On June 3, the Competition Tribunal granted an interim
injunction requiring Parkland Industries to preserve and "hold
separate" six gas stations and eight supply agreements that it
proposes to acquire from Pioneer. The decision represents a partial
victory for the Commissioner of Competition as it relates to six of
14 markets where the Commissioner was seeking an order.1
What You Need To Know
The decision notably marks the first time the Commissioner was
able to obtain an interim injunction preventing the integration of
part of an acquired business on the grounds that there would be
adverse impact on consumers if those assets were merged.
The Tribunal concluded that there had to be "clear and
non-speculative evidence" of "irreparable harm"
before such an interim order would be made. In this case, the
Tribunal concluded that the Commissioner advanced no such evidence
on threshold issues such as market definition in eight of the 14
contested markets. The Tribunal commented that injunction
proceedings that are made after an extensive merger review require
the Commissioner to advance more compelling evidence when
challenging a transaction. Although the Tribunal found that both
the Commissioner's and Parkland's expert evidence were
lacking in certain respects, it concluded that there was sufficient
evidence of likely increases in market shares and concentration in
six of the relevant markets to justify the Commissioner's
allegations of apprehended harm and, therefore, an interim
The decision emphasizes the need for both the Commissioner (and
merger parties) to identify robust evidence and develop a
persuasive economic analysis at the outset of litigation. Although
the Tribunal will not "delve too deeply into the merits of the
case" at the interim injunction stage, "the Commissioner
should possess evidence supporting fundamental elements of his
merger review beginning with market definition and market
concentration, when those are pivotal to his case."
Ironically, the Tribunal's conclusion in Parkland was (in part)
based not on evidence from the Commissioner, but on evidence from
an expert retained by Parkland attesting that there were "high
concentration levels" and "competition concerns" in
the six markets covered by the order.
Also notable is that an 11th-hour offer by Parkland to resolve
concerns by divesting assets in certain markets was rejected by the
Tribunal as inadequate to address the concerns raised by the
Commissioner in his injunction application. A remedy may obviate
the need for an interim order, but only where parties can persuade
the Tribunal that the proposal is "viable and
1 Further background on the transaction and the
Commissioner's challenge can be found in our earlier bulletin
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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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