OTTAWA — Lax merger laws in Canada underestimate the harm to competition caused by mergers and overestimate their benefits, a new report says.
Gaps in Canada’s merger laws have failed to prevent the kind of acquisitions that allow big firms to “extinguish competitive threats and entrench their dominance,” according to the Centre for International Governance Innovation.
Canada has fallen “way behind” other jurisdictions such as the United States, said Keldon Bester, a fellow with the centre and the author of the report.
He compared Canada’s existing regime to a set of faulty brakes. “Our laws today are like brakes on a car going downhill. We know we’re going downhill, but we’d like to go there a little bit slower,” he said in an interview.
The “permissiveness” of merger laws is especially concerning in the context of a growing digital economy, which is fraught with unique challenges, his report adds.
Mergers, which are transactions that see two companies combined into one, can be subject to review by Canada’s competition watchdog to determine whether they would be harmful to competition.
However, since the introduction of the Competition Act in 1986, the Competition Bureau has only ever challenged 18 mergers. And what’s especially alarming, the report says, is that the bureau has never won a challenge on final judgement.
A recent poll suggests Canadians are concerned about the state of affairs.
According to an Ipsos survey conducted in January, 88 per cent of respondents agreed that more business competition is needed “because it’s too easy for big businesses to take advantage of Canadians.”
The same proportion agreed that more competition between businesses could lead to more choice and lower prices for consumers.
The survey of 1,001 Canadians aged 18 and older was conducted between Jan. 14 and 17. Ipsos says its online results are weighted and are comparable to a traditional poll with a margin of error of plus or minus 3.5 percentage points, 19 times out of 20.
One of the issues with the Competition Bureau is the threshold at which it must be notified of a transaction, the CIGI report says.
Under the Competition Act, parties to a proposed merger must notify the Competition Bureau if a transaction meets certain financial thresholds. But those thresholds do not include the value of the transaction itself, the report says.
That’s in contrast to the U.S., where the Federal Trade Commission is already notified of mergers that exceed a certain transaction value.
Early this year, the commission and the U.S. Justice Department announced a joint public inquiry to modernize merger guidelines so as to “better detect and prevent anti-competitive deals.”
By comparison, Canada is “way behind,” Bester said.
Another problem with the Competition Bureau is that “the bar to intervene in a merger is quite high,” added Bester, a researcher who studies competition and monopoly powers in Canada.
That’s because current laws take into consideration the increased efficiency that may come from a merger, he said. Harms from reduced competition are permitted if the proposed merger will lead to cost savings that are deemed to be greater.
There’s also a bias against blocking mergers outright, he said.
Instead, the laws favour negotiated agreements that include concessions or remedies that would address some of the competition concerns. These remedies don’t have to fully address the reduction in competition that would be caused by the merger, the report says.
The report suggests several changes to Canada’s merger laws.
The recommendations include expanding the range of transactions the Competition Bureau is notified of, extending the time window it has to block a harmful merger and changing the criteria used for assessing whether a transaction should be blocked.
The most high-profile proposed merger in Canada right now is arguably Rogers’s proposed takeover of Shaw, a prospective transaction valued at $26 billion.
Bester said that if Canada had stronger merger laws, the Rogers-Shaw deal would have automatically been “dead in the water” given the lack of competition in the telecommunications industry.
“If we had stronger merger laws, this merger wouldn’t be proposed in the first place.”
Nonetheless, Canada’s competition watchdog has been trying to block the deal, arguing that it will substantially lessen competition and lead to higher phone bills.
Rogers and Shaw are expected to appear before the Competition Tribunal in November, where they will argue in favour of the transaction.
Although the federal Liberals have made recent amendments to other parts of the Competition Act, Canada hasn’t touched merger laws — a problem that Bester blames on a “legal and financial apparatus” that benefits from their permissiveness.
Banks, law firms and private equity groups “are interested in very loose merger laws because that increases their bottom line,” said Bester.
“We really haven’t done anything today on the merger side, so Canada really is behind the ball.”
This report by The Canadian Press was first published Oct. 1, 2022.
