Information requests from private parties in proceedings for recovery of loss or damages

I. Introduction

Under section 36 of the Competition Act ("Act"), private parties can commence proceedings to recover loss or damages incurred as a result of conduct contrary to Part VI of the Act or the failure of any person to comply with an order of the Competition Tribunal or a court under the Act.^{Footnote 1} Section 36 of the Act is intended to foster the ability of victims to recover any loss or damage they may have suffered as a result of anti‑competitive conduct. The Competition Bureau ("Bureau") views private actions under section 36 of the Act as an additional and important enforcement mechanism, separate and independent from its administration and enforcement of the Act. Section 36 of the Act serves not only the private interests of consumers to recover losses or damages but also the broader public interest of deterrence.

Persons contemplating, or who are parties in, proceedings under section 36 may believe that the Bureau possesses information that could be relevant to these proceedings. In this regard, the Bureau has received requests for such information, particularly from private parties involved in class proceedings in Canada. This Bulletin outlines the Bureau’s general position in administering and enforcing the Act with respect to requests for access to information in the Bureau’s possession or control from persons contemplating, or who are parties in, proceedings under section 36 of the Act.^{Footnote 2} This Bulletin also discusses the Bureau’s general basis for its position. This Bulletin supplements the "Private Actions for Damages" section of the Bureau’s Information Bulletin, "Communication of Confidential Information under the Competition Act."^{Footnote 3}

II. Bureau’s general position

To protect the integrity of the Bureau’s investigative process and the confidentiality of information in its possession, it is the Bureau’s general position to not voluntarily provide information to persons contemplating, or who are parties to, proceedings under section 36 of the Act. As described more fully in this Bulletin, the Bureau relies heavily upon voluntarily provided information, and the Bureau’s ability to administer and enforce the Act would be seriously compromised if it could not provide persons who provide such information an assurance of confidentiality over the information it obtains and the person’s cooperation with the Bureau. Accordingly, if served with a subpoena, the Bureau will inform the information provider and oppose a subpoena for production of information if compliance would potentially interfere with an ongoing examination, inquiry or enforcement proceeding or otherwise adversely affect the administration or enforcement of the Act. If the Bureau's opposition is unsuccessful, it will seek protective court orders to maintain the confidentiality of the information in question.^{Footnote 4‑Footnote 5}

The Bureau’s general position is important to prevent interference with ongoing examinations, inquiries or enforcement proceedings and to maintain the confidentiality of information the Bureau receives pursuant to the Act, as described more fully below.

III. Preventing interference with ongoing examinations, inquiries or enforcement proceedings

The production of information in the Bureau’s possession or control during an ongoing examination, inquiry or enforcement proceeding under the Act would potentially interfere with the ongoing examination, inquiry or enforcement proceeding. Accordingly, such production would adversely affect the Bureau’s ability to administer and enforce the Act.

IV. Importance of confidentiality for the Bureau’s administration and enforcement of the Act

Confidentiality is a governing principle of the Bureau’s approach to the administration and enforcement of the Act. The principle of confidentiality remains important whether the request for information relates to an ongoing or closed examination, inquiry or enforcement proceedings.

The Bureau has a statutory duty to conduct its inquiries in private and to maintain the confidentiality of information it receives pursuant to the Act.^{Footnote 6} In addition to its statutory obligations, the Bureau’s ability to administer and enforce the Act is affected by its ability to maintain confidentiality of the information it obtains. This importance holds two dimensions:

First, the Commissioner and Bureau personnel require a substantial amount of information from a variety of sources so that examinations, inquiries and enforcement proceedings pursuant to the Act can be effectively conducted. The Bureau relies heavily on information that is voluntarily provided, which is frequently confidential, proprietary and/or commercially sensitive. The Bureau’s ability to provide persons who voluntarily provide information an assurance of confidentiality under the Act makes them more willing to cooperate with the Bureau and provide information the Bureau requires to effectively fulfil its mandate.^{Footnote 7}

In addition, whistleblowers, immunity and leniency applicants, other confidential informants and market participants are often reluctant to cooperate with Bureau investigations for fear of reprisal from the subjects of Bureau investigations and others. The Bureau’s ability to properly conduct its investigations would be seriously compromised if the Bureau could not provide these persons with an assurance of confidentiality over the information it obtains and the person’s cooperation with the Bureau.^{Footnote 8}

Second, as noted, information provided to the Bureau is often confidential, proprietary and/or commercially sensitive. Disclosure of such information, particularly where competitors of the person(s) who provided such information can access it, undermines the goals of the Act and frustrates its purpose of promoting competition and protecting consumers.

