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Competition Policy

National Legislation - Canada

Competition Act -- CHAPTER C-34

(Continuation)

Conditional orders

(4) Where, on an application under subsection (1), the Tribunal finds that an agreement meets the conditions prescribed by paragraphs (a) and (b) of that subsection but also finds that, as a result of the implementation of the agreement, there is not likely to be substantial competition remaining in the market or markets to which the agreement relates, the Tribunal may provide, in an order made under subsection (1), that the order shall take effect only if, within a reasonable period of time specified in the order, there has occurred any of the following events, specified in the order:

(a) the divestiture of particular assets, specified in the order;
(b) a wider licensing of patents or registered integrated circuit topographies;
(c) a reduction in tariffs;
(d) the making of an order in council under section 23 of the Financial Administration Act effecting a remission or remissions specified in the order of the Tribunal of any customs duties on an article that is a subject of the agreement; or
(e) the removal of import quotas or import licensing requirements.

R.S., 1985, c. 19 (2nd Supp.), s. 45; 1990, c. 37, s. 32; 1999, c. 2, s. 37.

Registration of modifications

87.

(1) On application by the parties to a specialization agreement that has been registered, and after affording the Commissioner a reasonable opportunity to be heard, the Tribunal may make an order directing that a modification of the agreement be registered.

Order to remove from register

(2) Where, on application by the Commissioner, the Tribunal finds that the agreement or a modification thereof that has been registered

(a) has ceased to meet the conditions prescribed by paragraph 86(1)(a) or (b), or
(b) is not being implemented,

the Tribunal may make an order directing that the agreement or modification thereof, and any order relating thereto, be removed from the register.

R.S., 1985, c. 19 (2nd Supp.), s. 45; 1999, c. 2, s. 37.

Right of intervention

88. The attorney general of a province may intervene in any proceedings before the Tribunal under section 86 or 87 for the purpose of making representations on behalf of the province.

R.S., 1985, c. 19 (2nd Supp.), s. 45.

Register of specialization agreements

89.

(1) The Tribunal shall cause to be maintained at its Registry established pursuant to subsection 14(1) of the Competition Tribunal Act a register of specialization agreements, and modifications thereof, that the Tribunal has directed be registered, and any such agreements and modifications thereof shall be included in the register for the periods specified in the orders.

Public access to register

(2) The register shall be kept open to inspection by any person during normal business hours of the Tribunal.

R.S., 1985, c. 19 (2nd Supp.), s. 45.

Non-application of sections 45 and 77

90. Section 45, and section 77 as it applies to exclusive dealing, do not apply in respect of a specialization agreement, or any modification thereof, that is registered.

R.S., 1985, c. 19 (2nd Supp.), s. 45.

Mergers

Definition of "merger"

91. In sections 92 to 100, "merger" means the acquisition or establishment, direct or indirect, by one or more persons, whether by purchase or lease of shares or assets, by amalgamation or by combination or otherwise, of control over or significant interest in the whole or a part of a business of a competitor, supplier, customer or other person.

R.S., 1985, c. 19 (2nd Supp.), s. 45.

Order

92.

(1) Where, on application by the Commissioner, the Tribunal finds that a merger or proposed merger prevents or lessens, or is likely to prevent or lessen, competition substantially

(a) in a trade, industry or profession,
(b) among the sources from which a trade, industry or profession obtains a product,
(c) among the outlets through which a trade, industry or profession disposes of a product, or
(d) otherwise than as described in paragraphs (a) to (c),

the Tribunal may, subject to sections 94 to 96,

(e) in the case of a completed merger, order any party to the merger or any other person

(i) to dissolve the merger in such manner as the Tribunal directs,
(ii) to dispose of assets or shares designated by the Tribunal in such manner as the Tribunal directs, or
(iii) in addition to or in lieu of the action referred to in subparagraph (i) or (ii), with the consent of the person against whom the order is directed and the Commissioner, to take any other action, or

(f) in the case of a proposed merger, make an order directed against any party to the proposed merger or any other person

(i) ordering the person against whom the order is directed not to proceed with the merger,
(ii) ordering the person against whom the order is directed not to proceed with a part of the merger, or
(iii) in addition to or in lieu of the order referred to in subparagraph (ii), either or both

(A) prohibiting the person against whom the order is directed, should the merger or part thereof be completed, from doing any act or thing the prohibition of which the Tribunal determines to be necessary to ensure that the merger or part thereof does not prevent or lessen competition substantially, or
(B) with the consent of the person against whom the order is directed and the Commissioner, ordering the person to take any other action.

