Merger Efficiencies in Canada

• Author: Ralph A. Winter,Roger Ware
• Published date: 01 September 2016
• Date: 01 September 2016
• DOI: http://doi.org/10.1177/0003603X16657216
• Subject Matter: Articles

Article

Merger Efficiencies in Canada:

Lessons for the Integration of

Economics into Antitrust Law

Roger Ware* and Ralph A. Winter**

Abstract

In terms of solidifying the economic foundations of competition policy, Canadian merger law is much

further advanced than merger law in any other jurisdiction. This article evaluates the developments in

the Canadian law and draws both positive and negative lessons for integrating economic principles into

merger law generally. The balancing weights test adopted in Canadian law for incorporating efficiencies

into merger assessment has firm support in economics. But the implementation of this test has run into

problems. A sharp wedge remains in Canada between the law and the economics of merger evaluation.

Keywords

merger law, competition policy, efficiencies, economic foundations

Introduction

Roger Blair’s extraordinary record of contributions to antitrust economics includes a recent article on

welfare standards in U.S. and E.U. antitrust enforcement.

1

As Roger and his frequent coauthor Daniel

Sokol document in this article, merger law in both U.S. and E.U. has changed substantially since the

1960s. Economic theory traditionally had little influence on merger decisions in either jurisdiction

because of political considerations or simply the idea that big was bad. Merger law now rests more

firmly on economic foundations. Yet in Europe, Blair and Sokol conclude, political goals still influ-

ence merger decisions. And in both jurisdictions, as Blai r, Sokol, and other scholars have noted,

merger decisions appear to depend o n the impact of mergers on consumers, rat her than on total

welfare. Economists generally favor a total welfare standard, which includes profits as well as con-

sumer surplus.

*Professor of Economics, Queen’s University, Kingston, Canada

**Canada Research Chair in Business Economics and Public Policy, Sauder School of Business, UBC, Vancouver, Canada

Corresponding Author:

Roger Ware, Professor of Economics, Queen’s University, Kingston, ON K7L 3N6, Canada.

Email: ware@econ.queensu.ca

1. Roger D. Blair & D. Daniel Sokol, Welfare Standards in U.S. and E. U. Antitrust Enforcement, 102 FORDHAM L. REV.81

(2013).

The Antitrust Bulletin

2016, Vol. 61(3) 365-375

ªThe Author(s) 2016

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DOI: 10.1177/0003603X16657216

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