MILAN (AP) — Bologna’s preparations for its Champions League debut are not going well though it managed to spoil Como’s first Serie A home match in 21 years on Saturday.
Bologna came from two goals down to salvage a 2-2 draw to gather three points from its opening four matches.
Bologna hosts Shakhtar Donetsk on Wednesday. Its only other appearance in Europe’s top competition was in 1964 in the preliminary round of the old European Cup.
AC Milan is also winless as it prepares for a Tuesday Champions League match against Liverpool. The Rossoneri hosted promoted Venezia later. Juventus drew at Empoli 0-0.
Como made a great start in the fifth minute when Patrick Cutrone attempted to roll the ball across the six-yard box but it took a huge deflection off Bologna defender Nicolò Casale for an own goal.
Bologna thought it was gifted a way back into the match on the stroke of halftime when referee Marco Piccinini signalled for a penalty following an Alberto Moreno handball, but he revoked his decision and instead gave a free kick because the handball was just outside the area.
Bologna improved after the break but found itself further behind when Cutrone raced onto a through ball and cut inside past a defender and fired into the far bottom corner.
Tommaso Pobega hit the post for Bologna, which finally pulled one back in the 76th through substitute Santiago Castro.
Another substitute helped the visitors snatch a point when Samuel Iling-Junior curled a fine strike into the top left corner in stoppage time.
Unbeaten sides
Juventus, and more surprisingly Empoli, are among six unbeaten sides.
Empoli held Monza and Bologna to draws either side of a shock 2-1 win at Roma. Juventus’ perfect start to the season was ruined by Roma in a goalless draw before the international break.
On Saturday, there were few clearcut chances in Empoli although home goalkeeper Devis Vásquez made spectacular saves to fingertip out a Federico Gatti header and deny Dusan Vlahovic in a one on one with the Juventus forward.
Empoli had a good opportunity in the 73rd minute following an Alberto Grassi one-two with Pietro Pellegri but the finish was straight at Mattia Perin.
The host could have won it right at the death but Gatti flew in with a great sliding block to keep out Emanuel Gyasi’s close-range effort.
Juventus hosts PSV Eindhoven in the Champions League on Tuesday.
MANCHESTER, England (AP) — Not good enough. That was Arne Slot’s verdict after his first defeat as Liverpool manager on Saturday.
A shock 1-0 loss at home to Nottingham Forest in the English Premier League ended Slot’s perfect record since succeeding Jurgen Klopp at Anfield at the end of last season.
“We had a lot of ball possession but only managed to create three (or) four quite good chances, so that is by far not enough if you have so much ball possession,” said the Dutchman, who suggested his team should not be losing to the likes of Forest.
“If you lose a home game it’s always a setback, especially if you face a team … we never know, maybe they will go all the way to fight for Champions League tickets, but normally this team is not ending up in the top 10, so if you lose a game against them that’s a big disappointment.”
Slot won his first three games in charge, including a memorable 3-0 victory against Manchester United before the international break.
But that run came to an end after Callum Hudson-Odoi struck in the 72nd with a curling effort from the edge of the box and beyond goalkeeper Alisson.
Liverpool’s defeat leaves Manchester City as the only team with a 100% record in the league after a 2-1 win against Brentford kept the defending champion at the top of the table.
United won at Southampton 3-0 to end its two-game losing streak.
Unstoppable Haaland
Erling Haaland moved to 99 goals for City after scoring twice against Brentford.
The Norwegian’s double came after Yoane Wissa fired Brentford ahead with just 22 seconds on the clock.
Haaland scored his 98th and 99th goals in his 103rd City appearance in all competitions. And he was the width of the post away from his third consecutive hat trick after trebles against Ipswich and West Ham.
“He’s been really, really good. Yeah, I would say he’s the best (he’s been), but it’s only four fixtures (this season),” City manager Pep Guardiola said.
Haaland, who has been nominated for the Ballon d’Or, has nine goals in four league games. He has topped the league scoring charts in each of his two seasons at City since joining from Borussia Dortmund in 2022 for $63 million.