Evidence

(2) For the purpose of this section, the Tribunal shall not find that a merger or proposed merger prevents or lessens, or is likely to prevent or lessen, competition substantially solely on the basis of evidence of concentration or market share.

R.S., 1985, c. 19 (2nd Supp.), s. 45; 1999, c. 2, s. 37.

Factors to be considered regarding prevention or lessening of competition

93. In determining, for the purpose of section 92, whether or not a merger or proposed merger prevents or lessens, or is likely to prevent or lessen, competition substantially, the Tribunal may have regard to the following factors:

(a) the extent to which foreign products or foreign competitors provide or are likely to provide effective competition to the businesses of the parties to the merger or proposed merger;
(b) whether the business, or a part of the business, of a party to the merger or proposed merger has failed or is likely to fail;
(c) the extent to which acceptable substitutes for products supplied by the parties to the merger or proposed merger are or are likely to be available;
(d) any barriers to entry into a market, including

(i) tariff and non-tariff barriers to international trade,
(ii) interprovincial barriers to trade, and
(iii) regulatory control over entry, and any effect of the merger or proposed merger on such barriers;

(e) the extent to which effective competition remains or would remain in a market that is or would be affected by the merger or proposed merger;
(f) any likelihood that the merger or proposed merger will or would result in the removal of a vigorous and effective competitor;
(g) the nature and extent of change and innovation in a relevant market; and
(h) any other factor that is relevant to competition in a market that is or would be affected by the merger or proposed merger.

R.S., 1985, c. 19 (2nd Supp.), s. 45.

Exception

94. The Tribunal shall not make an order under section 92 in respect of

(a) a merger substantially completed before the coming into force of this section; or
(b) a merger or proposed merger under the Bank Act, the Trust and Loan Companies Act or the Insurance Companies Act in respect of which the Minister of Finance has certified to the Commissioner the names of the parties thereto and that the merger is in the best interest of the financial system in Canada; or
(c) a merger or proposed merger approverd under subsection 56.2(6) of the Canada Transportation Act and in respect of which the Minister of Transport has certified to the Commissioner the names of the parties.

R.S., 1985, c. 19 (2nd Supp.), s. 45; 1991, c. 45, s. 549, c. 46, ss. 592, 593, c. 47, s. 716; 1999, c. 2, s. 37; 2000, c. 15, s. 14.

Exception for joint ventures

95.

(1) The Tribunal shall not make an order under section 92 in respect of a combination formed or proposed to be formed, otherwise than through a corporation, to undertake a specific project or a program of research and development if

(a) a project or program of that nature

(i) would not have taken place or be likely to take place in the absence of the combination, or
(ii) would not reasonably have taken place or reasonably be likely to take place in the absence of the combination because of the risks involved in relation to the project or program and the business to which it relates;

(b) no change in control over any party to the combination resulted or would result from the combination;
(c) all the persons who formed the combination are parties to an agreement in writing that imposes on one or more of them an obligation to contribute assets and governs a continuing relationship between those parties;
(d) the agreement referred to in paragraph (c) restricts the range of activities that may be carried on pursuant to the combination, and provides that the agreement terminates on the completion of the project or program; and
(e) the combination does not prevent or lessen or is not likely to prevent or lessen competition except to the extent reasonably required to undertake and complete the project or program.

Limitation

(2) For greater certainty, this section does not apply in respect of the acquisition of assets of a combination.

R.S., 1985, c. 19 (2nd Supp.), s. 45.

Exception where gains in efficiency

96.

