U.S. tech trade group warns Canada’s draft merger guidelines risk deterring innovation, startup acquisitions

A trade association representing many of the world’s largest technology firms is warning Canada’s proposed merger enforcement guidelines could stifle economic growth and deter pro-competitive deals in the digital sector. The Computer and Communications Industry Association (CCIA), a Washington-based group whose members include major tech and communications companies such as Apple Inc., Amazon.com Inc., Meta Platforms Inc., Google, Cloudflare Inc., and Shopify Inc., submitted a detailed critique of the Competition Bureau’s updated guidance. The association argued the new guidelines place a “disproportionate weight” on “speculative theories of harm,” particularly when it comes to digital markets. The group’s comments came as part of a consultation on the bureau’s proposed guidelines, meant to reflect amendments made to the Competition Act in recent years. The guidelines are not legally binding, but instead lay out to businesses how the agency analyzes mergers and decides whether to intervene. Once finalized, they will replace earlier guidance that has not been updated since 2011. In its submission, the CCIA took issue with the guidelines’ reduced emphasis on the benefits that mergers can bring, and its broader scope of what the bureau considers coordination or collusion in the market. “These changes raise concerns for mergers in digital markets characterized by rapid innovation, low entry barriers, multi-sided business models, and dynamic competition,” the CCIA wrote. “Absent additional clarifications and safeguards, this may deter procompetitive transactions, reduce incentives to innovate, and undermine legal certainty for merging parties.” Not everyone shares the group’s concerns, however. The Canadian Anti-Monopoly Project (CAMP), an Ottawa-based advocacy group that also filed comments in the consultation, took a considerably more favourable view of the proposed guidelines. CAMP executive director Keldon Bester said the draft reflects a long-overdue recognition that the bureau was too permissive of harmful mergers in the past, including towards transactions that entrenched the dominance of major technology platforms. In an interview with The Wire Report, Bester pointed to Meta's acquisitions of Instagram and WhatsApp, which he said authorities around the world failed to adequately scrutinize at the time, with the U.S. Federal Trade Commission ultimately losing its case challenging those deals. The result, he said, was a pattern of consolidation that produced dominant players across search, online advertising and e-commerce. “The real meat is in the message,” which Bester said translates to the Competition Bureau saying, “we were too lax in the past, we gave too many things a pass without due analysis.” “Optimistically, that era is over,” he said. That does not mean the bureau has to dissect every merger, acknowledged Bester, noting that the agency has historically intervened in “an extremely small percentage of total merger activity.” “But what we're moving away from is just that sort of default , ‘Well, this is probably fine,” he said. Changes to market concentration thresholds Among the CCIA's main concerns is the treatment of market concentration thresholds when determining if a merger is anti-competitive, also known as “structural presumptions,” a provision of the guidelines also found in the Competition Act itself. According to the act, that threshold is triggered when a merger would lead to a significant increase in concentration in an already highly concentrated market, or would result in a combined market share of 30 per cent or more. The CCIA acknowledged that a significant increase in concentration in an already highly concentrated market is more likely to harm competition, but said it is concerned about the 30 per cent market share rule. The group argued that concentration metrics are poor proxies for competitive effects in dynamic markets characterized by rapid technological change. “In digital markets, even firms holding over 30 percent market share can face significant constraints from the threats of innovation or entry from adjacent markets,” wrote the CCIA. The group recommends that the guidelines clearly articulate the types of evidence the bureau may consider to counter the structural presumption, such as whether new competitors could easily enter the market, whether existing rivals could expand, whether the merger would spur innovation, whether customers have enough bargaining power to discipline the merged firm, and whether the deal would generate cost savings or other efficiencies that benefit consumers. Bester pushed back on the notion that dynamism in digital markets functions as a natural check on anti-competitiveness, saying that the dominance of today's largest tech platforms is itself evidence that “fast-moving markets” are not immune to the kind of entrenched concentration that merger review is meant to prevent. “We had markets that had some very particular characteristics and were also very high activity, high innovation,” he said of the digital space. “We thought that the best idea was to step back and let them work themselves out, and unfortunately, that led to some familiar consequences from more traditional markets.” New section on digital platforms, network effects Keeping in the spirit of modernization, the bureau has proposed adding a new section to the guidelines dedicated to digital platforms and “multi-sided markets,” services that connect two or more distinct groups of users, such as a marketplace connecting buyers and sellers, or a social media platform connecting users and advertisers. Central to how the bureau will examine these markets is the impact of network effects, the phenomenon where a platform becomes more valuable to each user as more people use it. A messaging app, for instance, is only as useful as the number of people already on it, and an e-commerce marketplace attracts more buyers because it has more sellers, and vice versa. The guidelines treat these network effects as a potential source of durable market power, due to their ability to entrench a dominant platform's position by making it increasingly difficult for rivals to attract users away. The CCIA said that framing overstates how sticky platform dominance actually is, arguing that network effects in technology markets are “often diluted” by low switching costs and multi-homing — the practice of users participating on multiple platforms simultaneously. “Even platforms that achieve significant scale can lose relevance rapidly when new features, technologies, or business models emerge.” The lobby group challenged the bureau’s new language and called on it to “adopt a more nuanced approach” that accounts for how readily users can move between platforms, and how quickly innovation can reshape market dynamics, rather than presuming that growth “inevitably” leads to entrenchment. Bester said the new digital platforms section reflects what he called a “rear-view mirror hangover,” stemming from the rise of the world’s major tech platforms and “a lot of situations that wrote off as not worrisome.” He viewed the new addition as the Competition Bureau saying, “we’ve learned our lesson. The business community should be on notice that these things are going to attract more scrutiny than they might have in the past.” Removing the efficiencies defence The CCIA also took aim at how the guidelines address pro-competitive benefits, arguing they are now being treated as secondary in the bureau’s decision-making, rather than a “central analytical component.” “Some mergers may result in a more effective use of productive resources, or ‘efficiency,’ where they lead to certain types of cost savings, or benefit consumers by combining complementary assets or products,” read the proposed guidelines. “Efficiencies do not constitute a defense to an anti-competitive merger under the act.” “Generally, when a merger otherwise presents significant competition concerns, even gains that are supported by rigorous evidence are unlikely to change our conclusions regarding harm to competition.” While the CCIA acknowledged that the efficiencies defence was recently removed from the Competition Act, it argued that the law still permits the bureau to consider “any factor relevant to competition,” which it says includes pro-competitive justifications. This is particularly relevant in innovation-driven markets, the group maintained, where efficiencies can manifest through improved quality, faster product development, and enhanced security, rather than short-term price reductions. The group called for the guidelines to “explicitly emphasize that procompetitive benefits are a crucial and necessary component of any comprehensive merger analysis." CAMP took the opposite view. Its submission called for the removal of any remaining efficiencies exemption language from the guidelines and clarification that efficiencies play only a subordinate role in merger enforcement. Bester argued the removal of the statutory efficiencies defence was a necessary correction that refocuses competition law on what it should actually be solving for. “Efficiencies are not totally dead, which is too bad, but they have been correctly relegated to secondary status,” Bester said. “We are solving for competition and the many benefits that it generates…, trying to balance and trade off a little bit over here and a little bit over here was always a problem." The public consultation closed Feb. 11. The bureau has not yet indicated when it will publish its final guidelines. phalentm@thewirereport.ca

