As Court Date Set, Competition Bureau Expands Legal Complaint About Rogers Shaw Decision

A court date has been set and the complaint has been expanded by the Competition Bureau. The court challenge has temporarily blocked the Rogers Shaw merger.

In March of 2021, Rogers announced its intention to buy Shaw for $26 billion. The deal would greatly reduce competition in the telecom sector by turning a mere 4 players to a microscopic 3 players in the sector. The quest to become an even bigger telecom monopoly seemed to be a sure thing when anti-consumer governmental organization, the CRTC, rubberstamped the deal almost at the first possible opportunity. While the deal was hugely controversial thanks to world record high prices in this country, a massive outage that ground the Canadian economy to a halt pushed the deal further into the public spotlight.

While the federal government has been back and forth on the issue, seemingly torn between massive public pressure and serving their political donors, it seems that the Competition Bureau would be the one to finally act in the public interest. They recommended blocking the deal. This followed a flood of complaints from the Canadian public to put a stop to this deal at the next hurdle to this monopoly: a decision by the Competition Tribunal.

Unfortunately, the “Competition” Tribunal seemed to only work for the big telecom companies. In a time frame seemingly meant to meet Rogers deadline of making a decision, they seemingly just glossed over the thousands of pages of public input and expert testimony and rejected the complaint lodged by the Competition Bureau. The decision threw all logic and common sense out the window, saying that decreasing the competition in the sector by 25% won’t reduce competition and that consumer prices totally won’t be affected by the deal even though it will logically reduce competition. In the process, however, they seemingly disclosed more than they intended in their haste to rush to judgment. In the process, as a way of telling the world that the organization is run by the incompetent, they even threatened to disclose IP addresses of anyone who happened to access those documents before those documents could be taken down, raising the prospect of violating Canadian privacy laws in the process – however weak they are.

As we already noted, the Competition Bureau expressed disappointment and quickly appealed the decision. It seems that the Federal Court of Appeal seems receptive to hearing the case. So, the decision to approve of the deal at this point has been delayed. Further, a court date has been set for January 24.

On January 24, 2023, our appeal of the Competition Tribunal’s #Rogers-#Shaw decision will be heard by @FedCourtApp_en.

The temporary stay of the Tribunal decision will remain in place until a ruling is made on the appeal. #CTRS #CompetitionMatters

In a follow-up report, the complaint apparently has been expanded. From the Globe and Mail (probably regwalled):

In its updated appeal, filed with the court late Friday, the bureau claimed the tribunal did not adequately explain why its decision would be the same and therefore made a legal error.

It also claimed the tribunal improperly applied the legal test for mergers, as it did not consider the magnitude of service price increases and failed to consider the duration and scope of the effects of the merger.

In its initial appeal filed Dec. 31, two days after the tribunal released its summary decision, the bureau argued that the tribunal made two legal errors: it acted outside its jurisdiction by considering the divestiture of Freedom Mobile, alongside the original deal, and it did so without the bureau’s consent.

The bureau declined to comment on its amended appeal.

In a note to investors, Scotiabank analyst Maher Yaghi said the additional arguments are unlikely to sway the judge, as the tribunal would not have made assertions about its decision without being able to justify them.

“Overturning this decision is not easy, and hence we continue to believe that closing of the transaction is the most likely outcome,” Mr. Yaghi said.

So, at the very least, a very real push by the Competition Bureau to try and fight for the interests of consumers. This while big bankers are trying to say that the appeal will fail somewhere along the line. So, really compounding this image of this being a fight between consumers and the investor class. While many other regulators are seemingly turning a blind eye to this further erosion of competition in the marketplace, at lease someone is making an effort to fight against it. It’ll only be weeks before we find out who wins in this first round.

Drew Wilson on Twitter: @icecube85 and Facebook.

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