Rogers-Shaw Merger Approved by Competition Tribunal; Consumer Group Blasts Decision
The federal Competition Tribunal on Thursday dismissed the Competition Bureau’s case against Rogers’ proposed $26 billion takeover of Shaw Communications, effectively removing the last major obstacle to its completion.
Rogers’ Shaw acquisition was greenlit by the Canadian Radio-television and Telecommunications Commission (CRTC) in March, and Innovation, Science and Industry (ISED) Minister François-Philippe Champagne all but reaffirmed his approval in October, subject to the closing of the Freedom Mobile sale to Quebecor’s Vidéotron.
Canada’s Competition Bureau, the only regulator holding out, was seeking a full block of the merger over concerns it would increase prices and decrease competition. However, the Bureau’s case was dismissed on Thursday following a weekslong trial.
“I am very disappointed that the Tribunal is dismissing our application to block the merger between Rogers and Shaw,” said Competition Commissioner Matthew Boswell after the ruling.
OpenMedia, one of several public advocacy organizations that delivered over 83,000 messages from the Canadian populace opposing the Rogers-Shaw deal to the federal government, also expressed its disappointment over the Tribunal’s inability to remedy the monopolistic implications of the merger.
“Today was the last nail in the coffin of telecom affordability in a dismal 2022,” said Matt Hatfield, Campaigns Director at OpenMedia.
“Experts, MPs and ordinary Canadians all know it: this buyout means higher prices and fewer choices, in a telecom market that’s already far too concentrated. Canadians pay some of the highest prices in the world for Internet and wireless services, and the fruits of the government’s half hearted attempts to provide competition are rapidly disappearing.”
According to OpenMedia, the Tribunal’s decision will allow Rogers to become the single largest internet provider in Canada. The organization called on Vicky Eatrides, Ian Scott’s replacement for CRTC Chair and CEO who takes office next week, to remedy the lack of competition and fair prices in the telecom market.
Furthermore, OpenMedia argued that Canada’s Competition Act is pro-monopoly and needs reform. “Canada has a big problem: we live under laws that favour the formation of monopolies, and our atrocious Competition Act will keep greenlighting new ones until we fix it,” continued Hatfield.
“The Competition Bureau deserves credit for trying to stop the Rogers-Shaw deal, but monopoly friendly clauses in the Act stacked the deck against them from the start. Preventing future deals as large and destructive as Rogers-Shaw will require deep changes to the Act.”
Rogers and Shaw are now in the final stretch of their transaction. “We are pleased with the favourable decision from the Competition Tribunal and thank the Tribunal members for their work in rendering a swift decision,” the two telecom giants said in a joint statement.
“This is an important milestone in the regulatory process and moves us one step closer to closing a series of transformative transactions proposed by Rogers, Shaw, and Quebecor. We look forward to reviewing the details of the decision and working with the Minister of Innovation, Science and Industry so we can clear the final regulatory hurdle to close these transactions.”
Rogers and Shaw have extended their mutual deadline for the merger, as well as the Freedom-Vidéotron sale, to January 31, 2023.