Managing your compliance program: competition governance for employers

Rebecca Wagner (00:05): Hi, everyone. Thank you for joining us today. I am Rebecca Wagner, a Senior Associate in the Torys Competition and Foreign Investment Review Group, and this is my colleague Eric Patenaude, who is also an Associate in the Group. Our topic today is competition law compliance programs. Compliance programs provide structure and a process to help companies maintain compliance with competition law. They are an important tool to minimize risk. The cost of violations can be high, and even the mere suspicion of a violation can on its own be costly. Even if ultimately dropped, investigations often distract management and lead to substantial expenditures of time and money.

Eric Patenaude (00:45): Recent amendments to the Competition Act underscore the importance of a program. For example, these new amendments significantly increase the maximum fines and penalties for criminal anti-competitive agreements, deceptive marketing practices and abuse of dominance. For corporations engaging in these activities, the penalties can now be as high as 3% of annual worldwide turnover, or in the case of criminal anti-competitive agreements, are now uncapped. In the wake of these and other amendments, the Competition Bureau has re-emphasized that businesses, regardless of size, should either implement a compliance program or update an existing one. The existence of a robust program can help limit exposure to these new maximum fines and penalties as well as jail time. So, Rebecca, what are some of the ways that a compliance program can help companies mitigate risk?

Rebecca Wagner (01:37): Well, for example, they can help to prevent violations, decrease the amount of a fine or penalty, or assist with early detection, which could lead to securing immunity or leniency from prosecution.

Eric Patenaude (01:50): Many good reasons to have a strong program.

Rebecca Wagner (01:52): Indeed. So how can in-house counsel or business leaders get started on creating or enhancing their program?

Eric Patenaude (01:59): Sure. The Competition Bureau focuses on two key program criteria: credibility and effectiveness. The mere existence of a program does not offer much in the way of protection or leniency. And it's worth noting that having a program that's ill-supported or routinely ignored may be viewed by the Bureau as an aggravating factor.

Rebecca Wagner (02:18): This naturally leads into a discussion about the elements that make up a credible and effective program. Unsurprisingly, there are many, too many to touch on in this video. But four of the key highlights are commitment and support, a compliance manual, a training program, and auditing and monitoring. Beginning with commitment and support, compliance starts with leadership from the top. Active management involvement is the foundation of an effective program. It is essential that senior leadership demonstrate unequivocal support for the program and regularly reinforce this message. Why don't you touch on the second and third topics?

Eric Patenaude (02:56): Happy to. A compliance manual and training program are central elements. Both the compliance manual and the training program should be tailored to reflect the particulars of the business and be appropriately detailed, but also be user-friendly for all company employees. What about auditing and monitoring?

Rebecca Wagner (03:15): Auditing and monitoring of measures implemented is important and often overlooked. One example is tracking training participation and quiz results. Another is providing additional training based on the quiz results and related employee Q&A.

Eric Patenaude (03:30): Thanks. And the third would be enhanced measures for high-risk employees and high-risk activities such as representations to the public, bids, or participation in trade associations. There's a lot more to discuss, but why don't we wrap up on a few key takeaways? First, Bureau guidance highlights that effective training is best delivered by experts and recommends an overall review of the program by an independent third party.

Rebecca Wagner (03:56): Businesses operating in Canada may wish to work with an experienced team of legal advisers to implement or evaluate their competition law compliance program to ensure it is credible and effective.