In an age of increasing international competitive pressures, globalization of markets, and generally decreasing trade barriers, some companies may find it difficult to match the product and service offerings of their rivals. Certain firms have turned to cooperative arrangements, more generally referred to as strategic alliances, as a means to improve their competitiveness in these circumstances.

Canadian firms' use of strategic alliances to improve their competitiveness will often lead to positive innovation and efficiency gains without accompanying negative effects on competition. As a result, these alliances are unlikely to raise concerns among competition authorities. Indeed, it is the experience of the Bureau of Competition Policy (the Bureau) that most strategic alliances do not raise issues under the Competition Act (the Act) (note 1). However, in circumstances where alliances are likely to lead to anticompetitive effects, intended or otherwise, the Bureau needs to be in a position to respond.

Uncertainty on the part of some business people regarding the position of the Director of Investigation and Research (the Director) on strategic alliances may increase the risk that alliances which are beneficial to the economy may be abandoned. In order to provide greater certainty and avoid a chilling effect on these transactions, the Director believes that, as part of the Bureau's Program of Compliance, it would be helpful to publish a policy statement to clarify the enforcement approach taken to inter-firm cooperative arrangements, be they called strategic alliances, joint ventures, or any other name.

Strategic alliances and other forms of inter-firm cooperation may take numerous forms and have varying impacts in markets. It is the Bureau's experience that the majority of strategic alliances are either neutral or procompetitive, often designed to take advantage of particular firms' competencies or to effect efficiencies which may lead to enhanced competitiveness in international markets. However, there may be instances where serious competition issues are raised in respect of strategic alliances.

This document provides general guidance on the status of strategic alliances under the Act. While this statement will address a number of key issues raised under the various sections of the Act which may potentially apply to such arrangements, particularly horizontal alliances, it cannot anticipate all questions that may arise in the marketplace. It is not a binding statement of how discretion will be exercised in a particular situation. Guidance regarding a specific situation may be requested from the Bureau through its Program of Advisory Opinions. This Bulletin is also not intended to bind or affect in any way the discretion of the Attorney General of Canada in the prosecution of matters under the Act. Nor is it intended to be a substitute for the advice of legal counsel. The approach outlined does not represent a substantive change in enforcement policy or a restatement of the law. Final interpretation of the law is the responsibility of the courts and the Competition Tribunal.

¹ "The Act" refers to the Competition Act, R.S.C., 1985, c. C-34, as am. R.S.C. 1985, c. 27 (1st Supp.), ss. 187, 198; R.S.C. 1985, c. 19 (2nd Supp.), Part II; R.S.C. 1985, c.34 (3rd Supp.), s. 8; R.S.C. 1985, c. 1 (4th Supp.), s. 11; R.S.C. 1985, c. 10 (4th Supp.), s. 18; S.C. 1990, c. 37 ss. 27-32, S.C. 1992, c.14, s.1. (back to text)