Québecor says Loblaw deal with telecom is anti-competitive, calls on Ottawa to step in

The head of telecom and media firm Québecor is calling on the federal government to intervene in a deal between Loblaw and a company owned by Rogers and Bell that would see his company and others pushed out of 180 Loblaw-owned stores.

In a letter Pierre Karl Péladeau sent to Industry Minister François-Philippe Champagne on May 9, the Québecor CEO says Loblaw decided to "prematurely end" Québecor's contract for wireless devices and services at the telecommunications kiosks inside Loblaw grocery stores — a move he calls anti-competitive and contrary to the interests of consumers.

The Loblaw-owned supermarket kiosks are branded as The Mobile Shop and there are 180 of them across the country. Right now, the kiosks sell cell phone plans from seven providers, including Telus and Québecor's Freedom Mobile. 

On the brand's "about us" page, The Mobile Shop says "we don't work for any one carrier, so we'll never play favourites."

In his letter, obtained by CBC News, Péladeau says The Mobile Shop will soon sell only Glentel products. Glentel is a retailer owned by Bell and Rogers.

"(Loblaw) presents this decision as a simple choice of supply for its stores, but in our view, this is an approach aimed at excluding certain other cellular telephone operators to benefit the company Glentel," Péladeau says in the letter, translated from French.

"If Glentel obtains such favour from Loblaw, it is because it's a joint venture made up of the giants Bell and Rogers who once again seek to lock out competition and take Canadians hostage in their consumer choice."

In his letter, Péladeau asks Champagne for "direct and firm" intervention against Loblaw, Rogers, Bell and Glentel.

In a statement, The Mobile Shop says its business represents "less than five per cent of sales in mobile phones and plans in Canada.

"Based on our limited market presence in mobile, our decision of which carrier to sell does absolutely nothing to competition," says the statement. "We are constantly reviewing our offering, and will continue to provide a range of choices, including strong, national low-cost options and full service plans."

In his letter, Péladeau also questions the existence of Glentel, a company co-owned by two of Canada's largest telecommunication companies, Bell and Rogers.

In 2015, Canada's Competition Bureau allowed the joint acquisition of the company to go through, provided that the two telecom giants put up an "administrative firewall" to prevent the sharing of competitively sensitive information.

The bureau did express a worry that the acquisition would "substantially lessen competition in the wireless sector."

In the letter, Péladeau says that while his company has reached out to Loblaw head office regarding the deal with Glentel, "they persisted, favouring commercial interests over the consumer's interest.