Comments on the Canadian Merger Enforcement Guidelines

Thu Dec 30 15:24:38 EST 2010
By Dr. Elizabeth M. Bailey et al.

The Canadian Competition Bureau ("Bureau") has invited public comments on whether to revise the current Merger Enforcement Guidelines (“MEGs”) that were issued by the Bureau in September 2004. Specifically, the Bureau has requested comments as to whether the MEGs could be revised to more accurately reflect current merger review practices and to incorporate economic and legal developments since 2004. Experts from NERA's Global Antitrust and Competition Practice submitted comments on the proposed revisions on 30 December 2010. In general, the authors believe that the MEGs do a good job of providing guidance to businesses and antitrust practitioners on the Bureau's analytical approach to merger analysis. However, they note, one area in which the MEGs could be clarified is with respect to dynamic competition, particularly industries characterized by innovation and technological change. While the MEGs make reference to innovation and technology in numerous sections, the approach to merger analysis described in the MEGs and used by the Bureau in practice is largely a static framework for evaluating competition. The nature of competition in industries characterized by innovation and technological change is often not well captured in a static analysis. The authors argue that clarifying how and when the Bureau evaluates the dynamics of an industry in its analytical approach to merger review will provide additional useful guidance to businesses and antitrust practitioners.