V. Public interest privilege

The Bureau will rely upon applicable privileges to protect against the disclosure of information in its possession or control, including public interest privilege.

Public interest privilege protects against the disclosure of information possessed by government where such disclosure is not in the public interest.^{Footnote 9} Public interest privilege in the context of the Act has developed in its own unique way and is well established.^{Footnote 10} In this regard, a class‑based public interest privilege attaches to information collected or created by the Bureau during the course of an examination, inquiry or enforcement proceeding.^{Footnote 11}

Class-privilege results in a prima facie presumption of inadmissibility over a class of documents (and therefore the documents are not subject to disclosure) because of an overriding policy reason to exclude it.^{Footnote 12} As discussed above, it is in the public interest to maintain confidentiality of information collected or created by the Bureau during an examination, inquiry or enforcement proceeding.^{Footnote 13} Consequently, the onus on a person attempting to override a class privilege is heavy.^{Footnote 14} In the context of the Act, a party is required to show "compelling circumstances" or "a compelling competing interest", such as impairment of a respondent’s ability to answer the case against it, although it would be "difficult to conceive of a situation" where this would be the case.^{Footnote 15}

Public interest privilege applies to information collected by the Bureau during the course of an examination or inquiry, whether in enforcement proceedings under the Act or private actions under section 36 of the Act.^{Footnote 16} In other words, there is no distinction in principle in the application of public interest privilege between an enforcement proceeding under the Act and a private action under section 36 of the Act.^{Footnote 17}

The Bureau recognizes that section 29(1) of the Act contains an exception to the non-communication of information in the Bureau’s possession or control where the communication is for the purposes of the administration or enforcement of that Act, and that proceedings commenced under section 36 of the Act fall within that exception.^{Footnote 18} However, the Bureau’s position is that this exception does not restrict or otherwise impact the application of public interest privilege to information in the Bureau’s possession or control. The Courts have consistently found that neither section 29 nor section 36 of the Act serve as a basis for compelling the Bureau to disclose information in its possession or control.^{Footnote 19} Private plaintiffs in proceedings commenced under section 36 of the Act, despite their private enforcement of the Act, are not in the same position as the Commissioner, and are accordingly not entitled to the same information that the Bureau has in its possession or control.^{Footnote 20}

VI. Bureau’s financial and opportunity costs

The Bureau’s position is that its financial and opportunity costs arising from responding to a request for information ought to be taken into account by persons requesting information from the Bureau and by the Courts when disposing of such requests.

Information sought from the Bureau, particularly from parties in class proceedings under section 36 of the Act, is typically voluminous. Responding to such requests is time-consuming and requires the Bureau to incur considerable costs. The costs to the Bureau are considerable in terms of the financial and human capital costs involved in responding to the request for information and relate, not only to direct costs, but opportunity costs.^{Footnote 21} It can take considerable time to find, examine, classify and, if required, redact documents. Even if salary and overhead costs are repaid, the Bureau employees and counsel will not be available to carry out the Bureau’s public interest mandate. The Bureau’s position is that this would be contrary to the public interest.

VII. Conclusion

The Bureau recognizes the importance of private actions under section 36 of the Act as a tool for victims of anti‑competitive conduct to recover any loss or damage they may have suffered. However, pursuant to its administration and enforcement the Act and in order to protect the integrity of its investigative process and the confidentiality of information in its possession, the Bureau’s general position is to not voluntarily provide information to persons contemplating or who are parties to a proceeding under section 36 of the Act.