: 144KB)
News Release:
2003-08-29 - Competition Bureau Nets $1.5 Million Fine in Polyester Staple Fibre Price Fixing Conspiracy

Akzo Nobel Chemicals BV, Bioproducts Incorporated

Date: 2003-08-18
Event: Guilty Plea
Court: Federal Court of Canada (Trial Division)
Court File Number: T-1349-03
Parties: Akzo Nobel Chemicals BV, Bioproducts Incorporated
Provision(s): 45 (1) of the Competition Act - Conspiracy
Products: Choline Chloride

Summary: On August 18, 2003, Akzo Nobel Chemicals BV and Bioproducts Incorporated pleaded guilty and were fined a total of $1.6 million, in the Federal Court of Canada, for their part in an international conspiracy affecting the sale and supply of an additive widely used in the animal feed industry especially for poultry and hogs.

Akzo Nobel Chemicals BV, a company based in the Netherlands, was fined $1 million for its part in the conspiracy. Bioproducts Incorporated, a US based company was fined $600,000.

The Bureau's investigation concerning Choline Chloride, which started in 1999, revealed that Akzo and Bioproducts participated in an international conspiracy to fix prices in Canada and to allocate market shares here and abroad. As a result of this conspiracy, a very significant proportion of the Canadian market was insulated from foreign competition.

Court Documents
No. T-1349-03
Amendment to Agreed Statement of Facts (PDF: 97KB)
Agreed Statement of Facts (PDF: 228KB)
Indictment (PDF: 59KB)
Prohibition Order (PDF: 414KB)

News Release:
2003-08-19 - Competition Bureau Probe Nets $2.9 Million in Fines and Guilty Plea from Akzo Nobel Chemicals BV

Akzo Nobel Chemicals BV

Date: 2003-08-18
Event: Guilty Plea
Court: Federal Court of Canada (Trial Division)
Court File Number: T-1347-03, T-1348-03
Parties: Akzo Nobel Chemicals BV
Provision(s): 45 (1) of the Competition Act - Conspiracy
Products: Monochloroacetic Acid and Monochloroacetate (MCAA)

Summary: On August 18, 2003, Akzo Nobel Chemicals BV plead guilty in the Federal Court of Canada and was sentenced to fines totaling $1.9 million for its part in a conspiracy affecting the sale and supply of Monochloroacetic Acid and Monochloroacetate (MCAA), a chemical ingredient used in numerous commercial and consumer products, such as herbicides, pulp and paper, and plastics.

The Bureau's investigation concerning MCAA, which started in 2000, revealed that Akzo was involved in an international price fixing conspiracy from 1995 to 1999. The conspiracy agreement was designed to fix prices and allocate market shares for MCAA in Canada and elsewhere. The effect of this agreement was to unduly prevent, limit or lessen the supply and sale of MCAA to purchasers in Canada.

Court Documents:
No. T-1347-03
Prohibition Order (PDF: 421KB)
Agreed Statement of Facts (PDF: 282KB)
Indictment (PDF: 71KB)

No. T-1348-03
Agreed Statement of Facts (PDF: 183KB)
Indictment (PDF: 58KB)

News Release:
2003-08-19 - Competition Bureau Probe Nets $2.9 Million in Fines and Guilty Plea from Akzo Nobel Chemicals BV

Suzy Shier Inc.

Date: 2003-06-13
Event: Consent Agreement
Court: Competition Tribunal
Court File Number: CT-2003-006
Parties: Suzy Shier Inc.
Provision(s): 74.01 (3) of the Competition Act - Ordinary Price: Supplier?s Own

Summary: On June 13, 2003, the Competition Bureau filed a Consent Agreement with the Competition Tribunal resolving concerns over the pricing practices of Suzy Shier Inc.

A Bureau investigation revealed that the women?s clothing retailer had placed price-tags on garments indicating a ??regular?? and ??sale?? price when in fact the garments were not sold in any significant quantity or for any reasonable period of time at the ??regular?? price. The civil ordinary selling price provisions of the Competition Act are designed to ensure that when products are promoted at sale prices, consumers are not misled by reference to inflated regular prices.

