Archived — Competition Bureau sends signal to price-fixers with $12.5 million fine

First Conviction Under New Criminal Price-Fixing Law

OTTAWA, January 6, 2012 — The Competition Bureau announced today that Domfoam International Inc. and Valle Foam Industries (1995) Inc. pleaded guilty yesterday to conspiracy under the Competition Act and were fined a total of $12.5 million for participating in a price-fixing cartel for polyurethane foam.

Domfoam and its affiliate, Valle Foam, admitted before the Ontario Superior Court in Ottawa that they had agreed with competitors to fix the price of polyurethane foam products manufactured at their plants in Brampton, Ontario, Delta, British Columbia, and Montreal, Quebec, over a period of 11 years. The companies' products are used mainly in carpet underlay, furniture and bedding.

"Yesterday's guilty plea is the first conviction under Canada's amended conspiracy law," said Melanie Aitken, Commissioner of Competition. "This investigation highlights the Bureau's reinvigorated mandate to stop consumer harm caused by price-fixing, and to secure significant fines for these serious criminal offences."

The charges are the first to arise from the Bureau's investigation into price-fixing cartel in the polyurethane foam industry. Anyone with information relating to this investigation is encouraged to contact the Competition Bureau.

The Bureau's investigation benefitted from cooperation under the Bureau's Immunity and Leniency Programs, which create incentives for parties to address their criminal liability by cooperating with the Bureau in its ongoing investigation and prosecution of other alleged cartel participants.

Under the Competition Act, an agreement between competitors to fix prices, allocate markets or restrict output in Canada is a criminal offence. In March 2010, amendments to the conspiracy provision of the Act came into force. For further information regarding the polyurethane foam cartel and the conspiracy provision of the Act, please consult our backgrounder.

The Competition Bureau, as an independent law enforcement agency, ensures that Canadian businesses and consumers prosper in a competitive and innovative marketplace.

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