01/06/2012 09:57 EST | Updated 03/07/2012 05:12 EST

Fines of $12.5M levied in price-fixing conspiracy case

OTTAWA - The Competition Bureau says two companies have pleaded guilty to fixing prices for polyurethane foam and have been fined a total of $12.5 million.

The agency says Domfoam International Inc., and its affiliate, Valle Foam Industries (1995) Inc., pleaded guilty on Thursday to conspiracy under the Competition Act.

The companies admitted they agreed with competitors to fix prices for foam produced at plants in Brampton, Ont., Delta, B.C., and Montreal.

The charges are the first to arise from a bureau investigation into price-fixing in the foam industry and the first laid under amendments to the conspiracy law passed in 2010.

The price-fixing scheme played out over 11 years.

The foam is used primarily in bedding, furniture and carpet underlay.

"Yesterday's guilty plea is the first conviction under Canada's amended conspiracy law," said Melanie Aitken, the commissioner of competition.

"This investigation highlights the bureau's reinvigorated mandate to stop consumer harm caused by price-fixing, and to secure significant fines for these serious criminal offences."