Textbook Notes (362,880)
Canada (158,081)
ECON 308 (6)

308 Eckert and West Notes.docx

4 Pages
Unlock Document

McGill University
Economics (Arts)
ECON 308
Christopher Green

Eckert and West: Canadian Supplement for Industrial Organization - Section 91 of the Competition Act defines a merger as the acquisition or establishment, direct or indirect, by one or more persons, whether by purchase or lease of share or assets, of control over or significant interest in the whole or part of a business of a competitor, supplier, customer, or other person - Section 92 states that where the Tribunal finds that a merger or proposed merger prevents or lessens, or is likely to lessen, competition substantially, the Tribunal may: a) In the case of a completed merger, order the merger to be dissolved, or parties to the merger to dispose of assets or shares b) In the case of a proposed merger, order the parties not to proceed with the merger - Section 92 also instructs the Tribunal not to find that a merger or proposed merger prevents or lessens competition substantially solely on the basis of evidence of concentration or market share. - Section 93 gives a set of criteria (see p 165 of course pack) - Section 96 specifies that in considering potential efficiency gains, the Tribunal should consider the effect of such gains on increases in the real value of exports and whether the gains will lead to a significant substitution of domestic products for imported products. Tribunal must not conclude that a merger results in efficiency gains only because of redistribution of income - The Commissioner has 3 years from the date at which a merger is complete to apply to the Tribunal for an order to dissolve or prohibit the merger - Part 9 of the Competition Act deals with Notifiable Transactions. If the parties to a merger have assets or gross revenues from sales in excess of 400 million dollars, or if the business being acquired has assets or gross revenues from sales in excess of 35 million dollars, then the parties to the merger must notify the Commissioner with information. - A proposed transaction shall not be completed before the expiration of 14-42 days after the day on which the required info is given to the Commissioner. Failure to notify is a criminal offense under section 65 and is subject to a fine up to 50 000 - For particular industries, the power to approve a merger may lie with other government ministries. - Section 94 specifies that the Tribunal may not make an order dissolving or prohibiting a merger if: a) The transaction falls under the Bank Act, Cooperative Credit Associations Act, Insurance Companies Act, or the Trust and Loan Companies Act, and is certified by the Minister of Finance as being in the public interest b) Transaction is approved under the Transportation Act and certified to the Commissioner by the Minister of Transport. - The Bureau will begin its analysis of a proposed merger by defining the relevant product and geographic markets within which the firms compete - There is a focus on the hypothetical monopolist test: defined in terms of the smallest group of producers and smallest geographic area in relation to which sellers, if acting as a single firm (a ‘hypothetical monopolist’) that was the only seller of those products in that area, could profitably impose and sustain a significant and nontransitory price increase above levels that would likely exist in the absence of a merger. - A five percent price increase is considered significant - The Bureau will start with one of the merging parties and ask what would happen if it raised price by 5 percent for one year. If the price increase would not be sustainable because consumers would switch to substitute products, then the Bureau will take the firm producing the closest substitute to the mergin
More Less

Related notes for ECON 308

Log In


Don't have an account?

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.