Industry committee hears of issues with competition review at Rogers-Shaw examination

By The Canadian Press on January 25, 2023.

OTTAWA – The way the Rogers-Shaw approval process has played out shows a need to rethink competition laws, the House of Commons industry and technology committee heard Wednesday from experts.

The committee, taking a second look at Rogers Communications Inc.’s proposed takeover of Shaw Communications Inc. after recommending against it in March, heard from both government officials as well as outside experts in competition and monopoly powers.

The deal, with the addition of a provision to sell Shaw’s Freedom Mobile to Quebecor Inc.’s Videotron Ltd., has all approvals in place but Industry Minister François-Philippe Champagne’s sign-off on the wireless spectrum transfer. The minister said late Tuesday he would make a decision in due course.

With the regulatory side largely settled, after the Competition Bureau said it accepted the Federal Court of Appeal’s decision Tuesday to reject its appeal, outside experts took a forward look at the systems in place and potential failings of the current setup.

Jennifer Quaid, associate professor at University of Ottawa’s Faculty of Law, said it was concerning how Rogers was able to introduce the sale of Freedom Mobile while the review process was well underway.

“We are now creating an incentive to wait to propose remedies to when things are further along,” Quaid said.

The late introduction of the proposed sale was a key aspect of the Competition Bureau’s attempts to overturn the Competition Tribunal’s approval of the deal in late December. It argued that it should have been considered a remedy, which would put the burden on the companies to address competition concerns, instead of an integral part of the whole deal, as the Competition Tribunal treated it.

Quaid also raised concerns about the composition of the Competition Tribunal, wondering if it’s missing areas of expertise.

“I think it’s time to reconsider whether we have the right decision making body.”

Keldon Bester, co-founder of the Canadian Anti-Monopoly Project, said the competition review process needs to be improved through the current public consultations to help improve the system.

“If we do not use the ongoing review of the Competition Act to reform Canada’s weak merger laws, we should expect to find ourselves in the same if not more extreme situation in the near future, as corporations continue to use mergers and acquisitions as a way to reduce competition and entrench their dominance.”

Bester said Champagne could still add more conditions to his approval of the deal, including more aggressive pricing benchmarks, a timeline to reach those and consequences for not meeting them.

MPs on the committee also raised concerns about how commitments in the deal between Rogers and Videotron would be difficult to enforce, as well as concerns about how Rogers was able to choose Videotron as the competitor to which it would sell the Freedom Mobile assets.

The committee meeting continues Wednesday afternoon including with appearances by company representatives including Rogers chief executive Tony Staffieri and Quebecor Media chief executive Pierre Karl Péladeau.

This report by The Canadian Press was first published Jan. 25, 2023.

Companies in this story: (TSX:RCI.B, TSK:SJR.B, TSX:QBR.B)

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