Canada’s merger laws let companies ‘extinguish competitive threats,’ new report says
He compared Canada’s existing regime to a set of faulty brakes. “Our laws today are like brakes on a car going downhill. We know we’re going downhill, but we’d like to go there a little bit slower,” he said in an interview.The “permissiveness” of merger laws is especially concerning in the context of a growing digital economy, which is fraught with unique challenges, his report adds.
The survey of 1,001 Canadians aged 18 and older was conducted between Jan. 14 and 17. Ipsos says its online results are weighted and are comparable to a traditional poll with a margin of error of plus or minus 3.5 percentage points, 19 times out of 20.One of the issues with the Competition Bureau is the threshold at which it must be notified of a transaction, the CIGI report says.
That’s because current laws take into consideration the increased efficiency that may come from a merger, he said. Harms from reduced competition are permitted if the proposed merger will lead to cost savings that are deemed to be greater.Instead, the laws favour negotiated agreements that include concessions or remedies that would address some of the competition concerns. These remedies don’t have to fully address the reduction in competition that would be caused by the merger, the report says.
Bester said that if Canada had stronger merger laws, the Rogers-Shaw deal would have automatically been “dead in the water” given the lack of competition in the telecommunications industry.“If we had stronger merger laws, this merger wouldn’t be proposed in the first place.”
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