strict than in criminal cases, in which convictions require proof “beyond a
reasonable doubt.” The Competition Tribunal adjudicates such civil cases,
and the Commissioner of the Competition Bureau now acts as a
“watchdog” for the economy, looking out for mergers or trade practices
that are likely to have detrimental effects on overall welfare. In such
cases, the Commissioner sends the alleged violations to the Competition
Tribunal for adjudication.
In the case of a large merger that might substantially lessen competition,
the firms are required to notify the Competition Bureau of their intention
to merge. The Bureau then reviews the proposed merger, evaluates its
probable effect on the economy, and then allows or disallows it.
Another important aspect of the Competition Act is that economic effects
are considered to be directly relevant in judging the acceptability of a
proposed merger. When reviewing a merger, the Competition Bureau is
obliged to consider such things as effective competition after the merger,
the degree of foreign competition, barriers to entry, the availability of
substitutes, and the financial state of the merging firms.
The Competition Bureau also considers any reduction in costs that a
merger might generate. Even in a situation where there are considerable
entry barriers to an industry, a merger may bring benefits to consumers
even though it raises the industry’s measured concentration. If, by
merging, two firms can achieve scale economies that were not achievable
separately, reductions in average total costs may get passed on to
consumers in the form of lower prices.