Progressive says the allegations are without merit and it plans to defend itself in the courts.
The bureau says its Consent Agreement addressed concerns that the merger would reduce competition among commercial waste collection services in several markets — Calgary, Edmonton, Hamilton, Ottawa and Simcoe County in Ontario.
The bureau now alleges that Progressive violated the deal by soliciting and re-acquiring a customer whose contract was divested under the agreement.
It also alleges Progressive failed to notify the bureau that the agreement had been breached and provided a false declaration that it was in compliance.
The bureau alleges there were multiple breaches between October 2010 and February 2011.
"Today's announcement sends a strong signal to businesses that breaching a Consent Agreement with the Competition Bureau is an extremely serious matter and will not be tolerated," Melanie Aitken, Commissioner of Competition, said in a statement.
"Consent Agreements are an essential tool to preserve competition and protect consumers from potential anti-competitive harm. Companies who violate the terms of such agreements must be held to account."
The bureau said the agreement with IESI-BFC Ltd. and Waste Services Inc. (now known together as Progressive), required the companies to divest commercial waste collection assets, including customer contracts, vehicles, bins and other equipment in the identified markets.
In addition, they were prohibited from soliciting or reacquiring divested customers for a period of one year. In the event that the parties became aware of material breaches agreement, they were required to promptly notify the bureau.
Chaya Cooperberg, a vice-president at Progressive, said in an email statement that the company is surprised that the bureau is taking the matter to court.
"We have at all times acted in good faith and used our best efforts to fully comply with our obligations under the Consent Agreement entered into with the Competition Bureau in 2010. We have substantially complied with the agreement," Cooperberg said.
"Further, we have fully co-operated with the Bureau in its enquiry in this matter.
"We strongly believe that the Bureau's allegations are without merit. We will vigorously defend this matter in the courts."