Industry Canada

Industry Canada
Competition Bureau Canada

Competition Bureau Canada

August 28, 2006 11:04 ET

Competition Bureau Obtains Prohibition Order Against Sotheby's and Sotheby's "Canada" Inc.

OTTAWA, ONTARIO--(CCNMatthews - Aug. 28, 2006) - The Competition Bureau today obtained a Prohibition Order against the international auction house, Sotheby's, and its Canadian subsidiary, Sotheby's (Canada) Inc. following an investigation into an international price-fixing conspiracy and its effects on auction services supplied to Canadian clients.

The Order of the Federal Court of Canada prohibits Sotheby's, headquartered in New York, and Sotheby's Canada, based in Toronto, from committing any offence contrary to the conspiracy and foreign directives provisions of the Competition Act.

The Order also prohibits Sotheby's and Sotheby's Canada from doing any act or thing directed toward the commission of an offence under sections 45 and 46 of the Act, and directs Sotheby's and Sotheby's Canada to maintain and implement compliance measures that will prevent any such future illegal activities. In addition, Sotheby's will post a notice of the Order on its Canadian Web page, and both companies will notify Canadian auction sellers in writing about the Court's Order and pay investigative costs, calculated by the Bureau at just under $800,000.

"The Court's Order addresses the Bureau's concerns that Canadian vendors benefit from competitive prices for international auction services," said Denyse MacKenzie, Senior Deputy Commissioner of Competition. "The Bureau's investigation focused on the harm this international conspiracy inflicted on Canadians."

The companies must also educate their directors, officers, employees and agents about complying with the Competition Act and for five years, each company must provide written proof to the Commissioner of Competition of compliance with the Prohibition Order. They must also provide to the Commissioner any additional information or records requested for the purpose of monitoring compliance with the Order.

The Bureau's inquiry concerned an international conspiracy to suppress and eliminate competition by fixing auction commission rates, and the effects this conspiracy may have had on Canadian auction sellers between April 1993 and February 2000. Bureau investigators determined that Canadians may have been induced by Sotheby's and Sotheby's Canada to consign their property to auctions in the U.S. and elsewhere for sales subject to the fixed commission rates set by the illegal cartel. No evidence was uncovered that the conspiracy affected auctions held in Canada.

Under section 45 of the Competition Act, it is a criminal offence for competitors to unduly lessen competition in a market by agreeing on prices they will charge their customers. Section 46 of the Act makes it a criminal offence for a company carrying on business in Canada to implement any foreign directive intended to give effect to a conspiracy entered into outside of Canada that would contravene section 45.

The Competition Bureau is an independent law enforcement agency that promotes and maintains fair competition so that all Canadians can benefit from competitive prices, product choice and quality services. It oversees the application of the Competition Act, the Consumer Packaging and Labelling Act, the Textile Labelling Act and the Precious Metals Marking Act.

Contact Information

  • Media Enquiries:
    External Relations and Public Affairs Branch
    Maureen McGrath
    Communications Advisor
    (819) 953-8982
    General Enquiries:
    Competition Bureau
    Information Centre
    (819) 997-4282