The Competition Bureau has filed applications to prevent the merger of Rogers and Shaw.
In a press release, the Bureau says removing Shaw as a wireless subscriber (through Freedom Mobile) threatens to undo the progress of introducing competition in a concentrated wireless market, given the Big 3 serve 80 percent of subscribers in Canada.
Their investigation found the competition between Rogers and Shaw has been in decline, and this will continue if the merger is approved.
They state the merger will prevent or lessen competition by eliminating an established and independent competitor, preventing competition for wireless service within and outside Shaw’s service area, and averting competition for wireless services for customers in Ontario, Alberta, and B.C.
The Bureau says Shaw is Rogers’ “closest competitor” and has challenged the company, along with Bell and Telus, by offering quality services with better pricing and data allowances.
“The Competition Bureau conducted a rigorous investigation of the proposed Rogers-Shaw merger and concluded that it would substantially prevent or lessen competition in wireless services,” Matthew Boswell, Commissioner of Competition, said.
“We are taking action to block this merger to preserve competition and choice for an essential service that Canadians expect to be affordable and high quality.”
The Bureau also asks the Competition Tribunal to approve an injunction on the $26 billion deal, blocking the merger from closing before their application is heard. The deadline for the merger is slated for July 31st.
The Bureau shared its opposition plans with Rogers Friday. In a joint statement with Shaw, Rogers stated the transaction is in the best interest of Canadians.
The companies said they are addressing concerns about competition in the wireless market by selling off Freedom Mobile. Rogers has provided little detail on the matter and won’t confirm The Globe and Mail reporting that presents Québecor and Xplornet as potential acquirers.
The Competition Bureau is one of three federal bodies that must approve the merger. The Canadian Radio-television and Telecommunications Commission has approved the merger with conditions, but approval is still needed from Innovation, Science and Economic Development Canada.
Source: Competition Bureau Canada