The Bureau also published its model timing agreement
The Competition Bureau has shed light on its general approach in dealing with efficiency claims in defence of a merger that is likely to harm competition.
Under s. 92 of the Competition Act (R.S.C., 1985, c. C-34), the Competition Tribunal may issue an order upon finding that a merger or a proposed merger substantially prevents or lessens competition, or is likely to do so. However, s. 96 provides an exception in the case of a merger or a proposed merger that brings about or is likely to bring about gains in efficiency which will be greater than and which will offset the anti-competitive effects.
To aid the Bureau in conducting the trade-off analysis between claimed efficiency gains and anti-competitive effects, the merging parties are expected to enter into a timing agreement. The agreement sets the timeline for certain stages in the process, such as producing evidence to support the parties’ claimed efficiency gains.
The timing agreement aims to benefit not only the Bureau but also the merging parties. On the part of the Bureau, the agreement gives it enough time to conduct an intensive review of the evidence presented, which may consist of voluminous documents and data; to engage with the parties, their lawyers and business experts and to assess whether the claimed efficiencies offset the anti-competitive effects of the merger.
On the part of the merging parties, they can benefit from an increased transparency in the analysis and a greater certainty as to the timeline for the review process.
In addition to providing this guidance on the merger review process, the Bureau also released its model timing agreement, which reflects the input given by the legal community in response to the draft version, as well as the Bureau’s recent experience with such cases.
While the model timing agreement provides a framework for this specific type of merger review, the Bureau stressed that the framework may be adjusted depending on the particular details of each case.
The Bureau said that it is continuing to reassess this process. It also remains open to feedback.