U.S. tech trade group warns Canada’s draft merger guidelines risk deterring innovation, startup acquisitions

Regulatory |
By Phalen Tynes-MacDonald
|February 19, 2026

Unlock all the Canadian telecom, broadcasting and digital media news you need.

FREE TRIAL

SUBSCRIBE

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us

U.S. tech trade group warns Canada’s draft merger guidelines risk deterring innovation, startup acquisitions

Regulatory | By Phalen Tynes-MacDonald |February 19, 2026

Unlock all the Canadian telecom, broadcasting and digital media news you need.

FREE TRIAL

SUBSCRIBE

CRTC raises revenue threshold for telecom contribution fund, despite Big Three opposition

CRTC looking to bring Indigenous radio stations to Toronto, Ottawa

‘He comes from our side’: Writers’ Union CEO calls Solomon an AI ‘cheerleader,’ asks him to slow down strategy

Related Stories

Rogers v. Rogers a tour de force for Toronto actor Tom Rooney

Rogers appeals Competition Tribunal’s exclusion of details about commissioner’s alleged inaction in data plan dispute

OPINION | Boswell woke up Canada’s competition watchdog. With his departure imminent, it must get to work.

Competition Commissioner Matthew Boswell announces Jeanne Pratt as interim replacement as he prepares to step down

Reuse & Permissions

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us

Regulatory |
By Phalen Tynes-MacDonald
|February 19, 2026