Haaland’s first goal after 19 minutes evened the game following Wissa’s opener, which stunned the Etihad Stadium crowd. Haaland turned and swept a shot past goalkeeper Mark Flekken after a slight deflection off Ethan Pinnock.
He was then too strong for Pinnock when shaking off the defender and running through for his second in the 32nd.
He was inches away in the 81st; the shot came back off the post after beating the keeper.
Rashford snaps run
Marcus Rashford snapped a 12-game barren run in front of goal as United beat Southampton.
Rashford doubled United’s lead at Saint Mary’s after Matthijs de Ligt’s scored his first for the club. Substitute Alejandro Garnacho scored a third in the sixth minute of stoppage time.
The win came after back-to-back defeats for United.
Rashford hadn’t scored since March in United’s win over Liverpool in the FA Cup quarterfinals. He curled in a shot from the edge of the area to put Erik ten Hag’s team 2-0 up at Southampton in the 41st minute.
Ten Hag said it could be a turning point for the forward.
“For every striker, they want to be on the scoring list. Once the first is in, more is coming. Like a ketchup bottle, once it’s going, it’s coming more,” he said.
De Ligt, who joined United from Bayern Munich in the offseason, headed in from Bruno Fernandes’ cross in the 35th.
It could have been a different story if Cameron Archer converted a penalty for Southampton in the 33rd. Instead, his effort was saved by goalkeeper Andre Onana.
Newly promoted Southampton was reduced to 10 men when Jack Stephens was sent off in the 79th for a high challenge on Garnacho.
Villa comeback
After three straight defeats to start the league, Everton looked set for its first win when leading Aston Villa 2-0.
Goals from Dwight McNeil and Dominic Calvert-Lewin put Sean Dyche’s team in control until Ollie Watkins struck twice to even the game.
Jhon Duran completed Villa’s comeback and sealed a 3-2 win in the 76th to leave Everton rooted to the bottom of the table and the only top flight team without a point.
Late drama
Jean-Philippe Mateta converted a stoppage time penalty to salvage a 2-2 draw for Crystal Palace against Leicester.
Leicester led 2-0 at Selhurst Park after goals from Jamie Vardy and Stephy Mavididi.
But Mateta sparked Palace’s response with a goal in the 47th, a minute after Mavididi doubled Leicester’s advantage.
Conor Coady fouled Ismaili Sarr in the box right near fulltime and Mateta was cool enough to convert.
West Ham left it even later to salvage a point in a 1-1 draw at Fulham.
Danny Ings struck in the fifth minute of added time after Raul Jimenez’s goal looked like earning Fulham the win.
Brighton boss Fabian Hurzeler, the manager of the month for August, was frustrated as his team was held to 0-0 at home by Ipswich.
CLEVELAND (AP) — Restricted free agent forward Isaac Okoro has agreed to re-sign with the Cleveland Cavaliers on a three-year contract, a person familiar with the negotiations told The Associated Press on Saturday.
Okoro’s new deal is worth $38 million, according to the person who spoke to the AP on condition of anonymity because the contract has not been signed or announced by the team.
ESPN.com first reported the agreement, citing Okoro’s representation.
The fifth overall pick in the 2020 NBA draft, Okoro is Cleveland’s best perimeter defender, often drawing the assignment of guarding the opponent’s top scorer. Okoro also has worked to improve his offensive game.
The 23-year-old averaged 9.4 points and 3.0 rebounds in 69 games — 42 starts — last season for the Cavs, who beat Orlando in the opening round of the playoffs before losing to eventual champion Boston.
Okoro shot a career-best 39% on 3-pointers, forcing teams to come out and guard him.
His agreement caps an extraordinarily busy summer for the Cavs that began with coach J.B. Bickerstaff being fired and replaced by Kenny Atkinson. All-Star guard Donovan Mitchell signed a three-year, $150 million extension in July, ending months of speculation that he wanted out of Cleveland.
Also, power forward Evan Mobley signed a five-year, $224 deal and center Jarrett Allen signed a three-year, $91 million extension.