Under the terms of this agreement Suzy Shier shall:

• ensure that all future regular price representations comply with the Ordinary Selling Price provisions of the Act;
• implement a corporate compliance program designed to ensure the company?s compliance with the Ordinary Selling Price provisions of the Act;
• publish corrective notices in newspapers across Canada; and
• pay an administrative monetary penalty in the amount of $1,000,000.

Court Documents:Consent Agreement (PDF: 345KB)
News Release:
2003-06-13 - Competition Bureau Investigation Leads to $1-Million Settlement with Suzy Shier Inc.

Para Inc.

Date: 2003-05-07
Event: Consent Agreement
Court: Competition Tribunal
Court File Number: CT-2003-004
Party: Para Inc.
Provision(s): 74.01 (1)(a) of the Competition Act - False or misleading representations; and 74.01 (1)b) of the Competition Act - Representations not based on adequate and proper tests.
Products: Paint

Summary: On May 7, 2003, the Competition Bureau filed a consent agreement with the Competition Tribunal regarding the marketing practices used by Para Inc., of Brampton, Ontario in promoting its Radiance^TM low e-line paints, which the company claimed would generate energy savings of 15% or greater for its users. The product was sold in Canada for a limited time in 2001 but was withdrawn from distribution shortly thereafter.

As a result of a Bureau analysis of tests conducted by Para with respect to Radiance paints, the manufacturer agreed to:

(a) not claim energy savings in an average residential house greater than five per cent;
(b) state that the energy savings will vary according to the climate in the region where the building is situated and the quality of construction of the building among other factors;
(c) not state the heat transference qualities without identifying the energy saving qualities in accordance with paragraph (a) above.

Court Documents:
Consent Agreement (PDF: 179KB)
News Release:
2003-05-13 - Competition Bureau Settles Case Involving Energy Saving Paint

The Gold Factory and R. Pye & Sons Jewellers

Date: 2003-04-23
Event: Consent Agreement
Court: Competition Tribunal
Court File Number: CT-2003-003
Parties: The Gold Factory Ltd. and Roger Pye
Provision(s): 74.01 (3) of the Competition Act - Ordinary price: supplier?s own

Summary: On April 23, 2003, the Competition Bureau filed a consent agreement with the Competition Tribunal requiring that the Gold Factory and R. Pye & Sons Jewellers, in St. John's, Newfoundland and their officers refrain from using deceptive pricing practices in promoting jewellery sales.

A Bureau investigation revealed that the jewellery retailers misrepresented the value of savings to consumers by continuously offering significant discounts from their inflated regular prices of gold jewellery.

Under the terms of the consent agreement, which will remain in effect for 10 years, the officers of the corporations have agreed to cease making any written or verbal representations relating to the regular selling price of products unless:

• 50% of the products had been sold at the stated regular price within 12 months prior to the making of the representation; and
• the products were offered for sale at the stated price or a higher price within 12 months prior to the making of the representation.

Court Documents:
Registered Consent Agreement (PDF: 256KB)
Consent of parties (PDF: 78KB)
News Release:
2003-04-24 - Competition Bureau Actively Preventing Deceptive "Sales Prices" in the Jewellery Industry

Toyo Tanso USA Inc.

Date: 2003-04-15
Event: Guilty Plea
Court: Federal Court of Canada, Trial Division
Court File Number: T-298-03
Party: Toyo Tanso USA Inc.
Provision(s): 61 (1) of the Competition Act - Price Maintenance
Products: Isostatic Graphite

Summary: On April 15, 2003, Toyo Tanso USA Inc. (Toyo Tanso) has pleaded guilty to charges of attempting to maintain the price of isostatic graphite, used to make molds and dies for various industries including autoparts and semi-conductors.

Oregon-based Toyo Tanso was fined $200,000 by the Federal Court of Canada in Toronto under the price maintenance provisions of the Competition Act. A Bureau investigation had revealed that Toyo Tanso met with its independent distributor, Electrodes Canada Inc., and attempted to raise the price of unmachined and semi-machined isostatic graphite in Canada.

Toyo Tanso, an indirect subsidiary of Toyo Tanso Co., Ltd. of Osaka, is the second corporation to be convicted as a result of the Competition Bureau's investigation into the supply and sale of isostatic graphite in Canada. In 2001, Carbone of America Industries Corp. pleaded guilty for its role in an international isostatic graphite price-fixing cartel.