(1) The Tribunal shall not make an order under section 92 if it finds that the merger or proposed merger in respect of which the application is made has brought about or is likely to bring about gains in efficiency that will be greater than, and will offset, the effects of any prevention or lessening of competition that will result or is likely to result from the merger or proposed merger and that the gains in efficiency would not likely be attained if the order were made.

Factors to be considered

(2) In considering whether a merger or proposed merger is likely to bring about gains in efficiency described in subsection (1), the Tribunal shall consider whether such gains will result in

(a) a significant increase in the real value of exports; or
(b) a significant substitution of domestic products for imported products.

Restriction

(3) For the purposes of this section, the Tribunal shall not find that a merger or proposed merger has brought about or is likely to bring about gains in efficiency by reason only of a redistribution of income between two or more persons.

R.S., 1985, c. 19 (2nd Supp.), s. 45.

Limitation period

97. No application may be made under section 92 in respect of a merger more than three years after the merger has been substantially completed.

R.S., 1985, c. 19 (2nd Supp.), s. 45.

Where proceedings commenced under section 45 or 79

98. No application may be made under section 92 against a person

(a) against whom proceedings have been commenced under section 45, or
(b) against whom an order is sought under section 79

on the basis of the same or substantially the same facts as would be alleged in the proceedings under section 45 or 79, as the case may be.

R.S., 1985, c. 19 (2nd Supp.), s. 45.

Conditional orders directing dissolution of a merger

99.

(1) The Tribunal may provide, in an order made under section 92 directing a person to dissolve a merger or to dispose of assets or shares, that the order may be rescinded or varied if, within a reasonable period of time specified in the order,

(a) there has occurred

(i) a reduction, removal or remission, specified in the order, of any relevant customs duties, or
(ii) a reduction or removal, specified in the order, of prohibitions, controls or regulations imposed by or pursuant to any Act of Parliament on the importation into Canada of an article specified in the order, or

(b) that person or any other person has taken any action specified in the order that will, in the opinion of the Tribunal, prevent the merger from preventing or lessening competition substantially.

When conditional order may be rescinded or varied

(2) Where, on application by any person against whom an order under section 92 is directed, the Tribunal is satisfied that

(a) a reduction, removal or remission specified in the order pursuant to paragraph (1)(a) has occurred, or
(b) the action specified in the order pursuant to paragraph (1)(b) has been taken,

the Tribunal may rescind or vary the order accordingly.

R.S., 1985, c. 19 (2nd Supp.), s. 45.

Interim order where no application under section 92

100.

(1) The Tribunal may issue an interim order forbidding any person named in the application from doing any act or thing that it appears to the Tribunal may constitute or be directed toward the completion or implementation of a proposed merger in respect of which an application has not been made under section 92 or previously under this section, where

(a) on application by the Commissioner, certifying that an inquiry is being made under paragraph 10(1)(b) and that, in the Commissioner's opinion, more time is required to complete the inquiry, the Tribunal finds that in the absence of an interim order a party to the proposed merger or any other person is likely to take an action that would substantially impair the ability of the Tribunal to remedy the effect of the proposed merger on competition under that section because that action would be difficult to reverse; or
(b) the Tribunal finds, on application by the Commissioner, that there has been a contravention of section 114 in respect of the proposed merger.

Notice of application

(2) Subject to subsection (3), at least forty-eight hours notice of an application for an interim order under subsection (1) shall be given by or on behalf of the Commissioner to each person against whom the order is sought.

Ex parte application

(3) Where the Tribunal is satisfied, in respect of an application for an interim order under paragraph (1)(b), that

(a) subsection (2) cannot reasonably be complied with, or
(b) the urgency of the situation is such that service of notice in accordance with subsection (2) would not be in the public interest,

it may proceed with the application ex parte.

Terms of interim order

(4) An interim order issued under subsection (1)

(a) shall be on such terms as the Tribunal considers necessary and sufficient to meet the circumstances of the case; and
(b) subject to subsections (5) and (6), shall have effect for such period of time as is specified in it.

