On 18 March 2005, the Canadian Competition Bureau announced the appointment of an advisory panel of experts to help assess the role that efficiencies should play in Canadian competition law.
The Bureau launched a broad consultation process in September 2004 to elicit views on the appropriate treatment of efficiencies under the Competition Act (see CLI 12 October 2004, p.12). That consultation process, involving roundtable discussions and written submissions from more than 40 interested parties, was nearing its end with the publication in late January 2005 of a report summarising their views.
Now it will be up to the advisory panel to sift through the results of the consultation, conduct its own research and prepare a written report to the Bureau by June 2005. The panel’s mandate focuses primarily on
(i) assessing the relevance of the different types of efficiencies, particularly dynamic efficiencies, in Canadian competition policy, and
(ii) ensuring that relevant efficiencies are properly addressed in the merger provisions of the Act.
The Bureau has asked the advisory panel to "consider the arguments which link the need for Canada’s approach to efficiencies in merger review to the nature of the Canadian economy."
This is apparently a reference to arguments that Canada’s small economy relative to its major trading partners justifies a particularly important role for efficiencies, including a specific "efficiencies" defence for anticompetitive mergers, in order to allow domestic companies to achieve scale economies and compete effectively on the international stage, particularly through increased exports.
In testing traditional justifications for the role of efficiencies, the advisory panel will consider how the Canadian economy has evolved since the current version of the Act was brought into force in 1986, notably with respect to:
trade liberalisation within NAFTA and the WTO
levels of foreign direct investment in Canada and outward investment from Canada
business size and concentration in Canada and internationally
productivity, technology and innovation
the institutionalisation and internationalisation of corporate ownership
The advisory panel consists of three experts with backgrounds in business, economic policy and trade. They are assisted by a private competition law practitioner, who will act as secretary to the panel.
Competition Bureau press release, "Commissioner Appoints Advisory Panel on Efficiencies," 18 March 2005 cb-bc.gc.ca/epic/internet/incb-bc.nsf/en/ct03070e.html The results of the consultation process, including a summary of stakeholder submissions, is available at www.primestrategies.ca/bureau/index.htm
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The Canadian Competition Bureau issued a template document for use as a form of Consent Agreement, to be filed with the Competition Tribunal to resolve concerns the Bureau may have with proposed mergers.
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