On March 25, 2014, the Canadian Competition Bureau (Bureau) and the United States' Department of Justice's Antitrust Division (DOJ) and Federal Trade Commission (FTC) published a document describing their best practices on cooperation during the review of cross-border mergers (Best Practices Document). The Best Practices Document reflects the current practices of the agencies when cooperating on the review of cross-border mergers and provides guidance to merging parties to facilitate such cooperation.

The implications for businesses are as follows:

  • close coordination and advance planning between Canadian and U.S. counsel is critical in cross-border mergers;
  • antitrust agencies in Canada and the U.S. should be apprised of the progress of reviews being conducted in the other jurisdiction; and
  • coordination and cooperation between the Canadian and U.S. agencies is particularly important in cases where remedies may be imposed, as such cooperation may speed the resolution of the agencies' reviews and ensure a consistent outcome.

KEY POINTS

The Best Practices Document is the first publication by the Canadian and U.S. agencies specifically addressing the interaction of their merger review processes. It acknowledges that when the Bureau and a U.S. agency are reviewing the same merger "both have an interest in reaching, insofar as possible, consistent analyses and outcomes," while also noting that differing market conditions in both countries may nevertheless result in different outcomes. Given this shared interest, the Best Practices Document notes that cooperation can increase "the efficiency of the merger review process and reduce the burden on merging parties. . . ."

The remainder of the Best Practices Document describes how the agencies cooperate at different stages of the procedure, and how merging parties can facilitate such cooperation and the benefits that might accrue to merging parties. Highlights include:

Emphasizing Frequency and Closeness of Cooperation

The Best Practices Document describes how routine and systemized cross-border cooperation has become, noting that in cross-border merger cases the agencies will "ordinarily . . . contact one another promptly" and that the "relevant staff typically seek to agree on a tentative timetable for regular inter-agency consultations, which takes into account the nature and timing of the merger."

Information Collection

The Best Practices Document notes that "efficient investigatory coordination will benefit the merging parties, third parties, and the reviewing agencies." To this end, it provides that "the agencies may, where possible, seek to coordinate [U.S. second requests and Canadian supplementary information requests], whether before or after issuance, by aligning language, relevant search periods, custodians, data formats, and other aspects of those requests."

Remedies

The Best Practices Document provides that the agencies "strive to ensure that the remedies they accept do not impose inconsistent or conflicting obligations on the merging parties." To avoid such conflict, the Best Practices Document provides that "the reviewing agencies will, at minimum, seek to keep one another informed of remedy discussions. . . ." Moreover, the Best Practices Document provides that the agencies will cooperate throughout the remedial process." Importantly, it provides that "when consistent with its obligations to resolve competition issues in its own country, the reviewing agency may take into account the extent to which remedies obtained in the other fully address its concerns."

Role of Parties

The Best Practices Document explains that merging parties can facilitate cooperation, and that such cooperation may benefit merging parties. It notes that the U.S. agencies require waivers to cooperate fully with the Bureau, and that "it has become routine practice for parties to grant [such] voluntary waivers. . . ." The Best Practices Document advises that coordination can be facilitated by aligning the Canadian and U.S. merger procedures. This could include submitting notifications in both countries simultaneously, aligning the timing of compliance with Canadian supplementary information requests and U.S. second requests, and coordinating the timing and substance of remedy proposals being made to agencies in both countries.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.