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CCCA_V7No4_CompetitionLaw-FIN_CCCA 13-11-25 12:54 PM Page 30 Feature Breed. In 2012, AU Optronics, a Taiwanese tech manufacturer management ought to be involved in both the approval and fought charges that it had been involved in a price-fixing conspir- enforcement of its policies, starting with the CEO. “Senior man- acy and was fined $500-million (U.S.) agement needs to have responsibility for the oversight and assur- Under new conspiracy provisions of Canada’s Competition Act, ance of the implementation of the program,” says Breed. the maximum term of imprisonment is now 14 years per count For ethics and compliance to become part of a company’s charged. What’s more, the Criminal Code prevents judges from DNA, it helps to set the tone at the very top. For a culture of granting conditional or absolute discharges for breaches that compliance to truly take hold, however, middle managers must carry that heavy a sentence. Those include bid-rigging or crim- also be committed to the company’s values, a point raised by inal misleading advertising cases. Janet Bolton, senior counsel, AML, compliance and regulatory affairs at TD Bank Financial Group. “In an organization as big as a For ethics and compliance to bank — we have something in the order of 80,000 employees — it’s become part of a company’s actually tone in the middle that starts to become the focus. Because DNA, it helps to set the tone at the top, there’s a very small num- at the very top. ber of people and they’re all pretty sophisticated, learned people. And then at the lower end we have peo- ple who are part-time workers, who Finally, there is the risk of class actions, which in Canada can are going through school and are really new to the job force. But be launched within two years of the end of the criminal conduct. in the middle is where we have to make sure we’ve got an ade- A company then faces compensatory damages — not to men- quate governance and communications structure to make sure tion the reputational hit it will sustain which is much harder to nothing gets lost.” quantify. Complicating matters further for businesses, the Encourage internal whistleblowing direct purchasers — to sue businesses for alleged breaches of the 2 In May 2013, John Pecman, now Commissioner of Supreme Court of Canada recently confirmed, in a trilogy of decisions the right of “indirect purchasers” — i.e. the end con- sumers who come after the wholesalers, distributors and other Competition, announced the launch of the Competition Bureau’s whistleblowing initiative. It Competition Act. The three cases, Sun-Rype Products Ltd. v. Archer aims to encourage the general public and business community to Daniels Midland Co. and Pro-Sys Consultants Ltd. v. Microsoft Corp. report suspected incidences of anti-competitive pricing activity. and Samsung Electronics v. Option consommateurs all dealt with Organizations, however, would prefer that employees raise price-fixing charges. concerns internally to minimize exposure to damages. “We The Competition Bureau has several enforcement tools at its would never say to someone ‘no, no, you can’t go to an external disposal to investigate anti-competitive activity, from orchestrat- regulator,’” says Bolton. She argues that the company is ultimate- ing dawn raids to referring criminal matters to the Attorney- ly better positioned to understand the products, the business and General. However, the Bureau is inclined to recommend lenien- to see whether there’s a genuine concern worth raising with the cy for those companies that step forward and confess to anti- Bureau. “The goal, internally, is to make the internal whistle- competitive behaviour, including by employees gone rogue. blowing process as comfortable and accessible as we can, so that A panel of lawyers drawn from various backgrounds shared in a market for whistleblowers people will choose us first as their tips on how to design and implement an effective compe- opposed to the regulator.” tition law compliance regime. Here is their advice: Take a risk-based approach to training 3 1 Set the tone at the top — and the middle. Bolton advocates taking a risk-based approach. “You can’t train How does one run an effective compliance program Corporate counsel like to debate who should lead the when a company has thousands — make that tens of thousands of employees — carrying out its business? compliance function: the chief legal officer or an inde- pendent chief compliance officer? In fact, all of senior 30 CCCA Canadian Corporate Counsel Association WINTER 2013