As part of its enforcement mandate, the Bureau reviews certain
proposed transactions to determine whether they will likely result
in a substantial lessening or prevention of competition in a
market. If the Bureau determines that the proposed transaction is
likely to result in substantial anti-competitive effects, the
Commissioner of Competition has the option to challenge the
proposed transaction before the Competition Tribunal or negotiate
appropriate remedial measures with the merging parties to address
the proposed transaction's likely anti-competitive effects.
Such negotiated remedial measures are typically implemented by way
of a consent agreement. Once registered with the Tribunal, the
consent agreement has the force and effect of a court order. The
Bureau, as well as merging parties, generally prefers to pursue
negotiated consent agreements rather than formal litigation before
the Tribunal, as Tribunal litigation is more costly, time-consuming
and uncertain for both the Bureau and the merging parties.
Merger remedies can be generally categorized into two types:
divestiture of assets (i.e., structural remedies) and
requirements prohibiting or mandating certain conduct
(i.e., behavioural remedies). The template consent
agreement published by the Bureau contains key provisions that may
be expected to appear in a consent agreement, with a focus on
Obligations to complete divestitures of certain assets within
prescribed time periods;
Prescribed divestiture trustee sale process;
Requirement for Commissioner's approval of
Requirement to hold certain assets of a merger separate pending
Requirement to preserve divestiture assets pending
Ongoing behavioural commitments and transitional support
Relationship with employees of divested businesses;
Consequences for failure to complete a divestiture;
Appointment of a monitor to ensure compliance with the consent
Ongoing compliance and reporting obligations.
The precise nature and terms of the negotiated remedial measures
will differ depending on the nature of the transaction at issue and
the nature of the Bureau's concerns in respect of the
transaction. Not all of the above provisions will appear in every
According to the Bureau's press release, its publication
of the template consent agreement is intended to "provide
Canadian legal and business community with better insight into the
Bureau's expectations" in merger remedy negotiations and
the Bureau will continue to "adjust the consent agreement
template over time, based on its ongoing experience with negotiated
merger consent agreements." While recognizing the benefit of
increased transparency and predictability, the published template
consent agreement may serve to rigidly limit the scope for merging
parties to negotiate remedies that may fall outside of the standard
terms of the template consent agreement. Based on a number of
consent agreements resolving allegations of deceptive marketing
practices in recent years, it could be argued that the Bureau may
have a tendency to rigidly follow a template without adequately
taking into account the different prevailing market practices in
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
As indicated in our March 2017 bulletin, the Government of Canada previously announced its intention to accelerate by two years the previously scheduled increase to the "enterprise value" threshold under the Investment Canada Act
The Commissioner of Competition filed a Notice of Application against the Hudson's Bay Company in late February alleging that HBC engaged in deceptive marketing practices relating to its sale of sleep sets ...
In November 2016, the Canadian government announced that it will significantly raise the financial threshold above which foreign investments into Canada are subject to a pre-closing "net benefit" review under the Investment Canada Act (ICA).
The HR Guidelines focus attention on an area that is not typically regarded as an antitrust "hot spot" but has been the subject of several high-profile proceedings in recent years in the United States.
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).