Duration of order: inquiry

(5) The duration of an interim order issued under paragraph (1)(a) shall not exceed thirty days.

Duration of order: failure to comply

(6) The duration of an interim order issued under paragraph (1)(b) shall not exceed

(a) ten days after section 114 is complied with, in the case of an interim order issued on ex parte application; or
(b) thirty days after section 114 is complied with, in any other case.

Extension of time

(7) Where the Tribunal finds, on application made by the Commissioner on forty-eight hours notice to each person to whom an interim order is directed, that the Commissioner is unable to complete an inquiry within the period specified in the order because of circumstances beyond the control of the Commissioner, the Tribunal may extend the duration of the order to a day not more than sixty days after the order takes effect.

Completion of inquiry

(8) Where an interim order is issued under paragraph (1)(a), the Commissioner shall proceed as expeditiously as possible to complete the inquiry under section 10 in respect of the proposed merger.

R.S., 1985, c. 19 (2nd Supp.), s. 45; 1999, c. 2, ss. 24, 37.

Right of intervention

101. The attorney general of a province may intervene in any proceedings before the Tribunal under section 92 for the purpose of making representations on behalf of the province.

R.S., 1985, c. 19 (2nd Supp.), s. 45.

Advance ruling certificates

102.

(1) Where the Commissioner is satisfied by a party or parties to a proposed transaction that he would not have sufficient grounds on which to apply to the Tribunal under section 92, the Commissioner may issue a certificate to the effect that he is so satisfied.

Duty of Commissioner

(2) The Commissioner shall consider any request for a certificate under this section as expeditiously as possible.

R.S., 1985, c. 19 (2nd Supp.), s. 45; 1999, c. 2, s. 37.

No application under section 92

103. Where the Commissioner issues a certificate under section 102, the Commissioner shall not, if the transaction to which the certificate relates is substantially completed within one year after the certificate is issued, apply to the Tribunal under section 92 in respect of the transaction solely on the basis of information that is the same or substantially the same as the information on the basis of which the certificate was issued.

R.S., 1985, c. 19 (2nd Supp.), s. 45; 1999, c. 2, s. 37.

General

Interim order

104.

(1) Where an application has been made for an order under this Part, other than an interim order under section 100, the Tribunal, on application by the Commissioner, may issue such interim order as it considers appropriate, having regard to the principles ordinarily considered by superior courts when granting interlocutory or injunctive relief.

Terms of interim order

(2) An interim order issued under subsection (1) shall be on such terms, and shall have effect for such period of time, as the Tribunal considers necessary and sufficient to meet the circumstances of the case.

Duty of Commissioner

(3) Where an interim order issued under subsection (1) is in effect, the Commissioner shall proceed as expeditiously as possible to complete proceedings under this Part arising out of the conduct in respect of which the order was issued.

R.S., 1985, c. 19 (2nd Supp.), s. 45; 1999, c. 2, s. 37.

Temporary order

104.1

(1) The Commissioner may make a temporary order prohibiting a person operating a domestic service, as defined in subsection 55(1) of the Canada Transportation Act, from doing an act or a thing that could, in the opinion of the Commissioner, constitute an anti-competitive act or requiring the person to take the steps that the Commissioner considers necessary to prevent injury to competition or harm to another person if

(a) the Commissioner has commenced an inquiry under subsection 10(1) in regard to whether the person has engaged in conduct that is reviewable under section 79; and
(b) the Commissioner considers that in the absence of a temporary order

(i) injury to competition that cannot adequately be remedied by the Tribunal is likely to occur, or
(ii) a person is likely to be eliminated as a competitor, suffer a significant loss of market share, suffer a significant loss of revenue or suffer other harm that cannot be adequately remedied by the Tribunal.

Notice not required

(2) The Commissioner is not obliged to give notice to or receive representations from any person before making a temporary order.

Notice to persons affected

(3) On making a temporary order, the Commissioner shall promptly give written notice of the order, together with the grounds for it, to every person against whom it was made or who is directly affected by it.

Duration of temporary order

(4) Subject to subsections (5) and (6), a temporary order has effect for 20 days.

