Competition Bureau Confirms That It Wants To Stop The Rogers Shaw Merger

Yesterday I reported that Rogers and Shaw received communication from the Competition Bureau saying that they were going oppose the merger of the two telcos. Now the Competition Bureau has confirmed that this communication happened. And they provided among other details, this:

The Competition Bureau is seeking to block Rogers proposed $26 billion acquisition of Shaw in an effort to protect Canadians from higher prices, poorer service quality and fewer choices, particularly in wireless services.

The Bureau challenged the merger today by requesting an order from the Competition Tribunal to prevent it from proceeding. The Bureau is also requesting an injunction to stop the parties from closing the deal until its application can be heard. The Bureau must now prove its case before the Tribunal in order for the deal to be stopped. 

The Bureau alleges that removing Shaw as a competitor threatens to undo the significant progress it has made introducing more competition into an already concentrated wireless services market, where Rogers, Bell and Telus (the Big 3) serve approximately 87% of Canadian subscribers. 

Following an extensive investigation, the Bureau determined that competition between Rogers and Shaw has already declined. The Bureau’s position is that if the proposed merger is allowed to proceed, that harm will continue and may worsen. The applications filed seek to safeguard an effective, growing and disruptive regional competitor for the benefit of consumers.

Well, this is a very interesting development. The Competition Bureau sees this merger the way that Canadians see this merger. Which is that it is harmful to Canadians because it shrinks competition. I for one will be cheering for the Competition Bureau in this fight as Canada needs to do better when it comes to its telco services.

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