TORONTO (Reuters) - Plans by Canada’s competition authorities to publish a monthly report on mergers violate basic confidentiality rules and will do little to make the review process more transparent, senior Canadian lawyers say.
The Competition Bureau said this week it would start publishing a register of concluded reviews in March, listing the parties and industries involved in each transaction, as well as the outcome of its reviews.
The register is the brainchild of Competition Bureau Commissioner Melanie Aitken, a tenacious former litigator who has set up an internal working group to make the bureau more transparent.
The Ottawa-based Competition Bureau reviews all mergers and acquisitions valued at more than $77 million and has reviewed more than 400 deals since April 2009.
Right now it’s in the spotlight for a review of the $3.8 billion proposal by Canada’s leading banks and pension funds to acquire the country’s top exchange operator, TMX Group Inc, a deal that critics say will give the new entity a near-monopoly position.
But the competition section of the Canadian Bar Association (CBA), which represents some 37,000 members of the legal profession, says the register violates the spirit of Canada’s competition law.
“We have a Competition Act that has confidentiality provisions that obliges inquiries to be conducted in private and we think those provisions should be respected,” Donald Houston, chair of the national competition section of the CBA, told Reuters. Houston aired confidentiality concerns in a letter to the bureau last fall.
Houston and other lawyers say the register will do little to make the review process more transparent. But it will reveal details about deals, often involving private companies, that might otherwise remain non-public.
“While transparency in decision-making is welcome, the merger registry does not appear to give insight into the analytic framework or decision-making process of the bureau,” said Julie Soloway, a partner in the competition, antitrust and Foreign Investment Group at Blake, Cassels & Graydon LLP.
Critics say the Competition Bureau is exploiting a loophole, given that the law guarantees confidentiality, except to a Canadian law enforcement agency or for purposes of administration and enforcement of the competition act.
“The fact is we start with confidentiality protection ... and the bureau is, let’s say, generously treating that exception,” said Tony Baldanza, a partner with Fasken Martineau in Toronto and head of the firm’s antitrust/competition & marketing law group.
Baldanza said he worried that publishing a register could compromise companies who might, for example, have to sell assets to mitigate Competition Bureau concerns.
“Disclosure of that outcome could prejudice the bidder or the target,” he said. “So I would hope that the bureau will listen to requests from parties where a departure from the register is appropriate.”
The Competition Bureau said it has a “proven track record of protecting confidential information.” It says its monthly reports will provide only basic tombstone information and will not violate confidentiality.
Lawson Hunter, a lawyer at Stikeman Elliott and former head of the Competition Bureau, said the register will provide insight into the agency’s thinking by giving the public a glimpse into which deals the bureau challenges.
“It’s not blow-by-blow how they came to the conclusion, but I do think it’d give you useful information,” he said. “I do think it’s helpful and I do think the resistance to it is overreaching.”
Reporting By Pav Jordan; editing by Janet Guttsman