This Supreme Court of Canada decision provides a measure of
certainty to companies that intend to merge. It confirms the proper
analytical framework for "prevention" merger reviews
under the Competition Act, and the proper approach to the
"efficiencies defence" exception.
Tervita Corp. operates
two landfills for hazardous waste generated by oil and gas
operations in northeastern B.C. In February 2010, Tervita acquired
a company that held a permit for another landfill site. The
transaction attracted the attention of the Commissioner of
Competition, who initiated a merger review process, designed to
identify mergers that will have anti-competitive effects.
Ultimately, the Competition Tribunal ordered that Tervita divest
itself of the acquired company, holding that the merger was likely
to prevent competition and that Tervita did not bring itself within
the "efficiencies" exception.
A majority of the Supreme Court of Canada set aside the
divestiture order. In doing so, the Court held that a two-stage,
forwarding-looking "but for" market condition analysis
should be used to determine if a merger prevents or lessens, or is
likely to prevent or lessen, competition substantially. The first
step is to identify the potential competitor (typically one of the
merged parties). It then must be determined if "but for"
the merger, the potential competitor would have likely entered the
market and decreased the market power of the acquiring firm. The
timeframe for likely entry must be discernable and based on
evidence of when the potential competitor was realistically
expected to enter the market in absence of the merger. The Court
emphasized that, in performing this analysis, speculation is
improper and mere possibilities are insufficient.
The Court also
confirmed that the proper approach to the "efficiencies
defence" is a balancing test, requiring analysis of whether
the quantitative and qualitative efficiency gains of the merger
outweigh the anticompetitive effects. The Tribunal has flexibility
to choose an appropriate methodology, but the approach should be
objectively reasonable, quantifying all effects that are
realistically measurable and ensuring that the estimates provided
are grounded in the evidence.
The Imperial Oil refinery pled guilty to one offence for discharging a contaminant, coker stabilizer, thermocracked gas, into the natural environment causing an adverse effect and was fined $650,000...
Ontario's Ministry of the Environment and Climate Change continues to roll out its Climate Change Action Plan with its proposed GHG guide for projects that are subject to the province's Environmental Assessment Act.
In June, 2016, Justice Faieta of the Ontario Superior Court of Justice awarded damages of $57,712.31 plus interest against legal counsel who failed to file a claim within the required limitation period.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).