Merger Review Benchmarking Report - Footnotes

¹    The authors of the Benchmarking Study are Lise Davey, Manager, Client Services and John K.Barker, Assistant Deputy Commissioner, Compliance and Coordination Division, Compliance and Operations Branch, Competition Bureau.

²    Report of the Consultative Panel on Amendments to the Competition Act, March 6,1996.

³    Because merger review is a legislated requirement with imposed deadlines and the Bureau has no control over the level or complexity of merger activity in any given year, the Bureau has often in the past had to defer resources from other areas,such as conspiracy and abuse of dominance investigations and regulatory interventions, to deal with the merger caseload. 

⁴    In this report,benchmarking is defined as the process of continuously comparing and measuring our organization against others anywhere in the world to gain information on philosophies, policies, practices and measures that will help us improve performance. From Applying Benchmarking Skills in Your Organization, A Course Presented by the American Productivity &Quality Centre . 

⁵    Competition Bureau.Fee and Service Standards Policy Pursuant to the Competition Act, Frequently Asked Questions. Ottawa: June 15,1998.

⁶    Competition Bureau. Fee and Service Standards Handbook Pursuant to the Competition Act. Ottawa: May 1,1998, release 2.

⁷    Competition Bureau. Fees and Service Standards: Report on Forum held February 2,1999. Ottawa: May 1999.

⁸    Characteristics, conditions or variables that have a direct influence on a customer’s satisfaction with a specific business process - the few areas in which satisfactory performance is essential for a business to succeed.

⁹    It does not describe the process for transactions from Investment Canada or other examinations/administrative work undertaken by the Mergers Branch. 

¹⁰    Because parties were now required to pay a fee, they wanted the assurance that their transactions were, in fact, notifiable.

¹¹    Stakeholders see this as very important; it confirms that the Bureau did, indeed, receive the documentation and when. 

¹²    The information that is usually missing from a filing includes the names and telephone numbers of clients and suppliers (20 for a short-form filing and 40 for a long-form filing) and justification of why s.116 is being used to substantiate not providing certain information. 

¹³    Program officers are also the designated back-ups for the secretaries for urgent matters.

¹⁴    A devoted database file is usually developed for big files. 

¹⁵    In the dairy file, one officer coded and certified about 50,000 documents.

¹⁶    Represents only those files completed between November 3, 1997 and March 31,1998.

¹⁷    Since the beginning of Benchmarking Review, the Commissioner has delegated this  to the Senior Deputy Commissioner.

¹⁸    Office of Fair Trading, Mergers: Annual Report of the director General of Fair Trading, 1998. The Stationery Office. Ordered by the House of Commons to be printed June 30,1999.

¹⁹    Office of Fair Trading. Mergers: A guide to procedures under the Fair Trading  Act 1973. The Stationery Office. Publication 521, May 1999.

²⁰    It is important to note that the threshold for opening an investigation (being the  share of supply or acquisition within the U.K. or a part thereof) should not be confused with the merging parties share of a relevant market for purposes of substantive review. The definition of relevant market and therefore of market share would be determined  only as the result of the investigation.

²¹    Office of Fair Trading. Mergers: A guide to procedures under the Fair Trading  Act 1973. The Stationery Office. Publication 521, May 1999.

²²    Ibid.

²³    Ibid.

²⁴    Ibid.

²⁵    Office of Fair Trading, Mergers: A guide to procedures under the Fair Trading  Act 1973. The Stationery Office. Publication 521, May 1999.

²⁶    Getting the deal through. The international regulations of merger review and  joint ventures, 3rd ed.

²⁷    It was proposed that the Secretary of State would retain certain authorities for  merger cases involving national security, reserve power to specify additional public interest criteria, and a discipline of the use of this reserve power.

²⁸    Department of Industry and Trade. Mergers: The Response to the Consultation  on Proposals for Reform. October 2000.

