Tuesday, September 25, 2012
Posted by D. Daniel Sokol
Richard Elliott (Davies Ward) discusses Canadian Competition Tribunal Orders Divestiture in Waste Merger: Some Lessons Learned.
ABSTRACT: The Canadian Competition Tribunal (the "Tribunal") has issued its first decision in a fully contested application under the merger provisions of the Competition Act (the "Act") in over a decade. On May 29, 2012, further to an application by the Commissioner of Competition (the "Commissioner") challenging the acquisition (the "Merger") by CCS Corporation ("CCS") of Complete Environmental Inc. ("Complete"), the owner of a landfill site in northeastern British Columbia known as Babkirk, the Tribunal ordered CCS to divest Complete.
The Commissioner's application raised a number of legal issues, including the threshold and analysis for establishing that a merger has prevented future competition, as opposed to lessening existing competition in the marketplace. Importantly, the case also demonstrates the Commissioner's willingness to challenge mergers that are not subject to notification under the Act and that have already been completed. Finally, the case also confirms the Commissioner's readiness to seek the dissolution of a merger as an alternative to divestiture (even though the Tribunal did not grant dissolution in this particular instance). Accordingly, the potential for a post-closing challenge by the Commissioner should be of significance to all parties to a transaction, including vendors, where the transaction may have anticompetitive effects.