NDP-13 and NDP-14 amend clauses 249 and 250 to enact rebuttable presumptions for mergers consistent with those set out in the U.S. “Merger Guidelines”.
Mergers, of course, involving large players in highly concentrated markets pose a greater risk to competition than mergers involving small players in fragmented markets. I think we can all understand that moving from three to two options is worse than moving from 10 to nine, from a competition perspective.
The United States leverages this basic insight in the form of rebuttable structural presumptions for mergers. Where the U.S. agencies can prove that a merger will increase market share or concentration above certain thresholds, the merger is presumed to be anti-competitive, and the burden then shifts to the merging parties to rebut the presumption.
Parties can rebut the presumption by showing, for example, that barriers to entry in the market are low or that there are other countervailing factors that will prevent anti-competitive harm. The higher the parties are above the threshold, the stronger the evidence needed to be able to rebut the presumption, so it operates like a sliding scale.
I'll just quote from the written submission to FINA from the Competition Bureau:
While we welcome these steps, our February 2022 and March 2023 submissions called for a more definitive reform in this area. We recommend that Clauses 249-250 be amended to set out specific, rebuttable presumptions for mergers aligned with the thresholds set out in the 2023 U.S. Merger Guidelines.
This is beyond my understanding, but it says:
The U.S. Merger Guidelines set out two different structural thresholds, one based on levels and changes in concentration as measured by the Herfindahl-Hirschman Index and another based on the merged firm's market share.
In our view, adopting a structural presumption would strengthen merger review in Canada.
This is aligned with the “time-tested U.S. approach”.
I would so move.