Information Bulletin on Merger Remedies in Canada: VII. International Coordination and Cooperation

75. The increasing number of global mergers has enhanced the need for communication, coordination, and cooperation among competition authorities in different jurisdictions. The Bureau uses a number of cooperation arrangements or agreements with its foreign counterparts to help facilitate information exchange, investigations, and ultimately the coordination of remedies.⁴² When the Bureau requires confidential information from its foreign counterparts, such cooperation is facilitated by the provision of waivers by the merging and/or affected third parties to the antitrust authorities in foreign jurisdictions.⁴³ When foreign competition agencies require confidential information from the Bureau, such cooperation is subject to the confidentiality provisions of section 29 of the Act.

76. The Bureau will coordinate with other competition authorities on remedies when a worldwide or multi-jurisdictional merger is likely to have anti-competitive effects in Canada that are similar, or related to, those that are likely to result in other jurisdictions. Coordination can involve communicating, as developments occur within jurisdictions, participating in joint discussions with the merging parties, and fashioning parallel remedies in Canada that are similar to those in other jurisdictions.

77. The greater the extent to which competition issues identified in Canada are similar to those in other jurisdictions, the greater the likelihood that coordinated remedies will be effective. As Canadian assets are involved in many global mergers, coordination of remedies is of particular importance for the Bureau, since it increases the likelihood that remedies will be consistently applied across jurisdictions. Consistent and coordinated remedies help avoid potential frictions stemming from situations whereby a remedy in one jurisdiction may not be acceptable in another. Consistent and coordinated remedies can also lead to a more effective resolution than would be attained through independent enforcement action. Furthermore, such remedies reduce uncertainty for businesses.

78. To resolve competition concerns within Canada, the Bureau may either take specific action or it may determine that action beyond what will be taken in foreign jurisdictions is not required. While enforcement decisions are made on a case-by-case basis, the Bureau is more likely to formalize negotiated remedies within Canada when the matter raises Canada-specific issues, when the Canadian impact is particularly significant, when the asset(s) to be divested reside in Canada, or when it is critical to the enforcement of the terms of the settlement.⁴⁴ In contrast, the Bureau may rely on the remedies initiated through formal proceedings by foreign jurisdictions when the asset(s) that are subject to divestiture, and/or conduct that must be carried out as part of a behavioural remedy, are primarily located outside of Canada.⁴⁵ However, the Bureau will do so only if it is satisfied that the actions taken by foreign authorities are sufficient to resolve the competition issues in Canada.

79. When coordinating cross-border remedies, a primary objective is to prevent conflicts that may arise when remedies are intended to address competition concerns in different jurisdictions. For example, due to potential differences in concentration and/or market share levels in relevant markets in Canada, the United States, and/or other countries, a potential conflict may arise when a single buyer must be approved for a North American or worldwide divestiture. Furthermore, cross-border remedies often require that the Bureau coordinate with its foreign counterparts to ensure that a single trustee or monitor is appointed to oversee the divestiture of the worldwide assets. Having a common trustee or monitor who understands the objectives of the remedies for each jurisdiction can reduce the potential for conflicts to arise when determining acceptable buyers for the divested assets.

80. While consistent and coordinated remedies are desirable, each jurisdiction must retain the authority and ability to ensure remedies that are sufficient within its own borders. Importantly, the jurisdiction of the Bureau, and ultimately of the Tribunal, requires that the competition test, as set out in section 92 of the Act, is met. Therefore, within the framework of its own laws, and to the extent compatible with its own interests, the Bureau will generally take another jurisdiction’s interests and policies into account only to the extent that such interests and policies do not limit or prevent Canadian competition concerns from being remedied.

⁴² The Bureau’s current cooperation agreements and arrangements can be found at: http://www.competitionbureau.gc.ca/internet/index.cfm?itemID=141&lg=e

⁴³ Such waivers allow for the exchange of confidential information from foreign competition agencies to the Bureau, which would otherwise be prohibited by law in the respective foreign jurisdictions.

⁴⁴ This could arise in circumstances where issues with a multi-jurisdictional merger are the same in Canada as a foreign jurisdiction. In one case, the foreign jurisdiction may conclude that because of costs or the size of markets, it should order the sale of a business, including intellectual property rights, on a worldwide basis. In a different case, the foreign authority might conclude that because of costs or scale of business, it would be sufficient to simply order the sale of the business, including the intellectual property rights, within its own jurisdiction. In the latter case, Canada would need its own Canada-specific remedy.

⁴⁵ Notably, the Act provides for a three-year period during which the Bureau can challenge a transaction. Therefore, in the event that parties do not carry through with remedies that apply to Canada, but are enforceable only in foreign jurisdictions within that time frame, the Bureau may challenge the transaction at the Tribunal.