Rogers-Shaw merger: Competition Bureau gives up the fight, House of Commons begins its scrutiny

The Competition Bureau has said it will not be appealing the Federal Court’s decision after its motion to block the Rogers-Shaw merger was rejected yesterday.

“We are truly disappointed that the Federal Court of Appeal has dismissed our appeal of the Competition Tribunal’s decision in Rogers-Shaw,” said Matthew Boswell, commissioner of competition. “Although today’s developments are discouraging, we stand by the findings of our investigation and the decision to challenge the merger.”

The verdict was clear-cut and overwhelmingly backed the Competition Tribunal’s decision, which the bureau argued to be legally flawed.

Rogers, Shaw and Quebecor conveyed their satisfaction with the verdict in a joint statement. “We welcome this clear, unequivocal, and unanimous decision by the Federal Court of Appeal. We continue to work with Innovation, Science and Economic Development Canada to secure the final approval needed to close the pro-competitive transactions and create a stronger fourth wireless carrier in Canada and a more formidable wireline competitor.”

The Federal Court’s decision and the bureau backing down means that the C$26 billion merger deal can now proceed to Minister François-Phillipe Champagne for his final approval.

However, independent internet service provider (ISP), TekSavvy is still hoping that the merger will go to the CRTC for more scrutiny before the Minister gives his verdict. The ISP said in a tweet yesterday that the court’s decision does not change the fact that “the Rogers-Shaw merger is based on an unlawful side deal with Videotron that will kill competition and raise consumer prices.” TekSavvy’s appeal to the CRTC to block the merger, announced last week, was introduced by the Bureau as additional evidence, which the Federal court rejected.

Today, the Standing Committee on Industry and Technology, who previously issued a study suggesting that the merger should not proceed, is holding hearings to investigate competition concerns with the deal.

It is, however, unlikely that today’s hearings will affect Champagne’s decision, Michael Geist, Canada Research Chair in Internet and E-Commerce Law at the University of Ottawa said in a blog post.

“He’s [Champagne] likely to tout the conditions on the deal, promise Competition Act reform, and announce his approval late on a Thursday before a holiday week so there are no questions to answer in the House of Commons. But if this is the path he chooses, Canadians must recognize that it is a choice.”

There is ample evidence that the merger should not proceed, Geist said, including the bureau’s and TekSavvy’s applications, as well as “the undeniable frustration of Canadians over communications competition and pricing.”

“Minister Champagne and the government can choose to stand up for Canadian consumers and say this deal doesn’t go ahead on their watch. Or they can stand with big telecom companies and choose to make matters even worse. It’s Champagne’s choice,” Geist stated.