Building On The Past, Not Breaking New Ground: Deconstructing The Bureau's Proposed Merger Enforcement Guidelines

On November 13, 2025, the Competition Bureau (the "Bureau") released the long-awaited draft of its Proposed Merger Enforcement Guidelines (the "Draft Guidelines"), marking the first substantial refresh to the current Merger Enforcement Guidelines (the "MEGs") that were published in 2011. The Draft Guidelines primarily reflect feedback received during the Bureau's November 2024 consultation and will be finalized after a second consultation process that runs until February 11, 2026.

As the Bureau's primary guidance document on merger reviews under the Competition Act (the "Act"), the Draft Guidelines have been highly anticipated since significant amendments to the Act's merger review regime came into effect almost a year-and-a-half ago. While the Draft Guidelines look different in form, many aspects remain substantively consistent with the Bureau's existing MEGs, implying that, while evidence on market structure (in the form of market shares or other concentration levels) has taken on increased importance since the adoption of the structural presumption, the Bureau otherwise intends to approach merger reviews in a manner that is fairly consistent with past practice.

We highlight below some of the key changes and open questions across several areas of the Draft Guidelines.

Guidance on Market Structure

Market definition and market share analysis, which had always been a relevant factor at preliminary stages of the Bureau's merger review, will now play a more determinative role following the introduction of the structural presumption.

Market Definition

The Bureau's approach to market definition remains fundamentally unchanged, utilizing the hypothetical monopolist test to identify the smallest plausible product and geographic dimensions (formerly referred to as product market definition and geographic market definition) impacted by the transaction and determine the relevant markets for assessment. The Draft Guidelines provide much more detail on how the Bureau will approach the market definition analysis and outline the application of the hypothetical monopolist test in specific scenarios, including markets prone to price discrimination, markets involving multi-sided platforms and markets prone to bundling.

Market Shares and Concentration

Perhaps the most fundamental change to the Act's merger control regime is the structural presumption in section 92(3), introduced in 2024, which provides that a transaction that results, in any relevant market, in (i) a combined market share in excess of 30% or a concentration index above 1,800 and (ii) an incremental increase to the concentration index of more than 100 is presumed to be anti-competitive unless the merging parties can prove otherwise on a balance of probabilities.

The 30% structural presumption threshold has negated the relevance of, and resulted in the removal of, the 35% "safe harbour" threshold established in the MEGs. Simply stated, the structural presumption statutorily necessitates a marked departure from prior policy – historically, mergers that resulted in combined shares between 30 and 35% were presumed to be competitively benign (unless there was evidence to the contrary); now such mergers are presumed anti-competitive.

The circumstances in which the Bureau will use its enforcement discretion not to pursue a case where the presumption is exceeded, and in particular, what evidence the Bureau finds most persuasive in exercising that discretion, has been unclear since the legislation of the structural presumption. Unfortunately, the Draft Guidelines do not provide a comprehensive answer. While the Draft Guidelines provide short descriptions of how market shares and concentration index calculations can be undertaken, they are silent on the following key elements of the structural presumption:

• Nature of rebuttal evidence: The Draft Guidelines note that "[t]he more the thresholds are exceeded, the greater the need for persuasive evidence to refute the presumption of substantial harm in our overall analysis", but do not provide any detail on the types of rebuttal evidence the Bureau views as most persuasive.
  
• Insufficient data to calculate market shares / concentration: Transacting parties often rely on third party data to calculate market shares or concentration, with the robustness of available data varying significantly among industries. The Draft Guidelines are silent on how (or whether) the Bureau will apply the structural presumption in circumstances where reliable internal or third-party data is unavailable to facilitate market share or concentration calculations.

It remains to be seen whether the Bureau will fill these material gaps in its guidance once its final guidance is published.

Guidance on Assessing Anti-Competitive Effects

An assessment of whether a transaction is likely to result in a substantial prevention or lessening of competition ("SPLC"), which the Draft Guidelines also refer to as "substantial harm", continues to be guided by the factors enumerated in section 93 of the Act. In this respect, it is unsurprising that the Bureau's overall approach to assessing anti-competitive effects remains essentially unchanged.

That said, the proposed revisions to the MEGs are not merely cosmetic. The Draft Guidelines provide additional, and in some cases, refined insight into the Bureau's conceptions of theories of harm and now address the manner in which it intends to approach merger reviews in emerging and dynamic industries. At the same time, there remains room for greater detail and clarity for merging parties and other stakeholders on key elements in the Bureau's effects analysis:

• Conceptual Inconsistencies: In detailing its understanding of substantial harm, the Bureau uses different, and sometimes inconsistent, standards. For example, the Draft Guidelines provide two different standards for assessing substantiality – paragraph 47 discusses the merged firm's ability to "materially influence" dimensions of competition whereas the following paragraph introduces the concept of "material effect", defined as a firm's ability to exercise "materially more market power than it could without the merger".
  
  Similarly, paragraph 44 of the Draft Guidelines states that a competitive effects assessment will focus on whether the transaction provides the merged firm with "materially greater market power" whereas the Bureau later states that mergers that "entrench incumbents' existing market power" may also be problematic.
  
