Originally published in Blakes Bulletin on Competition,
Antitrust & Foreign Investment, March 2009
Under Canada's competition laws, a merger may proceed where
the efficiencies resulting from the transaction are greater than
and will offset its anticompetitive effects.
The Canadian Competition Bureau has just published the final
version of its Bulletin on Efficiencies in Merger Review. A
draft version of the Bulletin was published earlier this year and
several interested parties – including the American Bar
Association (Section of Antitrust Law and Section of International
Law) and the Canadian Bar Association (National Competition Law
Section) – provided comments. The Bulletin is intended to
provide merging parties with practical guidance in understanding
the Competition Bureau's enforcement approach in the area of
efficiencies and merger reviews, and is a supplement to the
Bureau's existing Merger Enforcement Guidelines.
The Bulletin confirms the Bureau's position that, in
appropriate cases, the Bureau will not necessarily resort to
litigation before the Competition Tribunal to resolve efficiency
claims. In other words, the Bureau itself will first assess whether
the gains in efficiency arising from a transaction are greater than
and will offset any anti-competitive effects. In this respect, the
Bulletin encourages parties who choose to submit efficiency claims
to do so at the earliest possible stage, as this may assist the
Bureau in providing a timely response as to whether or not a remedy
may be sought in respect of a merger. Detailed information about
efficiency claims at an early stage would also allow the Bureau to
prepare follow-up information requests and test the claims during
its market contacts – subject to confidentiality
According to the Bulletin, the Bureau will generally follow the
direction and standards given by the Competition Tribunal and the
Federal Court of Appeal in Superior Propane. The Bulletin
also notes that the Bureau will consider dynamic efficiencies in
its analysis, and may place more emphasis on such efficiencies in
concentrated industries characterized by rapid technological change
and innovation. Where possible, dynamic efficiencies would be
assessed on a quantitative basis (e.g., decrease in production
costs as a result of innovation) but, in the absence of
quantitative information, a qualitative assessment would be
Finally, the Bulletin attempts to clarify the Bureau's
position with respect to gains in efficiency from non-Canadian
sources, noting that in most cases the trade-off analysis will
weigh the gains in efficiency that benefit the Canadian economy
with the anticompetitive effects of a transaction in Canada.
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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