LAW & ECONOMICS: CANADA - MERGER REVIEW - QUANTIFICATION - NON-PRICE EFFECTS - EFFICIENCIES

The importance of quantifying non-price effects in Canada

Quantifying non-price effects is a topic with global appeal in antitrust that has garnered particular interest in merger reviews in Canada in light of the recent decisions in Tervita and TREB, especially in cases that involve an efficiencies defence. We discuss the importance of quantifying non-price effects in Canada and some ways to quantify these effects when standard competition models are not helpful.

I. Introduction 1. When we think about anti-competitive effects, whether they arise from a merger or anti-competitive behaviour by firms, we generally think in terms of price competition. In other words, we ask whether the merger or conduct will lead to higher prices for consumers. However, rivalry among firms is not limited to price. In fact, many factors other than price, such as service, variety and quality, are valued by consumers and can alter demand for a product. Further, and perhaps most importantly in today’s economy, firms compete by innovating, whether it be by developing new technologies or reaching consumers in ways that improve a product’s overall value proposition. Forms of competition that manifest in ways other than price are commonly referred to as non-price

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Renée M. Duplantis, Ian Cass, The importance of quantifying non-price effects in Canada, May 2017, Concurrences Review N° 2-2017, Art. N° 83886, pp. 51-57

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