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.
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