Effective today, an individual convicted of certain violations of the Competition Act (Canada) may be punished with prison time instead of community service. These offences include price-fixing, bid-rigging and misleading advertising. For more information please see Norton Rose’s Legal Update on the topic prepared by our colleague Stephen Nattrass here.
Merging parties should take note of these amendments because parties that start coordinating their businesses before the completion of the merger could be in violation of the Competition Act (Canada). This means that parties to an M&A transaction should not, pre-closing, agree with their counterparty on prices to be charged, dividing up customers (either specific accounts or by geographic territory), or to restrict output. Parties must maintain a regular competitive mindset until closing has occurred because until such time, they remain competitors. Any pre-closing anti-competitive behaviour could land the parties in hot water. Parties who are uncertain as to whether their pre-closing behaviour might be offside the Competition Act (Canada) should consult with an anti-trust specialist in advance.