Rogers-Shaw: Federal Court of Appeal dismisses Competition Bureau appeal

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Rogers-Shaw: Federal Court of Appeals Dismisses Competition Bureau Appeal

The Competition Tribunal approved the marriage between the two telecommunications groups in December.

The Competition Bureau will not have another chance to stop Rogers Communications from acquiring Shaw Communications, the Federal Court of Appeals ruled on Tuesday.

Judge David Stratas determined that the Competition Bureau's arguments were not sufficient to overturn the December decision of the Competition Tribunal, which had approved the marriage between the two telecommunications groups, a transaction valued at $26 billion.

It is not enough to pull the leaves and branches and leave the tree standing, rather the whole tree must fall, he said in his ruling on the case. bench, even before the companies concerned had given their answer.

The Competition Tribunal made it clear that the transaction was unlikely to prevent or lessen competition substantially, and its decision was supported by ample evidence, the court said. Judge Stratas.

Even if the Competition Tribunal had been wrong on the narrow points of law that the Commissioner is now raising in this court, we are not persuaded that the result would be any different. It is therefore unnecessary to refer this case to the Competition Tribunal.

The Bureau's arguments focused on what they considered to be four key legal errors regarding the role of the proposed sale of Shaw's wireless carrier, Freedom Mobile, to Videotron in the court ruling.

Brad Shaw and Edward Rogers during one of the CRTC hearings

Counsel for the Bureau, Alexander Gay, argued that the court should have assessed the deal as originally proposed, before the sale of Shaw's Freedom Mobile to Quebecor-owned Videotron was added.

If the deal had been assessed as a remedy to competition concerns, rather than an integral part of the deal, it wouldn't have held up, Gay said.

It is almost entirely a series of service agreements between competitors. It could not have been contemplated, Gay added.

This is a huge mistake. And I think that puts enough doubt in this case to warrant it being dismissed for that very reason.

Judge Strata said the review of the merger alone, which could not proceed without Freedom Mobile's divestiture, would be a foray into fiction and fantasy, and that the court is not chained to the prior structure of the transaction.

Some of the issues raised by the Competition Bureau have been challenged as a combination of questions of fact and law, while the Court of Appeals can only consider questions of law, Justice Stratas pointed out.

The commissioner seems to invite us to reassess the evidence, which we cannot do.

Minister Fran├žois-Philippe Champagne (File photo)

The deal, which Rogers hopes to complete by Jan. 31, still requires approval from federal Industry Minister Francois-Philippe Champagne.

Minister Champagne said in a statement that he was reviewing the decision of the Federal Court of Appeal and would make a decision on the timely agreement.

Promoting competition and affordability in the telecommunications sector has always been, and remains, my top priority, he said.

The Competition Tribunal approved the deal on December 30, after more than four weeks of hearings. Rogers and Shaw first announced their agreement in March 2021.

Rogers Communications, Shaw Communications and Quebecor applauded Tuesday's court ruling.

We welcome this clear, unequivocal and unanimous decision by the Federal Court of Appeals, they said in a joint statement.

We are pursuing with Innovation, Science and Economic Development Canada to obtain the final approval we need to complete these transactions. These will promote competition and create a strong fourth wireless service provider in Canada as well as a stronger competitor in the wireline market.

Advocacy group OpenMedia said in a statement that the deal as it stands means less choice and higher prices.

The deal the court accepted is still terrible for everyday Canadians, said OpenMedia campaign director Matt Hatfield.

He urged Minister Champagne to block the deal and instead set lower rates for internet service providers to access the infrastructure.

The House of Commons Industry and Technology Committee, which previously spoke out against the deal, is due to meet on Wednesday to reconsider the transaction.

Matthew Boswell, Commissioner of Competition, said he was deeply disappointed that the Federal Court of Appeal dismissed their appeal.

While today's developments are discouraging, we remain confident of the correctness of the findings of our investigation and the soundness of our decision to challenge the merger, he said in a press release on Tuesday evening.

We presented a solid and rigorous case to the Tribunal after carrying out an in-depth examination of the facts.

Even if the Office of the competition disagrees with the Tribunal's findings, Mr. Boswell clarified that they accept the decision and will not appeal further.

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