The Competition Bureau’s Misguided Approach to Merger Remedies Trusted Policy Intelligence / Conseils de politiques dignes de confiance

The Tribunal concludes that the merger is likely to lessen competition substantially, but, following Southam, accepts the parties’ submission that divesting a division, call it Asset A, will eliminate the substantial lessening of competition. [...] Since the divestiture implies that the merger does not lessen competition substantially, the merger is approved by the Tribunal. [...] A response might be that there is a difference in that divestiture is only proposed first scenario after a finding that the merger would substantially lessen competition, whereas the parties in the second began with the divestiture. [...] (Canadian law also makes such a trade-off explicit in allowing the efficiencies defence to mergers.) Preventing a post-remedy merger that only lessens competition in order to punish the parties for initially proposing a more anticompetitive merger forecloses the private and social gains that the law assumes such mergers generate. [...] But as long as the mischief that the law addresses is a substantial lessening of competition, the remedial rule in Southam is consistent with the requirement that the law treat like cases alike.