Competition Bureau seeks to block $26B Rogers-Shaw merger over pricing, service fears

The Competition Bureau says it is seeking to block Rogers Communications Inc.'s proposed $26-billion acquisition of Shaw Communications Inc.

The Competition Bureau has filed an application to block Rogers Communications Inc.’s purchase of Shaw Communications Inc. because it claims the transaction would lead to worse service and higher prices, though experts say the move isn’t necessarily the end of the road.

The federal regulator is asking the Competition Tribunal to prevent the $26-billion deal from proceeding and seeks an injunction to stop the two companies from closing the deal until the bureau’s application can be heard.

The merger will lead to “higher prices, poorer service quality and fewer choices,” the bureau said, particularly in the wireless sector, where Rogers, Bell and Telus Corp. currently serve about 87 per cent of Canadian subscribers.

The bureau’s investigation into deal, which the companies reached in March 2021, determined the proposed acquisition will eliminate “an established, independent and low-priced” competitor in Shaw-owned Freedom Mobile. It would also prevent existing competition in wireless services in Ontario, Alberta and British Columbia and suppress further competition in areas like 5G.

“Eliminating Shaw would remove a strong, independent competitor in Canada’s wireless market — one that has driven down prices, made data more accessible, and offered innovative services to its customers,” said Matthew Boswell, the commissioner of competition, in a statement.

He and the bureau argue that Shaw has “consistently challenged” the Big Three telecommunications companies.

Shaw now provides wireless services to over two million customers in Ontario, Alberta and B.C., its wireless subscriber base has recently doubled and data prices have decreased, where they had previously increased year-over-year, the bureau said.

However, its opposition might not kill the transaction.