Competition/Antitrust & Foreign Investment Outlook 2023
For the first time in more than a decade, and after years of sustained advocacy by the Commissioner of Competition, substantial reform was enacted to the Competition Act in 2022. While many changes were implemented, highlights included the pending criminalization of certain buy-side (specifically wage fixing and no-poach) agreements, very significant increases in the financial penalties available for abuse of dominance and deceptive marketing infringements, and the adjustment of the statutory assessment factors for mergers, abuse of dominance and competitor collaborations to better enable the Competition Bureau to take enforcement action using unconventional theories of harm in digital markets. Following closely behind the first phase of Competition Act reform, the federal government has announced a public consultation as a precursor to further — more significant — legislative amendments.
In addition, significant Investment Canada Act developments have signalled a stricter approach to national security review, particularly in relation to sensitive industries (especially critical minerals) and to foreign investors, whether privately or publicly owned, with connections to non-allied foreign governments. Legislative amendments that would further strengthen the national security regime have been proposed and are likely to be enacted in 2023.
Learn how these developments might affect your business in the year ahead in our Competition/Antitrust & Foreign Investment Outlook 2023. Our Competition/Antitrust & Foreign Investment Group reviews key developments in Canada during 2022 and reflects on their significance for 2023 and beyond. Topics covered include the following:
- Competition Act merger review: More contentious and intensive reviews
- Investment Canada Act: Geopolitical trends increase national security risks
- Unilateral conduct: A new era for digital enforcement or repurposing the same toolkit?
- Cartel activity: Beware buy-side agreements
- Off-Market: Canada takes a firmer stance against deceptive marketing
- Competition class actions: Canadian courts dig deep into the Competition Act
Competition/Antitrust & Foreign Investment Outlook 2023
Download Competition/Antitrust & Foreign Investment Outlook 2023
Read a snapshot from the Merger Review chapter of the publication below:
Competition Act Merger Review: More Contentious and Intensive Reviews
2022 was a very active year for the Bureau’s mergers branch. Alongside several negotiated merger remedies, the Bureau continued its recent trend of challenging mergers before the Tribunal, a practice that until recently had been rare in Canadian enforcement. This increased merger activity took place against a backdrop of ongoing legislative reform in Canada. While the initial set of amendments, enacted in June 2022, took a restrained approach, the fuller review of the Competition Act launched in November 2022 will consider a number of significant changes to Canada’s merger control laws.
A Hardening Enforcement Strategy
Over the past year, the Bureau has stressed that it is ready, willing and able to challenge mergers through litigation before the Tribunal. While, overall, merger litigation remains uncommon in Canada, the number of cases brought by the Bureau to the Tribunal has demonstrably increased. In the 13 years since Canada’s merger review regime was last meaningfully amended in 2009, the Bureau has challenged nine mergers; however, three of these have been brought since 2021 (Secure / Tervita, GFL / Terrapure and Rogers / Shaw), with the Tribunal hearing two of these cases in 2022 (GFL / Terrapure was ultimately resolved through a consent agreement). However, this litigation-ready posture does not necessarily translate into success before the Tribunal: in November 2022, it was announced that the Bureau had lost its challenge of the Parrish & Heimbecker / Louis Dreyfus grain handling merger on account of having failed to prove the merger would lessen competition substantially.
Notwithstanding this setback, other merger litigation continues:
- Rogers / Shaw. In fall 2022, the Tribunal heard the Bureau’s challenge of the $26 billion merger between Rogers Communications Inc. and Shaw Communications Inc., two of Canada’s leading telecommunications companies. The Bureau persisted with litigation notwithstanding a substantial structural remedy offer from Rogers, which would have seen it divest Shaw’s Freedom Mobile wireless business. On December 29, the Tribunal dismissed the Commissioner’s application. The Bureau has filed an appeal of the Tribunal’s decision with the Federal Court of Appeal.
- Secure / Tervita. In spring 2022, the Tribunal heard the Bureau’s challenge of the proposed merger between two players in the waste sector, Secure Energy Services Inc. and Tervita Corporation. The case is likely to turn on the Competition Act’s mergers efficiencies defence, a provision that has been subject to sharp criticism from the Commissioner and which has been called out as an area of potential reform as the government considers further amendments to the Competition Act in 2023.
In parallel, the Bureau has also continued to demonstrate its openness to resolving merger concerns on a consensual basis, entering into seven consent agreements in 2022, each providing a structural remedy. While generally in line with the number of consent agreements registered annually, it does represent a steady increase over recent years, with three and four consent agreements being registered in 2020 and 2021, respectively.
Download the full guide to read more.
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