Divestiture is the most common form of relief used by antitrust authorities to address anti-competitive mergers. In this article, the authors discuss whether competition authorities, in using this tool, have achieved effective relief to anti-competitive mergers.
Effective relief is defined to be the prevention of anti-competitive effects.
Three criteria are identified as being essential to ensuring effective relief. First, the assets chosen for divestiture must comprise a viable entity. Second, the independence and competitive significance of the purchaser must be assured. Third, the time taken to complete the divestiture should not be prolonged. These criteria are used to assess Canadian and American antitrust authorities' experience with divestitures.