Cartels in Canada
March 16, 2016
Cartels exist in Canada and they’re not just about drug trafficking and organized crime.
Cartels are toxic to the open market economy. They destroy competition and cause serious harm to our economy and consumers. A cartel is formed when businesses agree to act together instead of competing with each other. Cartels are harmful because they typically result in higher prices for consumers. They also reduce the incentive for companies to be innovative and come up with a greater variety of products and services.
By its nature, a cartel is secret and therefore difficult to uncover. It is a conspiracy that can be regional, national or international in scope. For example, a cartel can consist of a loose verbal arrangement entered into by a group of local business people during a dinner conversation. Alternatively, the agreement might take the form of a highly structured set of rules established and administered through an elaborate monitoring and enforcement regime.
Cartel members may conspire to:
- fix the price of goods or services;
- allocate sales, customers or markets among themselves;
- limit the production or supply of goods or services; or
- rig bids or tenders submitted in a tendering process.
What you don’t know about cartels can hurt you. Business owners and employees may not be aware that these kinds of agreements are illegal under the Competition Act—and can result in fines, jail time or both.
If you’ve been involved in a cartel, you should contact the Competition Bureau as soon as possible. You could be eligible for immunity from prosecution if you are first to report the offence. Others who self‑report early in the Bureau’s investigation may qualify for leniency.
Visit the Bureau’s website to learn more about cartels and the tools that are available to help protect you and your business.
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