Court Documents:
Indictment - (PDF: 271 KB)
Agreed Statement of Facts - (PDF: 653 KB)
News Release:
2003-04-15 - Competition Bureau Investigation Results in Guilty Plea for Price Maintenance of Isostatic Graphite

Toyota Canada Inc.

Date: 2003-03-28
Event: Consent Prohibition Order
Court: Federal Court of Canada, Trial Division
Court File Number: T-1065-02
Party: Toyota Canada Inc.
Provision(s): 61 (1) of the Competition Act - Price Maintenance
52 (1) of the Competition Act - False or Misleading Representations
Products: Sale of Toyota Vehicles

Summary: On March 28, 2003, the Competition Bureau settled a price maintenance and misleading advertising case involving Toyota Canada Inc. and its Access Toyota Program. The settlement ensured that consumers will have every opportunity to negotiate prices for Toyota vehicles.

The parties agreed to a Consent Prohibition Order issued by the Federal Court of Canada requiring Toyota to amend its sales, promotion, training and monitoring practices for the Access Toyota Program. The amended Access Toyota Program will be permitted to continue and Toyota may extend it to other parts of Canada. As part of the settlement, Toyota made voluntary donations totalling $2.3 million to several charitable organizations across Canada.

The Bureau's inquiry addressed allegations of price maintenance, namely that Toyota was prohibiting dealers under the Access Toyota Program from selling vehicles below "Access/Drive-Away Prices." The inquiry also raised an issue under the misleading representation provisions of the Competition Act because the Access Toyota Web site indicated that Access Toyota dealers could sell for less than Access/Drive-Away Prices without being penalized by Toyota.

News Release:
2003-03-28 - Competition Bureau Settles Price Maintenance and Misleading Advertising Case Regarding the Access Toyota Program

Rhône-Poulenc Biochimie S.A.

Date: 2003-02-27
Event: Guilty Plea
Court: Federal Court of Canada (Trial Division)
Court File Number: T-287-03
Parties: Rhône-Poulenc Biochimie S.A.
Provision(s): 45 (1) of the Competition Act - Conspiracy
Products: Methylglucamine

Summary: On February 27, 2003, Rhône-Poulenc Biochimie S.A., a wholly owned French subsidiary of Aventis S.A., pleaded guilty in the Federal Court of Canada to a charge of price fixing under the Competition Act and was sentenced to a $500,000 fine. This international conspiracy resulted in higher prices for taxpayers for a chemical ingredient used in medical x-rays.

The Bureau's investigation, which started in 2000, revealed that Rhône- Poulenc Biochimie S.A, was involved in a price fixing conspiracy from 1990 through 1999. The conspiracy agreement fixed prices for methylglucamine, a specialized chemical ingredient primarily used to facilitate the recording of high contrast X-ray images.

Court Documents:
Agreed Statement of Facts (PDF: 216 KB)
Indictment (PDF: 74 KB)
News Release:
2003-02-27 - Rhône-Poulenc Biochimie S.A. Sentenced To $500,000 Fine Following Competition Bureau Price Fixing Investigation

Re/Max Ontario-Atlantic Canada Inc. (Re/Max Ontario), Re/Max of Western Canada (1998) (Re/Max Western) and Re/Max International Inc.

Date: 2003-02-17
Event: Prohibition Order
Court: Federal Court of Canada, Trial Division
Court File Number: T-235-03
Party: Re/Max Ontario-Atlantic Canada Inc., Re/Max of Western Canada (1998) Inc., Re/Max International Inc.
Provision(s): 61 (1) of the Competition Act - Price Maintenance
Products: Real Estate Brokerage Services

Summary: The Competition Bureau settled a price maintenance case involving Re/Max Ontario-Atlantic Canada Inc. (Re/Max Ontario), Re/Max of Western Canada (1998) (Re/Max Western) and Re/Max International Inc. in the Federal Court of Canada. The settlement will enhance competition for real estate brokerage services and benefit Canadian consumers by allowing Re/Max franchisees to advertise commission rates or fees to the public.

On February 17, 2003, the parties agreed to a binding court order issued by the Federal Court of Canada under the Competition Act, requiring a change in their policies and to allow the advertising of commission rates or fees.

The Consent Order resolved the Competition Bureau's concerns with respect to Re/Max's conduct under the price maintenance provisions. The Order further required Re/Max organizations in Canada to pay the legal costs incurred by the Crown.

