The telecom companies said Friday that they were informed of the bureau’s intent to appeal the Tribunal’s decision, released late Thursday, as well as that the bureau will apply for an injunction to block the deal from closing until an appeal is heard.
The Competition Bureau confirmed its appeal Friday via email and Twitter, and said it won’t be issuing a formal statement at this time, but said there would be more updates in the coming days.
The Competition Tribunal issued only a summary of the decision, with plans to release the full text by late Saturday, concluding that the merger was not likely to result in higher prices for wireless customers in Western Canada, and that the Tribunal was satisfied the plan to sell Shaw’s Freedom Mobile to Quebecor Inc.’s Videotron was adequate to ensure competition isn’t substantially reduced.
The decision clears a path for the deal to go ahead, requiring only approval from federal Industry Minster François-Philippe Champagne.
Minister Champagne’s spokesperson Laurie Bouchard said they will review the decision in detail and will have more to say in due course, while opposition leader Pierre Poilievre said at a news conference that he has serious concerns about more consolidation in the telecoms sector.
An injunction, if granted, would push the closing date back further still.
What the grounds for appeal could be is difficult to say without the full text of the decision, said Jennifer Quaid, an associate professor and vice-dean of research at University of Ottawa’s Faculty of Law.
Any potential precedents will also have to wait to be seen in the full decision, but for now it looks like a fairly standard decision, said Quaid.
The Tribunal has never fully blocked a merger, as the Competition Bureau was seeking, while only in a couple of cases has it forced companies to sell some assets to approval a deal, she said.
In its summary, the Tribunal said Videotron’s entry into Western Canada would be able to offer prices at least as competitive as what was offered before the merger, while overall the deal is also likely to spur increased competition among the three major telecoms companies in the region.
“The merger and divestiture are not likely to result in materially higher prices, relative to those that would likely prevail in the absence of the arrangement,” the Tribunal said.
Quaid said the speed of the decision is quite a bit faster than in the past, where the Tribunal has taken months to issue a ruling, but that the hearing was conducted under an expedited process.
She said the unsurprising decision points to potential problems in Canada’s competition laws, and the importance of the ongoing review of the merger review system. The review should tackle a range of issues, including potentially broader ones like the distribution of a merger’s benefits, which currently don’t much factor in.
“The time is ripe for taking a harder look at some things that traditionally were not in the radar,” said Quaid.
Keldon Bester, co-founder of the Canadian Anti-Monopoly Project, said in a statement that the decision is a product of Canada’s permissive and outdated merger laws, but that the federal government could still make a difference by setting out more aggressive pricing targets as part of its conditions for approval, as well as timelines to meet them and consequences for not doing so.
