Rogers–Shaw merger dodges antitrust bullet as deadline looms

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A Canadian court this week rejected efforts by the competition bureau to block to deal, describing the appeal as being ‘without merit’

Back in 2021, two of Canada’s largest telecoms companies, Shaw Communications and Rogers Communications, announced their intention to merger in a deal worth roughly $15 billion.

Since then, the controversial deal has been plagued by regulatory bottlenecks, with critics complaining that the deal will reduce competition and drive up costs for customers. Competition Commissioner, Matthew Boswell, launched an appeal to block the deal in May last year, saying that it threatened to further shrink Canada’s already concentrated mobile market.

This month, however, has seen the Competition Commission rebuffed twice.

At the start of the month, the Competition Tribunal dismissed the appeal to block the deal, saying that they did not believe the merger would represent the loss of competition the Commissioner claimed. In particular, the Tribunal noted that there would still be four major mobile players in the mobile market, with Quebecois telecoms group Vidéotron having agreed to purchase Shaw’s mobile unit, Freedom Mobile, and scale up their operations to a national level.

The Competition Commission immediately said it would appeal this decision at the Federal Court of Appeal in Ottawa, alleging that the Tribunal had made legal errors in appraising the deal.

Now, this week, this new appeal has been rejected by the court, which said that the appeal was ‘without merit’.

“[The Competition Tribunal] found, I would say, on the evidence rather decisively that there was no substantial lessening of competition,” explained Justice David Stratas. “They also found a number of pro-competitive considerations.”

The Commissioner Boswell has said he will further appeal the ruling, potentially taking the case to the Supreme Court of Canada.

This dismissal now means the merger is agonisingly close to competition, with the companies scurrying to dot the I’s and cross the t’s before the deadline of January 31.

Only one hurdle now remains: approval from Industry Minister Francois-Philippe Champagne, whose permission is required to transfer spectrum from Shaw to Vidéotron.

In a tweet, Champagne noted the court’s decision, saying that he would deliver his own verdict on the merger ‘in due course’.

My statement regarding the Federal Court of Appeal’s ruling on the Rogers-Shaw transaction: pic.twitter.com/ujvwznTVrl

— François-Philippe Champagne (FPC) 🇨🇦 (@FP_Champagne) January 24, 2023