Ontario and Quebec gas companies plead guilty to price fixing

Despite the difficulties in detecting and proving gas price fixing, a trend is developing as major gas companies are coming forward and pleading guilty, according to the Competition Bureau.

The bureau, an independent law enforcement agency, said Friday Suncor Energy Products Inc., or Sunoco, has pleaded guilty to adjusting retail gasoline prices during seven months in 2007 in Belleville, Ont.

The company faces a fine of $500,000 from the Ontario Superior Court.

"The fact that price fixing agreements are conducted in secret makes it extremely difficult to detect," said John Pecman, senior deputy commissioner of competition.

But, the bureau uses a variety of investigative tools to help with the detection.

In some of these cases it used its immunity program, which he says is usually the leading tool in investigations, to encourage companies and individuals — or "whistleblowers" — who have engaged in price fixing to bring forward information and evidence.

As an incentive to do so, they receive immunity from prosecution.

The Sunoco sentence is directly linked to a case announced last month, which involved Pioneer Energy LP, Canadian Tire Corp. and Mr. Gas, which all pleaded guilty to that same crime in Kingston and Brockville, Ont., and were fined a total of $2 million.

Gas price fixing occurs when competitors create "illegal agreements" in order to set prices and therefore "deny consumers the benefits of competitive prices and choice," said Melanie Aitken, the commissioner of competition, in a news release.

Similar cases, some involving managers and owners, have occurred across Quebec as well.

Since June 2008, charges were laid against 38 individuals and 14 companies in stations throughout Quebec, including Victoriaville, Thetford Mines, Magog and Sherbrooke.

Of those, 27 individuals and 14 companies pleaded guilty, resulting in fines of over $3 million. Six of those individuals have been sentenced to imprisonment with a total time of 54 months.

Whether or not a company gains a profit advantage by price-fixing does not serve as a factor in the conviction of the person or company in question, Pecman said.

"In this particular case, the agreement unduly lessened the competition, which means it had significant effects on the marketplace," he said, explaining that would be sufficient to demonstrate the offence.

Aitken added the bureau is "committed to pursuing those who engage in anti-competitive behaviour that harms Canadian businesses and consumers."

Original Article
Source: ottawa citizen
Author: Kyle Kipp