The practice of Competition Law in Canada falls into two broad but distinct categories: solicitor (advisory) work, which includes merger analysis, and litigation.
Solicitor (advisory) work: Providing advice on competition law issues is an increasingly important part of advising business clients. Competition lawyers are called upon to advise clients on the competition law implications of a variety of business activities. By identifying and helping clients to address these issues, competition lawyers assist clients in managing and minimizing competition law risk. Competition lawyers provide advice with respect to corporate and commercial matters and day-to-day business practices. They are also advocates for clients in discussions with Competition Bureau officials. Principal areas of advice and representation include mergers & acquisitions; strategic alliances and joint ventures; marketing and distribution activities; relations with customers, competitors, and suppliers; and, increasingly, the interface between competition law and intellectual property law.
Competition litigation: Competition litigation in Canada has traditionally involved representing clients before the courts on criminal matters and before the Competition Tribunal on civil proceedings initiated by the Commissioner of Competition. While there was limited private competition litigation in Canada in the years immediately following the enactment of the Competition Act in 1986, this type of proceeding has become more common with the advent of competition law class actions. Recent amendments permitting limited private access to the Competition Tribunal, and proposals to expand private access, are likely to lead to further private competition litigation in Canada.
The Competition Act
The Competition Act governs most business conduct in Canada. As described by the Canadian Competition Bureau: The Act “contains both criminal and civil provisions aimed at preventing anti-competitive practices in the marketplace. Its purpose is to maintain and encourage competition in Canada in order to:
- promote the efficiency and adaptability of the Canadian economy
- expand opportunities for Canadian participation in world markets while at the same time recognizing the role of foreign competition in Canada
- ensure that small and medium-sized enterprises have an equitable opportunity to participate in the Canadian economy
- provide consumers with competitive prices and product choices.”1
Headed by the Commissioner of Competition, the Competition Bureau is responsible for the administration and enforcement of the Competition Act, the Consumer Packaging and Labelling Act (except as it relates to food), the Textile Labelling Act, and the Precious Metals Marking Act.
Merger Reviews Involving Efficiency Claims
Under section 92 of the Competition Act, 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, section 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.
As reported in Canadian Lawyer, the Competition Bureau has recently released guidance about its approach to dealing with an efficiency claim in defense of a merger that is likely to harm competition.2 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.
- “The Competition Act.” Competition Bureau Canada. February 22, 2018. https://www.competitionbureau.gc.ca/eic/site/cb-bc.nsf/eng/04267.html.
- Carolino, Bernise. “Competition Bureau releases guidance on the merger review process involving efficiency claims.” Canadian Lawyer. May 29, 2020. https://www.canadianlawyermag.com/practice-areas/corporate-commercial/competition-bureau-releases-guidance-on-the-merger-review-process-involving-efficiency-claims/330067.