While international competition regimes rarely operate in precisely the same way, many share a common feature: the decisions of the country’s competition law authority are subject to third-party review. Usually, Canadian and United States enforcers must prove their case in front of an independent judiciary. In Europe, enforcement decisions may be subject to judicial review or appeal. Whatever the precise structure, the third-party review process has important implications for enforcers and merging parties alike. Perhaps the most fundamental is whether third-party reviewers approach the law and evidence the same way as enforcers. Often, they do not. Two recent Canadian and American merger cases are striking examples of this phenomenon. In these cases, judges dismissed the enforcer’s case because they fundamentally disagreed with the enforcer’s approach to the law and the evidence provided.
In Canada, the CAD$26bn Rogers–Shaw merger – one of the largest domestic corporate transactions in the nation’s history – closed in April 2023 after over two years of unsuccessful government regulatory challenges and litigation. The global Microsoft–Activision acquisition – labelled the largest acquisition in the technology industry’s history – faced significant regulatory opposition from regulators in the US and the United Kingdom before finally closing on 13 October 2023. An attempt by the US Federal Trade Commission to block the Microsoft–Activision transaction failed in July 2023.
Although one case involves a vertical merger in the technology industry and the other involved a horizontal merger in the telecommunications industry, the enforcers approached both cases in a similar fashion, and both lost their cases for the same reason: their approach to the law and the evidence was fundamentally different than that adopted by the courts. Despite the differences between the cases, Canada’s Competition Tribunal in Rogers–Shaw and Judge Corley in Microsoft–Activision adopted a strikingly similar approach to the law and evidence: one grounded in the principles of fairness, efficiency and common sense. Their decisions hold valuable evidentiary and legal lessons for enforcers and practitioners alike.
This article summarises both cases, outlines the key similarities in the eventual decisions and concludes with a list of critical takeaways for enforcers and practitioners to refer to in circumstances where they must convince third-party decision-makers of the correctness of their position.
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