List the efficiencies defence
Efficiencies are relevant when assessing the competitive effects of mergers or competitor collaboration and should be explicitly listed in the Competition Act
In a nutshell
Bill C-352, Lowering Prices for Canadians Act, should be modified to include efficiencies among the factors listed in sections 93, sets out a non-exhaustive list of market-specific factors that could influence a merged firm's ability to lessen or prevent competition substantially, and 90.1(2) of the Competition Act.
Adding to earlier submission
In its letter to the House of Commons Standing Committee on Industry and Technology, the CBA’s Competition Law and Foreign Investment Review Section adds a few brief comments to an earlier submission on Bill C-352. The Section also appeared before the Committee.
Listing efficiencies
Bill C-56, which received royal assent last December, removed the efficiencies defens, which allowed otherwise anti-competitive mergers to withstand legal challenge where they generated sufficient efficiencies to exceed and offset anti-competitive effects. Bill C-352 proposes to replace the efficiencies defense in the merger review (section 92) and civil competitor collaboration (section 90.1) provisions of the Competition Act, by listing efficiencies among the factors listed in sections 93 and 90.1(2) the Competition Tribunal can consider when assessing competitive effects.
Though it supports the inclusion, the CBA Section notes that efficiencies have not yet been listed as factors in sections 93 and 90.1(2).“It is well recognized in Canada and globally that efficiencies are relevant when assessing competitive effects, as they can lead to pro-competitive outcomes, enhanced productivity and innovation, ultimately benefiting consumers,” the CBA letter says.
“As such, efficiencies should be expressly recognized as an important factor along with other factors in sections 93 and 90.1(2).”
Read the submission.
