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CCCA_V6No4_CoverStory-FIN_CCCA 11/26/12 1:12 PM Page 24 Cover James Musgrove Partner McMillan LLP Toronto and increasing the penalties associated with those laws.” are big information requests. They’re time-consuming, take Among the most notable changes were the introduction of a months to comply with, and give the bureau additional leverage two-stage merger review process; changes to the cartel conspira- in reviewing big, problematic mergers.” cy laws concerning agreements with competitors; changes to the The bureau signalled its willingness to get tough in its first court pricing provisions, and modifications to the penalties associated challenge against a merger since 2005.The target was CCS Corp.’s with misleading advertising.The amendments provided a new set (nowTervita Corp.’s) acquisition of Complete Environmental Inc., of provisions for the merger review process, doing away with the whose primary asset was the Babkirk hazardous waste landfill site former 14- and 42-day review periods and moving to a supple- in northeastern British Columbia.The issue was the likelihood that mentary information request (SIR) process, similar to the U.S. the merger could substantially prevent competition in the market second-request process, says Calvin Goldman, co-chair of Blake, for landfill services of hazardous materials. In a precedent-setting Cassels & Graydon’s competition, antitrust and foreign invest- case,the competition tribunal ruled in favour of the bureau on May ment group in Toronto. 29, 2012. On the one hand, the case sent a message to companies “There are in the provisions today potential for much greater that seek to eliminate competitive threats through acquisition; on information being supplied to the bureau with statutory time the other, the value of the merger was only about $6-million, only periods that can take considerably longer than with the previous a fraction of the $78-million merger notification threshold. governing provisions,” he says. “That provides the bureau with “That case sent a signal that transactions, even if they’re rela- much greater information and a greater time frame in which to tively small in size, don’t escape competition law review,” make a more informed decision.” Musgrove says. Fanaki adds that the case will have lasting impact The Competition Bureau also gained much more power under because it “laid out a framework for examining mergers that did- the new review process, says Musgrove. “If the bureau wanted n’t involve existing rivals, but rather a circumstance in which one additional information about a merger before this change, either competitor was going to enter into the market, which isn’t com- it could get it voluntarily from the party, which it usually did, or monly discussed in the existing jurisprudence.” it could go to court and get an order to produce the information. The big players did not escape the bureau’s notice either.It filed Now, it can just make the request for the information; it has the an application with the Competition Tribunal to ban a proposed ALENA GEDEONOVA power itself to do so. And that power has been used about 18 joint venture between Air Canada and United Continental times now since the law came in. It’s meaningful because those Holdings Inc. because it would reduce competition in certain key 24 CCCA Canadian Corporate Counsel Association WINTER 2012