The Competition Bureau has filed an application to block Rogers Communications Inc.’s purchase of Shaw Communications Inc. because it claims the transaction would lead to worse service and higher prices, though experts say the move isn’t necessarily the end of the road.
The federal regulator is asking the Competition Tribunal to prevent the $26-billion deal from proceeding and seeks an injunction to stop the two companies from closing the deal until the bureau’s application can be heard.
The merger will lead to “higher prices, poorer service quality and fewer choices,” the bureau said, particularly in the wireless sector, where Rogers, Bell and Telus Corp. currently serve about 87 per cent of Canadian subscribers.
The bureau’s investigation into the March 2021 deal determined the proposed acquisition will eliminate “an established, independent and low-priced” competitor in Shaw-owned Freedom Mobile. It would also prevent existing competition in wireless services in Ontario, Alberta and British Columbia and suppress further competition in areas like 5G.
“Eliminating Shaw would remove a strong, independent competitor in Canada’s wireless market — one that has driven down prices, made data more accessible, and offered innovative services to its customers,” said Matthew Boswell, the commissioner of competition, in a statement.
He and the bureau argue that Shaw has “consistently challenged” the Big Three telecommunications companies.
WATCH | Rogers-Shaw deal raises concerns over competition, pricing:
Rogers Communications has signed a deal to buy Shaw Communications for $26 billion pending approval from the Competition Bureau of Canada, the CRTC and the Canadian government. The deal has raised fears that reduced competition will push Canadians’ cellphone bills even higher. 1:49
Shaw now provides wireless services to over two million customers in Ontario, Alberta and B.C., its wireless subscriber base has recently doubled and data prices have decreased, where they had previously increased year-over-year, the bureau said.
However, its opposition might not kill the transaction.
Rogers and Shaw, which revealed the bureau’s intentions over the weekend, have already announced they plan to press ahead with the deal and fight the commissioner’s efforts to block it.
Not the end of the road Rogers, Shaw
Neither company not immediately respond to a request for comment, but have sought to fend off some of the bureau’s criticisms by attempting to sell Freedom, which makes up the bulk of Shaw’s wireless services. New Brunswick-based rural internet provider Xplornet Communications Inc. and Montreal’s Quebecor Inc. are reportedly interested in Freedom.
The Innovation, Science and Economic Development Canada, which has yet to approve the deal, could also block the transaction from moving forward, though the Canadian Radio-television and Telecommunications Commission signed…
Read More: Competition Bureau files court applications to block Rogers-Shaw merger
