Competition Act Proceedings: Will Your Confidential Information Be Protected?

A recent decision of the Ontario Superior Court of Justice provides a reminder that, despite the confidentiality protections provided by section 29 of the Competition Act (Act), any information provided to the Competition Bureau (Bureau), whether on a compulsory or voluntary basis, may be publicly disclosed if legal proceedings are commenced.

Background

In November 2010, the Commissioner of Competition (Commissioner) commenced legal proceedings against Rogers Communications Inc. and its subsidiary, Chatr Wireless Inc., for alleged misleading advertising under Section 74.01(1) of the Act. In her application, the Commissioner objects to representations that Chatr has "fewer dropped calls than the new wireless carriers" and seeks various orders against Rogers, including an administrative monetary penalty of $10 million.

As a preliminary matter, the Commissioner moved for an order that the confidential and commercially-sensitive information obtained as part of the Bureau’s investigation be kept confidential and not shared or disseminated before, during or after the hearing of this application.

A sealing order was sought with respect to a limited number of documents which included information about: (i) dropped call rates; (ii) call volumes or geographic locations of calls; (iii) subscribers; (iv) financial information, including average revenue per user; (v) marketing plans or strategy; and (vi) competitively-sensitive, commercially-sensitive and proprietary information, all of which had been kept confidential prior to the proceeding.

Judgment

In deciding whether to grant the requested sealing order, the Court applied the two-part test set out by the Supreme Court of Canada in Sierra Club for determining whether a confidentiality order should be made. The Court reaffirmed that a confidentiality order should only be made when:

  1. the order is necessary to prevent a serious risk to the proper administration of justice because reasonably alternative measures will not prevent the risk; and
  2. the salutary effects of the publication ban outweigh the deleterious effects on the rights and interests of the parties and the public, including the effects on the right to free expression, the right of the accused to a fair public trial and the efficacy of the administration of justice.

Applying these principles, the Court allowed the Commissioner’s application to seal the marketing and strategic information collected from other wireless carriers, but refused to grant the order with respect to the dropped call rates.

The Court found that the sealing order was necessary to prevent a serious risk to the proper administration of justice. The Court agreed with the Bureau’s submission that its ability to access information depended upon its ability to provide an assurance of confidentiality to the party providing it. The Court was satisfied that the order requested was necessary to prevent the risk that public disclosure of confidential information would discourage corporations from voluntarily cooperating with the Bureau.

With respect to the second branch of the Sierra Club test, the Court found that dropped call rates were of fundamental importance to the Commissioner’s application. If this information were sealed, it would result in a significant portion of the hearing which deals with the heart of the Commissioner’s application being closed to the public. Since the public has an interest in determining that the Court’s decision was made after a proper inquiry into the merits, the Court held that the deleterious effects on the right of the public to know whether the Commissioner’s complaint was well-founded and the public interest in the administration of justice outweighed the salutary effect of the proposed sealing order. Accordingly, the Commissioner’s request to seal the dropped call rates information was denied.

As for the other information for which protection was sought, the Court agreed to seal it as it was not central to the Commissioner’s application. As a result, the Court was satisfied that the deleterious effects of sealing this information would not outweigh its beneficial effects on confidentiality, which is important to the Commissioner’s interests.

Dealing specifically with the expectations of third parties, the Court noted that the assurances given by the Bureau and the Commissioner with respect to confidentiality are well-known and described in the Bureau’s 2007 Information Bulletin on the Communication of Confidential Information under the Competition Act (Bulletin). The Bulletin acknowledges that section 29 of the Act is intended to draw under its protection nearly all information that is provided to or obtained by the Bureau, and that the Bureau will make every effort to protect the information from disclosure, including applying for confidentiality or sealing orders. The Bulletin recognizes however, that a sealing order is ultimately under the control of the courts and, makes it clear that the legislative scheme under which the Bureau operates creates a risk that confidential information may be communicated when proceedings are initiated.

McCarthy Tétrault Notes

Pursuant to section 29 of the Act, confidential information provided to the Bureau is protected and will not be voluntarily disclosed by the Bureau in the context of an investigation. However, as shown by this decision, confidentiality is not entirely in the Bureau’s control and confidential information may become public if the Court refuses to grant the protective orders sought. Anyone providing information to the Bureau must therefore be aware of the risk that this information may be publicly disclosed when proceedings are initiated by the Commissioner.

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