Report from the Commission to the Council and the European Parliament on the application of the Agreement between the European Communities and the Government of Canada regarding the application of their competition laws - 17 June 1999 to 31 December 1999
Date: 2000-10-13
Institutions: European Commission
Subjects: Canada, agreement (EU), competition law, control of restrictive practices, economic cooperation

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 13.10.2000
COM(2000) 645 final

REPORT FROM THE COMMISSION TO
THE COUNCIL AND THE EUROPEAN PARLIAMENT
ON THE APPLICATION OF THE

Agreement between
the European Communities and
the Government of Canada
regarding the application of their competition laws

17 June 1999 to 31 December 1999

1.

INTRODUCTION

On 17 June 1999 the European Commission concluded an Agreement with the Government of
Canada regarding the application of their competition laws 1 ("the Agreement"), the aim of
which is to promote cooperation between the competition authorities. By a joint decision of
the Council and the Commission of 29 April 19992 the Agreement was approved. The
Agreement was applicable from the date it was signed. The exchange of letters referred to in
the Agreement was deemed to have taken place implicitly with the act of signature since they
form an integral part of the Agreement.

The period covered by this first report is relatively short and therefore in many instances it has
not been possible to identify significant trends or to draw definite conclusions.

Many of the cases notified during the period under review are still open, particularly matters
falling under Articles 81 and 82 of the EC Treaty and, therefore, it is not possible to discuss
them in detail or to mention them by name, save where they have already been the subject of
a Commission statement or notice.

At the same time, merger cases, which gave rise to notifications and cooperation under the
Agreement, are now mostly closed because of the strict deadlines applied under the Merger
Regulation3 and these can therefore be discussed in this report.

In addition,
the confidentiality surrounding Canadian procedures, and the obligation of
confidentiality to which the European Communities are subject by virtue of Article X of the
that even where the European Commission has completed its
Agreement, has meant
investigation and closed cases, references to specific cases which are still being pursued by
the Canadian authorities, or are otherwise covered by confidentiality requirements, have had
to be limited.

Despite these limitations, it is intended that this report will give some sense of the nature and
degree of cooperation between the Commission and the Canadian Competition Bureau.

2.

THE AGREEMENT

As a brief reminder, the main provisions of the Agreement include:

•

1

2

3

notification of cases handled by the competition authorities of one Party, when these cases
concern the important interests of the other Party (Article II), and exchange of information
on general matters relating to the implementation of the competition rules (Article III);

Agreement between the European Communities and the Government of Canada regarding the
application of their competition laws, OJ L 175 of 10.07.1999, pp. 50-60.
Council and Commission Decision of 29 April 1999, OJ L 175 of 10.07.1999, p. 49.
Council Regulation (EEC) No. 4064/89 of 21 December 1989 on the control of concentrations between
undertakings, OJ L 395, 30.12.1989, p. 1; as corrected in OJ L 257, 21.9.1990, p. 13 and as amended by
Council Regulation (EC) No 1310/97 of June 1997.

2

•

•

•

cooperation and coordination of the actions of both Parties' competition authorities
(Article IV) ;

a "traditional comity" procedure by virtue of which each Party undertakes to take into
account the important interests of the other Party when it takes measures to enforce its
competition rules (Article VI);

a "positive comity" procedure by virtue of which either Party can invite the other Party to
take, on the basis of
regarding
anticompetitive behaviour implemented on its territory and which affects the important
interests of the requesting Party (Article V).

appropriate measures

legislation,

latter's

the

In addition, the Agreement makes clear that none of its provisions may be interpreted in a
manner which is inconsistent with the legislation in force in the European Communities and
Canada (Article XI). In particular, the competition authorities remain bound by their internal
rules regarding the protection of the confidentiality of information gathered by them during
their respective investigations (Article X).

3.

3.1.

