The Treatment of Strategic Alliances under the
Canadian Competition Act
Date:
April 1 2004
The purpose of this paper is to alert in-house counsel to the competition law issues that may arise from the formation of strategic alliances between competing firms. While most do not, a strategic alliance can attract criminal and/or civil liability under the Competition Act (the “Act”). The primary provisions in the Act that deal with arrangements among competitors are Section 45, the conspiracy provision and Section 92, dealing with mergers.
In this paper we offer some suggestions to enable in-house counsel to identify when a strategic alliance may be characterized as a pro-competitive arrangement, and when it may be viewed as a merger or conspiracy under the Act. This includes a discussion of the treatment of strategic alliances, by the courts, the Competition Tribunal and the Competition Bureau (“Bureau”), and a brief overview of the treatment of strategic alliances under the American antitrust regime. We will also discuss how proposed future amendments to the conspiracy provision may impact the treatment of strategic alliances by the courts and the Bureau. Finally, Appendix “A” sets out some practical guidelines regarding communications between competitors.
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