Commissioner of Competition continues to pursue second-generation cooperation agreements: Recent developments

  • June 09, 2017
  • Subrata Bhattacharjee and Gregory McLean


The international antitrust community has witnessed a recent expansion of so-called second-generation cooperation agreements between national competition authorities. The key distinguishing feature of these agreements (as opposed to their first-generation counterparts) is that they authorize the signing authorities to exchange confidential information without obtaining consent from the source of that information. Globally, second-generation agreements were first entered into between Australia and the United States in 1999, and then between Scandinavian countries in 2001. In 2013, the number of agreements further expanded: New Zealand-Australia and European Union-Switzerland agreements were entered into in 2013, and an Australia-Japan agreement was entered into in 2015.Footnote1

Canada is also pursuing second generation cooperation. The Commissioner of Competition  has entered into two such agreements – one with the New Zealand Commerce Commission on April 12, 2016Footnote2, and another with the Japan Fair Trade Commission on May 11, 2017.Footnote3 He has also announced that negotiations with European authorities for second-generation cooperation are underwayFootnote4, and the pursuit of these agreements was cited as a priority for the Competition Bureau in its 2017-2018 Annual Plan.Footnote5 The Commissioner’s position is that his authority to disclose information without the consent of its source stems from section 29 of the Act, which permits him to disclose information “for the purposes of the administration or enforcement” of the Act.Footnote6

It is worth comparing the terms of the two second-generation agreements entered into by the Commissioner.

The NZCC and JFTC agreements

Information provided by Immunity/Leniency applicants

Generally speaking, the NZCC and JFTC agreements authorize the Commissioner to disclose to the other authority “any information in [his] possession or control” without the consent of the source of that information.

The JFTC agreement, however, expressly prohibits authorities from disclosing “information obtained under an application for immunity or leniency” without that applicant’s consent. While this express carve-out is encouraging for immunity/leniency applicants, it is notably absent from the agreement with the NZCC. Nevertheless, this carve-out is likely implied, as the NZCC agreement requires the Commissioner to provide information in accordance with his “policies, guidelines, or practices.” Because the Bureau’s guidelines indicate that information provided by an immunity/leniency applicant will not be disclosed to a foreign agency without the applicant’s consent, disclosure to the NZCC of an applicant’s information in the absence of a waiver would not be expected.

It is unclear why the NZCC and JFTC agreements are different in this respect, but the inclusion of express carve-out language in future agreements would enhance certainty and predictability for prospective program applicants. Further, in any revised program documents published by the Bureau following its review of its immunity/leniency programs, it is expected that the Bureau will have to clarify its policy with respect to waivers of confidentiality in light of existing and future second-generation agreements.

Privileged information

Another notable difference between the Commissioner’s agreements with the NZCC and JFTC is that the former contains express protections for privileged information, while the latter does not. To be more specific, the NZCC agreement provides that where privileged information is shared, the sharing authority will not be regarded as having waived that privilege (a non-waiver provision) and the recipient will treat information confidentially and (to the fullest extent possible) refrain from further disclosing the information without the sharing authority’s consent. The JFTC agreement does not contain an equivalent provision.

While the laws of privilege in New Zealand and Japan may differ, any future agreement that governs disclosure of information by the Commissioner (which may be protected in Canada from disclosure to third parties on public interest privilege grounds) to foreign authorities should include a non-waiver provision. Even if non-waiver protections are implied, the express inclusion of such protections would provide greater comfort to potential cooperants under the Bureau’s immunity/leniency programs.

Going forward

Though agencies find second-generation cooperation agreements to be a useful addition to existing methods of coordination and information gathering with foreign counterparts, significant issues remain to be considered. From a practical perspective, the most recent second-generation initiatives come at a time when the Commissioner is also considering significant changes to the Canadian immunity and leniency programs. The interaction between those programs (and in particular, treatment of confidential information and use of waivers) and second-generation cooperation should obviously be considered. Further, there are substantive differences between second-generation agreements, which means that each agreement needs to be reviewed on its own terms, as evidenced by the differences between the Commissioner’s agreements with the NZCC and JFTC. At a time when stakeholders are keenly concerned about maintaining the attractiveness of the Bureau’s immunity and leniency programs, consideration of such issues remains vital.

Subrata Bhattacharjee and Gregory McLean are with Borden Ladner Gervais LLP