CHAPTER 07 Competition Act
example, be triggered if a firm with a 30% share acquired a firm with a 2% share of a properly defined market, or if a firm with a 16% share merged with a firm with a 15% share. Depending on the number of other competitors and their market shares, a merger of two firms with market shares of 7% and 8% respectively could potentially also trigger the presumption. – Where it applies, merging parties need to lead evidence to rebut the presumption. Bureau guidance indicates that it will evaluate such evidence on a sliding scale: the more the concentration thresholds are exceeded, the greater the need for persuasive evidence to overcome the presumption. – The Competition Act no longer includes a statutory efficiency defense for mergers. While Bureau guidance reflects a general skepticism of, or hesitancy to give full weight to, a merger’s procompetitive effects, verifiable and likely merger‑specific, rivalry‑enhancing pro-competitive benefits (such as cost savings that intensify competition or consumer‑facing improvements) should continue to be relevant to addressing any concern or presumption that the merger may prevent or lessen competition substantially. SERVICE STANDARD TIME PERIODS – The Bureau has adopted the following service standards reflecting the time in which it aims to complete reviews of mergers: > “Non-complex” mergers have an absence of substantive competition issues and include transactions with no or minimal overlap between parties, assuming properly defined product and geographic markets. The service standard is 14 calendar days. Most merger transactions in Canada fall into this category. > “Complex” mergers generally involve transactions between competitors or between customers and suppliers, where there are indications that the transaction may, or is likely to, create, maintain or enhance market power. The service standard is 45 calendar days unless a supplementary information request is issued, in which case the service standard is extended to 30 calendar days from when the Commissioner receives a complete response to the request from all parties. – Service standard periods typically begin after the Bureau has received the complete information it needs to conduct its analysis. The Bureau is not legally obligated to meet the service standard time frames, and service standards do not modify statutory waiting periods. Therefore, it is possible that the statutory waiting period will end before expiry of the service standard period and the Bureau’s completion of its review. In such circumstances, even though the Competition Act contains no statutory impediment to closing upon expiry of any applicable waiting period until and unless the Commissioner obtains an injunction, parties often wait until positive clearance has been received from the Bureau before closing. If parties do choose to proceed to close before receiving clearance, they run the risk that the Bureau will seek to enjoin closing or challenge the transaction up to one year after closing.
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