²⁹    Primary legislation is required to enact the proposal but, in the interim, Secretary of State for Trade and Industry Stephen Byers has said he will accept the Director General’s advice on whether to refer mergers to the Competition Commission in all but exceptional cases. Fair Trading from the OFT. Issue 29, February 2001. P.3.

³⁰    Office of Fair Trading. Outline of United Kingdom Competition Policy. The Stationery Office. Publication #00280, June 1998.

³¹    The term concentration covers mergers, acquisitions and full-function joint ventures (joint ventures that function as independent businesses). A concentration arises when two or more previously independent undertakings merge to become one new independent undertaking, or when an undertaking acquires direct or indirect control of the whole or parts of one or more other undertakings.

³²    Department of Trade and Industry.Mergers: A Consultation Document on Proposals for Reform. August 1999.

³³    At the time of publication of this report, the Minister for the Department of Trade  and Investment had announced his adoption of a practice in line with such a proposal.

³⁴    Antitrust matters from the regional offices must be cleared through, and are  monitored by, the Bureau of Competition in Washington, D.C., in the same manner as are cases from the Bureau's merger operating divisions.

³⁵    To File or Not to File: Introductory Guides to the Pre-merger Notification Program. Pre-merger Notification Office of the Federal Trade Commission. Guide II, January 1991.

³⁶    This period is 20 days after receipt of the requested information. There are shorter deadlines for cash tender offers and for filings when the acquiree is bankrupt.

³⁷    Neither agency can enforce a compulsory process or final order, for example, requiring divestiture of assets. Both agencies must seek the assistance of the Federal Court before a final order imposing a remedy can be enforced.

³⁸    Guide 1, What is the Pre-merger Notification Program, An Overview.

³⁹    Typically, clearance is sought when the agency has historical expertise and experience in a particular industry. For example, the FTC has historically dealt with mergers in the automobile, petroleum, retail grocery and cement industries. The DOJ  usually looks at mergers in the steel and telecommunications industries.

⁴⁰    This process has recently been formalized whereby the agencies have publically committed to contact the parties within 5 days of issuing a second request to discuss its contents.

⁴¹    In addition, each merger operating division has five or six support staff members, including investigators and secretaries.

⁴²    Both the Department of Justice and the FTC have paralegal programmes in which undergraduates who intend to proceed to law school work for 14 months at the organization.The FTC has 30-35 in the programme at any time.

⁴³    2-digit SIC codes are part of the system of Standard Industrial Classification established by the United States Government Classification Manual, 1987. Examples include 07 Agriculture Services, 13 Oil and gas.

⁴⁴    Of the 900 that did not result in a second request by the FTC, a certain number, after being cleared to DOJ would have resulted in second requests by the DOJ. DOJ issued 66 second requests in 1999.

⁴⁵    The 30-day initial waiting period, and 20-day period following substantial compliance with second request apply to the vast majority of transactions. However, there are shorter periods for cash offers and for filings where the acquiree is in bankruptcy.

⁴⁶    Richard G. Parker. Presentation to the spring 2000 meeting of the American Bar Association, Spring Meeting 2000. April 7, 2000.

⁴⁷    Federal Trade Commission.Requests for Additional Information: Appeal Procedure.

⁴⁸    Ibid 45.

⁴⁹    The information the parties submit is required to be indexed.

⁵⁰    The FTC can also obtain testimony from the parties through the use of compulsory process.

⁵¹    Federal Trade Commission, Performance Report, Fiscal Year 1999.

⁵²    A Study of the Commission's Divestiture Process is the first "systematic analysis of Commission divestitures since the passage of the Hart-Scott-Rodino pre-merger notification legislation in 1976. It looks at divestitures that were ordered between 1990 and 1994. Based on interviews, conducted in a case-study format, the report discusses factors that have made divestitures more and less successful, and concludes with recommendations for assuring more effective divestitures." Remarks of Richard G. Parker before the International Bar Association. Barcelona, Spain, September 28, 1999.

⁵³    Richard G. Parker. Global Merger Enforcement.  Before the International Bar Association, Barcelona, Spain. September 28, 1999.

