PIAC Calls for Changes to Competition Bureau Merger Guidelines

In a brief filed, August 31, 2011, in response to a consultation on draft Merger Enforcement Guidelines (MEGs), PIAC has called for changes to the way the Bureau assesses the net effect of proposed mergers on the market. Now, mergers that might may cause prices to increase may be allowed if it can be shown that the merged parties will become more efficient, and those efficiency gains will be greater than the loss to competition shown, for example, by the product price increase.
The problem is that the efficiency gains might not flow to consumers that are paying the higher prices. In the United States, and Europe only those efficiency gains that increase consumer welfare are considered for the purpose of offsetting loss of competition problems such as price increases. PIAC suggests that Canada fall in line with these jurisdictions, not only to protect consumers, but also to prevent mergers involving foreign investment when the efficiency gains flowing to the merged entity may not be going to benefit the domestic economy. The full brief can be found here.