News Release:
2003-02-17 - Competition Bureau Settles Real Estate Case Involving Canadian Re/Max Franchisees

Modugno-Hortibec Inc.

Date: 2003-01-27
Event: Guilty plea
Court: Court of Quebec
Court File Number: 500-73-001800-024
Accused: Modugno-Hortibec Inc.
Provision(s): 7 (1) of the Consumer Packaging and Labelling Act - False or misleading representations relating to prepackaged products
Products: Garden products

Summary: On January 27, 2003 Modugno-Hortibec Inc., a Quebec company specializing in the packaging and sales of garden products such as top soil and compost, pleaded guilty to five counts of false or misleading representation on the quantity of their products. The Court of Quebec imposed an $850 fine for each charge, totalling $4,250, under the Consumer Packaging Act and Labelling Act.

In May 2002, the Competition Bureau conducted a detailed inspection of five types of packing of compost, stones and marble chips to verify the net quantity. The inspection revealed that the net quantity of a number of items packaged under the names Canadian Garden, Master Gardener and Hortibec was less than that indicated on the label. As a result, the Bureau alleged that consumers were deceived about the exact quantity of the products.

News Releases:
2003-01-28 - Competition Bureau Investigation Leads to Guilty Plea and Fine
2002-07-15 - Charges laid against Modugno-Hortibec Inc.

Alexis Corp. (3636135 Canada Inc.) and its administrative affiliate (3587932 Canada Inc.)

Date: 2003-01-20 and 2002-10-21
Event: Guilty pleas
Court: Court of Quebec (District of Montreal)
Court File Number: 500-73-0017731-021
Parties: Jerry Browman, Marcus Miller, Michel Rosenberg, Lawrence Walsh, and Doron Kunin
Provision(s): 52.1 of the Competition Act - Deceptive telemarketing
Products: Promotional products

Summary: On January 20, 2003, four telemarketers involved in a prize-pitch scam targeting consumers in Australia and New Zealand pleaded guilty to deceptive telemarketing in the Court of Quebec (District of Montreal).

The Court imposed the following sentences: Jerry Browman: 15-month conditional sentence and 150 hours of community service; Marcus Miller: eight-month conditional sentence, 12 months probation and 100 hours of community service; Michel Rosenberg: six-month conditional sentence, six months probation and 100 hours of community service; Lawrence Walsh: 12 months probation, 100 hours of community service and a $1,000 fine. Doron Kunin agreed to a 16-month conditional sentence in the Court of Quebec (District of Montreal) on October 21, 2002.

All of the parties received a 10-year prohibition order banning them from working in telemarketing operations, and an order prohibiting them from communicating with any of the remaining co-accused. The remaining co-accused, Sheldon Cutler, Scarlet Jove, Gerald Goldstein, Constantina Athanasopoulos, Armenia Linhares and William Kenwood, will appear in a Montreal court for a preliminary hearing in September 2003.

News Releases:
2003-01-21 - Competition Bureau Investigation Leads to Guilty Pleas by Deceptive Telemarketers
2002-03-18 - Criminal Charges Laid Against Montreal-based Telemarketers

Farber Blake Corp.

Date: 2003-01-20
Event: Guilty plea
Court: Court of Quebec (District of Montreal)
Court File Number: 500-73-001582-010
Party: Farber Blake Corp.
Provision(s): 52 of the Competition Act - False or misleading representations
Products: Promotional products

Summary: On January 20, 2003 telemarketing company Farber Blake Corporation pleaded guilty to one criminal charge and was fined $300,000 for misleading consumers in Canada and New Zealand.

Farber Blake victims were contacted by telemarketers and told that they had won prizes, such as cash, a boat or a cruise in the Bahamas. However, in order to claim their prize, they were informed that they had to buy one of the company's promotional items, such as coin sets or art work. The Bureau alleged that the company sold these promotional items at highly inflated prices and misrepresented the nature, value and quality of both the prizes and the promotional items sold.

News Releases:
2003-01-20 - Telemarketing Company Fined $300,000 for Deceptive Telemarketing Practices
2002-07-26 - Further Charge Against Telemarketer
2002-07-18 - Further Charges Against Telemarketers
2001-06-29 - Competition Bureau Investigation Leads to Criminal Charges Against Telemarketers