⁵⁴    The macro used for closing a file contains information on the volume of commerce and size of market, other quantitative data, the number of persons interviewed and whether there was compliance with the second request. In addition, it records the amount of information filed and whether compulsory process was used on third parties. The decision to accept the recommendation to close a no-interest file (about one to two pages) lies with the section chief but is usually taken by his or her assistant. The assistant is an experienced antitrust attorney who clarifies any outstanding points and raises any matters that are "lose calls" with the chief or assistant chief.

⁵⁵    Antitrust Division, Department of Justice. Annual Report, Fiscal Year 1999 March 20, 1999.

⁵⁶    Ibid.

⁵⁷    Two-digit SIC codes are part of the system of Standard Industrial Classification established in the United States Government Classification Manual, 1987. Examples: 07 Agriculture Services, 13 Oil and Gas.

⁵⁸    58Federal Trade Commission, Requests for Additional Information: Appeal Procedure.

⁵⁹    Competition Bureau. Fee and Service Standards Handbook pursuant to the Competition Act. Release 2. May 1, 1998.

⁶⁰    Competition Bureau. Fee and Service Standards Handbook pursuant to the Competition Act. Release 2. May 1, 1998. Page 3.

⁶¹    As of Fall 2000, the MNU responds by email rather than sending a letter.

⁶²    International Competition Policy Advisory Committee to the Attorney General and Assistant Attorney General for Antitrust. Final Report. 2000. Page 133.

⁶³    Represents only those files completed between November 3, 1997 and March 31, 1998.

⁶⁴    Notifiable Transactions and Advance Ruling Certificates under the Competition Act: Procedures Guide. Competition Bureau, May 2000.

⁶⁵    s.116(3) Where a person chooses not to supply the Commissioner with information required under s.114 and so informs the Commissioner in accordance with subsection (2)or (2.1)and the Commissioner or a person authorized by the Commissioner notifies that person, within seven days after the Commissioner is so informed, that the information is required, the person shall supply the Commissioner with the information.

⁶⁶    The Public Service Survey of 1999 identified that over 45 percent of employees at the Bureau felt that the quality of their work suffered because of too many approval levels. Employees of the Bureau along with a private consultant undertook a Bureau-wide assessment (management, officers and support staff, regions included) via focus groups and interviews to find out how they thought present work processes and work flow for both substantive work processes (case work) and administrative processes (dockets, press releases, travel claims, contracts) could be improved. The results are currently being assessed by Bureau managers. 

⁶⁷    The Bureau's project deals with the handling and identification of documentary and physical evidence obtained or received by the Commissioner in the course of an inquiry or investigation to ensure that the evidence will be admissible and given due weight in any subsequent legal proceedings."Documentary" evidence includes electronic records, as well as traditional paper documents. "Physical" evidence includes other tangible objects.

⁶⁸    The purpose of the BIMS project is to identify the operational and management information requirements of the Bureau in the context of being able to track and generate reports on the work that is being done on a Bureau-wide system accessible at every workstation. This is essentially a redesign of the current tracker systems to allow for the capture of more relevant information,increased inter-branch information sharing, and enhanced report generation capability.

⁶⁹    There were no very complex cases completed during this period. All securitizations have been excluded.

⁷⁰    The word service for the purposes of this document refers to the Bureau's work on an advance ruling certificate request, a prenotification filing or an advisory opinion.

⁷¹    Competition Bureau. Fee and Service Standards Handbook pursuant to the Competition Act. Release 2. May 1, 1998. Page 7.

⁷²    It is not currently possible to determine the exact number of cards that were received in any given year as cards were not numbered or tracked by date. Since April 1, 2000, the Bureau has been numbering and date-stamping these cards upon receipt in order to more accurately conduct statistical analysis. The Bureau considered pre-numbering the cards but rejected this, feeling that stakeholders might be less inclined to complete and return the cards if they thought that the Bureau could trace them to a specific file.Many cards do not include the name of the respondent. As discussed in Chapter 7 - Interviews with the Private Bar,stakeholders are sometimes reticent to provide feedback due to the perception that there could be repercussions on future files.

