June Antitrust Bulletin

June 10, 2013

Canadian Competition Bureau Launches Criminal Cartel Whistleblowing Initiative

On May 28, 2013, the Canadian Competition Bureau (the Bureau) launched the Criminal Cartel Whistleblowing Initiative, which is designed to enable members of the public to provide information to the Bureau regarding possible violations of the criminal cartel provisions of the Competition Act. As part of this initiative, the Bureau has created a hotline for whistleblowers to report potential violations and whistleblowers can choose how much personal information to provide to the Bureau. If the whistleblower reports anonymously, however, the Bureau warns that it may be impossible to respond to the report or provide the whistleblower the protections to which he or she otherwise would be entitled. If the whistleblower chooses to reveal his or her identity, the Bureau will keep the individual’s identity confidential, but the whistleblower may be asked to testify in court. According to John Pecman, the Interim Competition Commissioner of the Bureau, the initiative is expected to support increased reporting of anticompetitive behavior, while simultaneously protecting the individuals who report it.

Fourth Circuit Narrowly Interprets State Action Exemption

On May 31, 2013, the 4th Circuit ruled in favor of the Federal Trade Commission that the state action doctrine did not immunize efforts by North Carolina’s State Board of Dental Examiners (the Board) to prohibit nondentists from offering teeth whitening services. The FTC had previously ruled that the North Carolina Board’s actions had a tendency to harm competition by resulting in higher prices and less consumer choice. On appeal to the 4th Circuit, the Board argued that because the dental board was an entity created by state law and given the authority to regulate the practice of dentistry, the state action doctrine applied. The 4th Circuit, however, ruled that there was not sufficient state supervision to qualify for antitrust immunity under the state action doctrine. The 4th Circuit also affirmed the FTC’s ruling in all other respects.

DOJ Approves Use of Predictive Coding to Satisfy Document Demand

The U.S. Department of Justice Antitrust Division recently announced that it would permit the use of predictive coding to respond to a document demand in connection with the proposed merger of Anheuser-Busch InBev NV and Grupo Modelo SAB. Predictive coding uses computer algorithms to identify responsive documents instead of having each document individually reviewed by attorneys. The process begins with the predictive coding tool creating a randomized subset of the documents to be reviewed, called a “seed set.” Attorneys familiar with the facts then review the seed set for responsiveness, and the results of that review are used to train the computer to identify documents in the larger set that are also potentially responsive. In this case, the use of predictive coding reportedly cost the parties 50 percent less than a traditional document review would have cost.

Real Estate Investors Sentenced for Rigging Bids at Real Estate Foreclosure Auctions

On May 20, 2013, the Department of Justice Antitrust Division announced that two Alabama real estate investors had been sentenced to 20 months in prison for their involvement in a bid-rigging and mail fraud scheme involving public real estate foreclosure auctions. The individuals and their company pleaded guilty in December 2012 to conspiring with other companies not to bid against each other at public foreclosure auctions in southern Alabama. Pursuant to the conspiracy, a designated bidder would purchase the property at auction. Thereafter, the conspirators would hold a second, secret auction at which the price paid for the real estate was higher than the price paid at the public auction. The individuals and their company were ordered to pay $21,983 in restitution to the victims of the crime.

EU/UK Competition Law

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