NOTIFICATIONS

Number of cases notified4:

4

(EU);

3 (Canada)

Notifications were made by the Commission in four cases during the period between 17 June
1999 and 31 December 1999. During the same period, the Commission received notifications
from the Canadian Competition Bureau in three cases. Even though the number of
notifications might not appear very high, considering the short time of existence of the
Agreement and the quality of issues, the notifications have laid an important basis for
cooperation. In tendency, notifications by the Commission concerning merger cases are
increasing more rapidly than for other non-merger antitrust cases.

3.2.

Practical steps

During the period under review, the Commission took some practical steps to ensure that it
fulfills its obligations under the newly-concluded agreement, and in particular to ensure that
cases meeting the criteria for notification are duly notified.

To keep trace of notifications under the Agreement,
the database of notifications was
modified to record the details, in line with DG Competition’s policy of computerising its
work, wherever this brings efficiencies. This allows case handlers in the operational units to
feed into the database the information necessary to make a notification. The notifications
database does not, however, contain any of the confidential
information collected by
DG Competition during the investigation of the case, as this is contained in a file to which
access is restricted.

4

The figures given represent the number of cases in which notifications were made under Article II of
the Agreement. Notifications are made at a number of specified stages of the investigations and formal
procedure in a case. Therefore, the number of notifications can be higher.

3

3.3.

Notifications to the Member States

All notifications received by the Canadian Competition Bureau are copied to the Member
State or Member States whose interests might be affected, at the same time as they are
forwarded to the relevant units of DG Competition. Equally, at the same time that DG
Competition makes notifications to the Canadian Competition Bureau, copies are sent to the
Member State(s) whose interests are affected.

4.

COOPERATION

The Commission's experience of cooperation with its Canadian counterparts in individual
cases since June 17, 1999 has been very positive. However, as stated above, many of the cases
where there have been contacts are still under investigation, on one side or the other, and so
cannot be discussed.

The nature of cooperation depends on the individual case, and can relate to such matters as
simple enquiries regarding the timing of procedures or to coordination of the proposed
remedy in a case.

Moreover, the Canadian Competition Bureau and DG Competition of the Commission held
the first bilateral meeting under the Agreement on September 30, 1999. These bilateral
meetings are an important implementing activity pursuant to Article VIII of the Agreement.
The meeting took place in a friendly atmosphere and has confirmed the good basis for
developing further mutual cooperation. Its agenda included the implementation activities
undertaken by each Party after entry into force of the Agreement. The first notifications and
the ensuing cooperation were also the subject of a short appraisal. There were also detailed
discussions on important competition policy issues of common concern. With respect to
furthering cooperation activities, some ideas were presented by each side and it was agreed
these would be developed pragmatically on the basis of the experience with the
that
Agreement.

5.

SOME CASES

The first notification received from Canada on June 30, 1999 concerned an investigation on
the market for vitamins and related products. By the time of the first bilateral meeting, the
Canadian Competition Bureau had announced that the former Vice President – Sales of the
Chinook Group Ltd. of Toronto was sentenced to nine months imprisonment for his
participation in an extended international conspiracy to fix prices and allocate or share
markets for choline chloride.

An issue which had received considerable attention in Canada was the announced merger of
Onex/ Canada Airlines/ Air Canada that had also been notified to the Commission under the
merger regulation. The Commission itself notified the case to the Canadian Competition
Bureau on September 23, 1999. Pursuant to this the Canadian Competition Authority has
lodged a request for cooperation. At the time of the request, the Canadian Competition Bureau
had no jurisdiction over the case since the application of its competition law had been
suspended. Apart from that, discussions took place with a view to providing competition
policy advice on how to best promote competition in Canada’s airline industry. The

4

notification of the merger to the Commission was ultimately withdrawn, at the moment it
became clear that the transaction would not go ahead.

6.

CONCLUSION

The Agreement has had a successful start. It was up and running only a fortnight after its
signature and entry into force. Each of the cases on which cooperation has taken place have
proven to be of important interest to at least one of the Parties.

5