⁷³    How would you rate the quality of the work received from the Competition Bureau, including the quality of service and the level of analysis? Poor, Fair, Good, Excellent.

⁷⁴    In 1997, Attorney General Janet Reno and Assistant Attorney General for Antitrust  Joel I. Klein formed the International Competition Policy Advisory Committee. The Advisory Committee was asked to consider three topics, namely multi-jurisdictional merger review, the interface of trade and competition issues, and future directions in enforcement cooperation between the U.S. and antitrust authorities, particularly related to anti-cartel prosecution.

⁷⁵    International Competition Policy Advisory Committee to the Attorney General and Assistant Attorney General for Antitrust. Final Report. 2000.

⁷⁶    Paper presented by Warren Grover to the Roundtable Discussion; Toronto, June 16, 2000 entitled: Mega Mergers: Revisiting the Concepts: "My belief is that the Bureau examines too many of these mega mergers where Canada is virtually irrelevant. I suggest that if the target corporation in any proposed merger has less than 20 percent of its revenue derived from Canadian sales and more than 50 percent of its revenue derived from sales in Europe and the United States, the Bureau should not examine the merger in depth.Several Canadian lawyers are billing significant amounts to clients with respect to such mergers, but I believe it is a wasted effort.... The Bureau should however indicate any Canadian concerns it may have to the competition authorities in the dominant geographic markets where the merger entities will operate."

⁷⁷    International Competition Policy Advisory Committee to the Attorney General and Assistant Attorney General for Antitrust. Final Report. 2000. (ICPAC) Page 2.

⁷⁸    J. William Rowley QC, A. Neil Campbell.Multi-jurisdictional Merger Review - Is It Time for a Common Form Filing Treaty?

⁷⁹    John J. Parisi. Enforcement Cooperation Among Antitrust Authorities Presentation to the IBC U.K. Conferences Sixth Annual London Conference on EC Competition Law. London, England. May 19, 1999 (updated March 2000).

⁸⁰    ICPAC page 3.

⁸¹    Ibid, page 47.

⁸²    ICPAC page 156.

⁸³    For example, Rowley and Campbell find that most jurisdictions currently clear at least 95 percent of transactions as non-problematic in an average time of one month or  less. J. William Rowley QC, A. Neil Campbell.Multi-jurisdictional Merger Review - Is It Time for a Common Form Filing Treaty?Page 9.

⁸⁴    ICPAC page 160.

⁸⁵    Ibid page 114.

⁸⁶    The mechanisms by which enforcement agencies cooperate are embodied in the 1995 Organisation for Economic Co-operation and Development Recommendation on Cooperation. A number of agreements also exist namely the 1995 Agreement Between the Government of Canada and the Government of the United States of America Regarding the Application of their Competition and Deceptive Marketing Practices Laws, the 1999 Agreement Between the European Communities and the Government of Canada Regarding the Application of their Competition Laws and the 2000 Arrangement between the Competition Bureau, the Australian Competition and Consumer Commission and the New Zealand Commerce Commission Regarding the Application of their Competition and Consumer Laws. These agreements include notification provisions that require each party to provide information about planned activity that might affect the other's interests. Such provisions also exist in the Chapter on Competition Policy in the Canada-Costa Rica Free Trade Agreement.

⁸⁷    John J. Parisi. Enforcement Cooperation Among Antitrust Authorities. Before the IBC U.K. Conferences Sixth Annual London Conference on EC Competition Law. London, England. May 19, 1999 (updated March 2000).

⁸⁸    ICPAC page 6.

⁸⁹    Ibid page 66.

⁹⁰    Procedures Guide. Notifiable Transactions and Advance Ruling Certificates under the Competition Act. May 1, 2000.

⁹¹    Richard G. Parker, then Director, Bureau of Competition, Federal Trade Commission, in remarks to the American Bar Association in April 2000.

⁹²    Ibid.