Brattle Principal Renée Duplantis and Consultant Ian Cass have published an article in the recent issue of Concurrences Law & Economics that discusses the current legal framework for competition and merger reviews in Canada and the growing interest in incorporating non-price effects into competition assessments.
Non-price effects is a topic with increasing international appeal and importance in antitrust matters, with a particular significance in merger reviews in Canada. Non-price effects consist of factors other than price (such as service, variety, and quality) that can alter demand for a product and thus cause rivalry among firms. Innovation is another key example of ways in which firms compete in today’s economy.
According to the authors, there has been a recent spike in interest to develop methods to incorporate non-price effects into competition assessment frameworks since price alone may not capture all possible outcomes resulting from competition. To illustrate, the authors discuss two recent merger cases in Canada, Tervita Corp v. Canada (Tervita) and The Commissioner of Competition v. The Toronto Real Estate Board (TREB).
In Tervita, the Supreme Court of Canada reinforced the importance of “quantifying all measurable anti-competitive effects, including non-price effects, in merger matters where an efficiencies defense is raised.” The Tribunal’s decision in TREB highlights the importance of maintaining non-price competition, focusing on “dynamic competition, including innovation.”
In their article, “The importance of quantifying non-price effects in Canada,” Dr. Duplantis and Mr. Cass outline tools for quantifying non-price effects and offer suggestions for how existing tools can (and should be) improved in the future. The full article can be downloaded below.