Rogers-Shaw deal goes to federal court; Competition Bureau says proposed sale of Freedom to Vidéotron is ‘parasitic’

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Today’s competition bureau Is making a case for it in front of federal court of appeal in Ottawa, in its latest attempt to derail the Rogers-Shaw merger.

The bureau’s main arguments revolved around legal errors, which it claimed led the competition tribunal rule in favor of transaction On December 29, 2022.

Bureau also introduced TechSavvy appeals to the CRTC To review the merger as additional evidence for appeal.

According to the competition watchdog, the Rogers-Shaw merger should have been treated independently as a standalone transaction before looking at the side deal (the proposed sale of Freedom Mobile to Videotron), which it refers to as ‘parasitic’ , because it lives or dies depending on whether the merger agreement survives or not.

The Competition Tribunal had earlier said that the decision would not have been any different if the investigation had been carried out as the bureau intended.

The bureau argued today that it is not a crystal ball to know for sure whether the outcome would have been different, but “doubt” exists and has to be cleared, especially as it relates to the millions of Canadians in the western provinces who use cell phones. are users. “They deserve to know.”

Further, the bureau argued, the proposed disinvestment of Freedom Mobile to Videotron is a measure that is purely structural remedies (one-shot measures aimed at maintaining/restoring the structure) rather than practical remedies (merged entity is influenced by the future behavior of of the market by creating a new/increased competitor). Behavioral remedies, the bureau argued, are not admissible under the section 92 of the Competition Act,

This realization prompted Rogers and Shaw to change gears in August 2022 and revise their pleas and language to make it appear as if the transaction was one with the proposed side divestment, so that they would treat Freedom-Videotron as a standalone measure. I can offset the behavioral components of the values. ,

Accepting the tribunal’s decision would mean circumventing the Competition Act, the bureau argued. “There is an important balance between what the commissioner does and what the tribunal does, and what the tribunal has brought before them,” it said, rather than redefining the transactions brought before it.

It is not known whether the result of today’s hearing will be out on the same day. The deal will undergo another round of scrutiny by the House of Commons industry and technology committee tomorrow, before heading to Minister François-Philippe Champagne for a final decision.

Shaw and Rogers are hoping to finalize the deal before January 31 to avoid heavy penalties or lawsuits from investors.

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