ECON 308 Chapter Notes -Effective Competition, Market Power, Switching Barriers

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Published on 19 Apr 2013
School
McGill University
Department
Economics (Arts)
Course
ECON 308
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
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Document Summary

Eckert and west: canadian supplement for industrial organization. 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) 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. 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.

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