Supreme Court Of Canada Allows Challenged Merger To Proceed On Efficiency Grounds

On January 22, 2015, the Supreme Court of Canada (SCC) reversed a decision of the Federal Court of Appeal (FCA) that had dismissed an appeal from an order of the Competition Tribunal (Tribunal) requiring Tervita Corporation¹ to divest the Babkirk hazardous waste landfill site following its acquisition of Complete Environmental Inc. in January 2011.

The SCC agreed with the Tribunal and the FCA that the merger was likely to prevent competition substantially because, in the absence of the merger, the Babkirk site would likely have emerged as Tervita's only competitor in the relevant market within 27 months. However, a majority of the SCC found that the efficiencies defence to otherwise anti-competitive mergers applied on the evidence available to the Tribunal. Since the Commissioner of Competition had failed in her burden of quantifying the anti-competitive effects of the merger, the SCC determined that proven efficiency gains resulting from the merger (even