The DOJ/FTC 1992 Horizontal Merger Guidelines: A Canadian Perspective

Date01 September 1993
DOI10.1177/0003603X9303800307
Published date01 September 1993
Subject MatterArticle
The Antitrust BulietiniFa1l1993
The
DOJ/FTC
1992
Horizontal Merger Guidelines:
aCanadian perspective
BY PAUL S. CRAMPTON*
Introduction
665
This article provides a brief commentary, from a Canadian per-
spective,
of
the 1992 Horizontal Merger Guidelines! (the 1992
Guidelines) issued jointly by the Department
of
Justice
(001)
and
* Davies. Ward &Beck (Toronto).
AUTHOR'S NOTE: From September 1987 to February 1991.1 held various
positions in the Canadian Bureau
of
Competition Policy, including Spe-
cial Advisor to the Director
of
Investigation and Research. In the latter
capacity, my responsibilities included being the principal drafter
of
the
1991 Merger Enforcement Guidelines. The views expressed in this article
are solely mine and do not necessarily reflect those
of
the Bureau
of
Competition Policy.
Department of Justice and Federal Trade Commission Horizontal
Merger Guidelines, 62 Antitrust &Trade Reg. Rep. (BNA) No. 1559
(April 2, 1992).
e1993 by Federal Legal Publications,Inc.
666
:The antitrust bulletin
the Federal Trade Commission (FTC). More specifically, this arti-
cle briefly compares various aspects
of
the 1992 Guidelines to the
1991 Canadian Merger Enforcement Guidelines- (the Canadian
Guidelines) and attempts to provide some insights into the under-
lying rationale for the differences between the two documents. In
some areas, the approach of the 1992 Guidelines is so innovative
and pathbreaking that the difference from the Canadian Guide-
lines is explainable by the fact that the new U.S. approach had not
even been considered.
In many very important respects, the general approaches
of
the
Canadian Guidelines and the
1992
Guidelines are similar and
stand in sharp contrast to other antitrust guidelines that have been
issued in the U.S. and elsewhere. This similarity is no accident. In
addition to the similar wording in Section 92(1) of the Competi-
tion Act and Section 7
of
the Clayton Act, the significant har-
mony between the two sets
of
Guidelines appears to have its roots
in common objectives. When the DOJ undertook to update its
1968 Merger Guidelines! in
1981-1982,
two principal goals were
set: "first to bring the Guidelines into line with subsequent devel-
opments in antitrust law and economics; and second, to reduce the
uncertainty surrounding the evaluation
of
mergers and acquisi-
tions by the Departrnent."4
These goals were carried through to the 1992 Guidelines.> The
attainment
of
these goals promotes public confidence in the
2Department
of
Supply and Services
Canada,
1991.
3Reprinted in 2Trade Reg. Rep. (CCH)
~
4510 (Aug. 9, 1982).
4Baxter, Responding to the Reaction: The Draftsman's View, 71
CAUF.
L.
REV.
618 (1983).
sSee 60 Minutes with the Honorable Janet D. Steiger, Chairman.
Federal Trade Commission, 61
ANTITRUST
L.J. 187, 189 (1992); and
60 Minutes with the Honorable James F. Rill, Assistant Attorney Gen-
eral, Antitrust Division. U.S. Department
of
Justice, 61
ANTITRUST
L.J.
229,231-32
(1992).
C/.
James,
Overview
of
the 1992 Horizontal Merger
Guidelines, 61
ANTITRUST
LJ.
447 (1992); and Interview: Steven New-
born, 6
ANTITRUST
20 (Summer 1992).
Canadian perspective :667
merger review process, facilitates business planning, guides busi-
ness behavior and increases the quality and accuracy
of
decision
making on the government side. With a little luck, it may also
influence the development
of
the law. These are objectives that
drafters of the Canadian and U.S.6 merger guidelines appear to
share, although the Canadian Guidelines have not had any success
to date in terms of the latter goal."
In formulating and pursuing goals for antitrust guidelines, care-
ful attention must be given to identifying the target audience. In
short, the broader the target audience, the less sophisticated, com-
plex and helpful the document can be. The target audience for the
Canadian Guidelines is primarily competition law lawyers, indus-
trial organization economists and other merger counselors, includ-
ing senior business executives. The Bureau of Competition Policy
(the Bureau) has other communications tools to provide a broader
cross section
of
the public with an enhanced understanding
of
its
merger review policy, e.g., press releases, backgrounders, annual
reports, speaking engagements and periodic interviews given to
the press by the Director of Investigation and Research (the Direc-
tor), the head of the Bureau or his staff.
6See Rill, supra note 5.
7Unfortunately, the Canadian Guidelines have yet to receive much
attention from the courts or the Competition Tribunal (the Tribunal).
Indeed, the Tribunal appears to have made an effort to avoid referring to
the Canadian Guidelines, preferring instead to refer to foreign sources.
See Director
of
Investigation and Research v. Hillsdown Holdings
(Canada) Ltd. et al. (1992),41 C.P.R. (3d) 289, at
297-98,301,310,315,
324-25 &
338~3.
The exception to this is the Tribunal's explicit (obiter
dictum) rejection of the Director's approach to the efficiency gains provi-
sions in §96 of the Competition Act (id. at 337 et seq.) and its rejection
of price/time bright lines, such as five percent, 1 year and 2 years (id. at
328-29). On the latter matter, the Tribunal observed, without specifically
mentioning the Canadian or U.S. merger guidelines: "The tribunal does
not find it useful to apply rigid numerical criteria although these may be
useful for enforcement purposes." [d. See also Director of Investigation
and Research v. Laidlaw Waste Systems Ltd. (1992),40 C.P.R. (3d) 289,
at 320.

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