Consultations on the Treatment of Efficiencies under the Competition Act

OTTAWA, September 24, 2004 - The Competition Bureau has launched a national consultation process on the role of efficiencies under the Competition Act. To assist in the discussions, the Bureau has issued a consultation paper entitled Treatment of Efficiencies in the Competition Act.

The issue of efficiencies in Canadian competition law has been a source of debate for many years. Recent parliamentary hearings prompted many stakeholders to suggest that the subject would benefit from broad public debate, taking into account the larger policy context of Canada's evolving economy.

The consultation paper provides an assessment of the Bureau's experience with the current treatment of efficiencies under the Act. It also looks at the experience of other jurisdictions. More specifically, the consultation paper seeks public comment on the merits of various proposals, including:

• Maintaining the Status quo;
• Maintaining the current efficiency defence with the addition of an explicit exception that would prohibit the application of the defence when a merger creates a monopoly or near-monopoly;
• Reviewing efficiencies as part of the overall assessment of a merger (factor approach under section 93);
• Allowing an assessment, post-merger, of whether the predicted claims of efficiencies were achieved (merger outcomes); and
• Allowing for the consideration of efficiencies in specialization agreements, joint ventures and strategic alliances.

The Bureau has hired the Intersol Group to conduct national consultations based on the consultation paper. To obtain further details on the consultation process and to submit comments, please visit Intersol's Web site at www.primestrategies.ca/bur eau/index.htm

The results of the consultation process will be carefully reviewed by the Commissioner of Competition and submitted to the Minister of Industry. The Commissioner will also consider the results of an international roundtable discussion, that will coincide with a meeting of the Organisation for Economic Co-operation and Development in October 2004, and the findings of an advisory panel of experts with backgrounds in business and international trade.

The Competition Bureau is an independent law enforcement agency that promotes and maintains fair competition so that all Canadians can benefit from competitive prices, product choice and quality service. It oversees the application of the Competition Act, the Consumer Packaging and Labelling Act, the Textile Labelling Act and the Precious Metals Marking Act.

For media enquiries, please contact:
Tim Weil
Director of Strategic Communications
Communications Branch
(819) 953-9271

For general enquiries, please contact:
Information Centre
Competition Bureau
(819) 997-4282
1-800-348-5358