Extension and revocation

(5) The Commissioner may extend the 20-day period for one or two periods of 30 days each or may revoke a temporary order. The Commissioner shall promptly give written notice of the extension or revocation to every person to whom notice was given under subsection (3).

When application made to Tribunal

(6) If an application is made under subsection (7), the temporary order has effect until the Tribunal makes an order under that subsection.

Confirmation

(7) A person against whom the Commissioner has made a temporary order may, within the period referred to in subsection (4), apply to the Tribunal to have the temporary order varied or set aside and the Tribunal shall

(a) if it is satisfied that one or more of the conditions set out in paragraph (1)(b) existed or are likely to exist, make an order confirming the temporary order, with or without variation as the Tribunal considers necessary and sufficient to meet the circumstances, and fixing the effective period of its order for a maximum of 60 days after the day on which it is made; and
(b) if it is not satisfied that one or more of the conditions set out in paragraph (1)(b) existed or are likely to exist, make an order setting aside the temporary order.

Notice

(8) The applicant shall give written notice of the application to every person to whom notice was given under subsection (3).

Commissioner is respondent

(9) In the event of an application under subsection (7), the Commissioner is the respondent.

Representations

(10) At the hearing of an application under subsection (7), the Tribunal shall provide the applicant, the Commissioner and any person directly affected by the temporary order with a full opportunity to present evidence and make representations before the Tribunal makes an order under that subsection.

Prohibition of extraordinary relief

(11) Except as provided for by subsection (7),

(a) a temporary order made by the Commissioner shall not be questioned or reviewed in any court; and
(b) no order shall be made, process entered or proceedings taken in any court, whether by way of injunction, certiorari, mandamus, prohibition, quo warranto, declaratory judgment or otherwise, to question, review, prohibit or restrain the Commissioner in the exercise of the jurisdiction granted by this section.

Powers and duties not affected by order

(12) The making of a temporary order does not in any way limit, restrict or qualify the powers, duties or responsibilities of the Commissioner under this Act, including the Commissioner's power to conduct inquiries and to make applications to the Tribunal in regard to conduct that is the subject of the temporary order.

Registration of orders

(13) The Commissioner shall file each temporary order with the Registry of the Tribunal. Once registered, the order is enforceable in the same manner as an order of the Tribunal.

Duty of Commissioner

(14) When a temporary order is in effect, the Commissioner shall proceed as expeditiously as possible to complete the investigation arising out of the conduct in respect of which the temporary order was made.

Immunity

(15) No action lies against Her Majesty in right of Canada, the Minister, the Commissioner, any Deputy Commissioner, any person employed in the public service of Canada or any person acting under the direction of the Commissioner for anything done or omitted to be done in good faith under this section.

2000, c. 15, s. 15.

Consent orders

105. Where an application is made to the Tribunal under this Part for an order and the Commissioner and the person in respect of whom the order is sought agree on the terms of the order, the Tribunal may make the order on those terms without hearing such evidence as would ordinarily be placed before the Tribunal had the application been contested or further contested.

R.S., 1985, c. 19 (2nd Supp.), s. 45; 1999, c. 2, s. 37.

Rescission or variation of order

106. Where, on application by the Commissioner or a person against whom an order has been made under this Part, the Tribunal finds that

(a) the circumstances that led to the making of the order have changed and, in the circumstances that exist at the time the application is made under this section, the order would not have been made or would have been ineffective to achieve its intended purpose, or
(b) the Commissioner and the person against whom an order has been made have consented to an alternative order, the Tribunal may rescind or vary the order accordingly.

R.S., 1985, c. 19 (2nd Supp.), s. 45; 1999, c. 2, s. 37.

Evidence

107. In determining whether or not to make an order under this Part, the Tribunal shall not exclude from consideration any evidence by reason only that it might be evidence in respect of an offence under this Act or in respect of which another order could be made by the Tribunal under this Act.

 R.S., 1985, c. 19 (2nd Supp.), s. 45.

Continuation: PART IX - NOTIFIABLE TRANSACTIONS