Competition Bureau needs to do some ‘soul-searching’ after Rogers-Shaw

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Canada’s Competition Bureau ought to do some “soul-searching” after its failed effort to block the $26-billion merger of Rogers Communications Inc. and Shaw Communications Inc., according to a competition lawyer who followed the battle closely.

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Michael Osborne, chair of the Canadian competition practice at law firm Cozen O’Connor LLP, said the Bureau’s case was soundly dismissed by both the Competition Tribunal that heard the initial challenge and the federal court that heard the watchdog’s appeal.

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“The Federal Court of Appeal rejected every argument put forth by the Commissioner,” Osborne said.

The court also confirmed the Tribunal’s finding that a modified merger involved the divestment of Freedom Mobile to Quebecor’s Videotron would actually increase competition, and supported its decision to look at that deal and not what the court called the “foray into fiction and fantasy” urged by the Commissioner.

“Close, this case, was not,” Justice David Stratas told the court, noting that delaying the transaction might actually cause a deal that is “pro-competitive and in the public interest, to die.”

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In a statement regarding the dismissal of his appeal, Commissioner of Competition Matthew Boswell said his Bureau was “truly disappointed” and continued to disagree with the findings. Despite this, the Bureau said it accepted the appeals court’s decision and would not be pursuing a further appeal.

“We will never compromise in our efforts to protect and promote competition for the benefit of Canadians,” Boswell said.

Osborne said the speed with which the appeals court dismissed the case was not unusual, but that it was nevertheless a rebuke.

“It’s a bit of a slap in the face to the Commissioner because it basically says, ‘Buddy, you didn’t even get to first base on this deal.’”

“They should perhaps do a little bit of soul searching about how they’ve been developing their cases,” Osborne said, noting the agency also recently lost its challenge of the acquisition of a primary grain elevator in Manitoba.

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The Bureau’s consecutive losses on the Rogers-Shaw file come as Canada’s competition rules face criticism from lay Canadians and policy experts, including the federal competition watchdog himself.

Osborne said despite these losses, the Competition Bureau still continues to do what it does and is successful every year in obtaining remedies from merging parties where the mergers do cause issues.

He noted that Canadians shouldn’t lose sight of the fact that the Bureau reviews around 200 mergers a year, wherein 90 per cent don’t pose any issue and are finished being reviewed within two weeks.

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“The fact that the Bureau has won all but one challenge in the tribunal doesn’t mean that they’re not good at doing this work,” he added, saying this means the antitrust bureau has been successful in settling the cases where they were going to win and lose cases where they weren’t going to win and the parties were willing to challenge them.

The fate of the proposed $26-billion merger is now in the hands of federal industry minister François-Philippe Champagne.

Osborne said Innovation, Science and Economic Development Canada (ISED), led by Champagne, now has no choice but to approve the spectrum transfer.

“It’s not his business to second-guess the Competition Tribunal’s finding that the modified merger would be good for competition.”

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