  While these inconsistencies likely will not affect the cadence of most merger reviews in practice, they do run against one of the stated aims in the Bureau's original consultation which highlighted the need to make the MEGs more straightforward for businesses to understand.
  
• Lack of Guidance Around Effective Remaining Competition: In practice, one of the most important SPLC assessment factors is the presence of effective remaining competition following the merger. Yet, the Draft Guidelines continue to offer limited explicit guidance on what evidence is most persuasive to the Bureau to demonstrate effective remaining competition. In launching its consultation, the Bureau has noted that the assessment of effective remaining competition is fact-specific and will be incorporated into their review of market structure in each case. Nevertheless, the absence of generally applicable guidance on this topic is more pronounced in light of the importance of rebuttal evidence in overcoming the structural presumption.
  
  While the Draft Guidelines state that the market structure exercise should assess the relative competitive significance of remaining firms, it focuses only on market definition and market shares. The most relevant commentary on evidencing effective remaining competition appears in paragraphs 149 – 152 of the Draft Guidelines, which outline factors the Bureau may consider when evaluating whether a merger eliminates a vigorous and effective competitor (i.e., one of the transacting parties). It is not clear why the same framework should not be extended to third parties as well.
  
• Heightened Focus on Non-Price Elements of Competition: Where the current MEGs primarily emphasize price effects in the competitive effects analysis, the Draft Guidelines adopt a wider lens, providing further insight into how the Bureau intends to assess non-price elements of competition. For example, the Draft Guidelines contemplate a qualitative equivalent to the hypothetical monopolist test, providing that a firm that is able to sustain a small but significant and non-transitory decrease in quality ("SSNDQ") (the corollary to a small but significant and non-transitory increase in price or "SSNIP") would exercise market power.
  
  The Draft Guidelines also introduce a dedicated section on the Bureau's approach to analyzing the competitive impact of a transaction on innovation, which is also referred to as dynamic competition. The Draft Guidelines provide that a transaction will harm dynamic competition (and thereby potentially result in an SPLC) by lessening incentives to innovate or to invest in products or features. Notably, the Bureau states that in defining markets and assessing competition where innovation is important, the Bureau may consider products or markets that do not yet exist, considering factors such as R&D assets, IP, specialized personnel, and the strategic objectives behind the parties' innovation efforts. As in prior innovation theories of harm, the fundamental question remains the quality of evidence to establish harm combined with sufficient certainty to facilitate an SPLC finding; the Draft Guidelines are silent on this topic.
  
• Access to Competitively Sensitive Information ("CSI") in Vertical Mergers: While input and customer foreclosure remain central tenets of the Bureau's competitive effects assessment for vertical mergers, a notable addition is the express consideration of the transaction's impact on access to third parties' CSI. While this is not a new area of analysis in vertical mergers, its express inclusion underscores the growing importance of data and information access to competitive performance and the Bureau's skepticism that vertically integrating companies will take steps to protect CSI.
  
• New Barriers to Entry or Expansion: While the framework for assessing entry and expansion (i.e., whether it would be timely, likely, and sufficient) remains intact, the Draft Guidelines expand on the types of barriers to entry that the Bureau may consider in its review. These include: (a) learning by doing, though it remains unclear what degree of past experience would be required to overcome this barrier; and (b) access to data and access to limited or non-duplicable inputs, each of which recognize the importance of high-value or scarce inputs to entry and expansion in certain markets, particularly in the digital sector.
  
  Importantly, paragraphs 51-53 of the Draft Guidelines provide that a merger that entrenches an incumbent's market power, through raising barriers to entry, can itself be sufficient to generate an SLPC. While the Draft Guidelines include numerous examples of the types of barriers that the Bureau will consider in its assessment, which are largely consistent with the same principles used in the Bureau's draft Anti-Competitive Conduct and Agreements guidelines released in October (discussed in our previous bulletin), they dedicate less attention to the types of evidence that the Bureau will consider most persuasive in establishing that entry is timely, likely and sufficient. Both are important aspects of any entry analysis and it is significant that the Draft Guidelines focus on one and not the other.
  
• Pro‑Competitive Benefits: With the efficiencies defence having been repealed in 2023, the Draft Guidelines materially scale back discussion of how efficiencies will be considered in merger analysis. The Draft Guidelines do acknowledge that pro‑competitive benefits may be considered as part of the competitive effects analysis, provided those benefits are (i) verifiable and likely to occur, (ii) specific to the merger, and (iii) rivalry‑enhancing. However, where a merger otherwise raises significant competition concerns, even well-supported claims of efficiency gains are unlikely to alter the Bureau's conclusions regarding harm to competition. As such, it remains unlikely that pro-competitive efficiencies will play an important role in the competitive effects analysis for most mergers.

Concluding Remarks

It is clear that the Bureau has undertaken extensive efforts to update its official guidance to take account of legislative amendments. The Draft Guidelines are more clearly structured than the prior MEGs and, in some cases, use accessible language, though they lack detailed guidance on critical elements of the Bureau's analytical framework, creating information gaps for transacting parties contemplating reviews before the Bureau. Yet, time remains for the Bureau to address these gaps as part of the final guidelines which will be expected shortly after the Bureau's consultation process concludes in February 2026.