Canada’s Competition Bureau is seeking court approval to block the proposed $26-billion purchase of Shaw Communications by Rogers Communication first announced more than a year ago. 

The Bureau, Canada’s competition watchdog, said its investigation shows that the merger would prevent or lesson competition by eliminating the lower-priced competition currently provided by Shaw, and prevent competition for wireless services. 

The Bureau cannot simply decree that the merger cannot take place. Procedurally, it must request an order from the Competition Tribunal to prevent the merger from proceeding. The Bureau has also requested an injunction to stop the merger until its application can be heard. Both Shaw and Rogers have announced plans to contest the Competition Bureau’s action. 

The Bureau must prove its case before the Tribunal. Rogers and Shaw have 45 days to file responses to the Bureau’s submission, and the Bureau will then have 14 days to reply to the Rogers and Shaw submissions. 

The Bureau is responsible for enforcing Canada’s Competition Act. Under that Act, mergers are subject to potential investigation to determine whether it is likely to result in a substantial lessening or prevention of competition in any market in Canada. 

The Bureau said it was challenging the merger to “shield Canadians from higher prices, poorer service quality and fewer choices which are likely to occur as a result of the merger.” The removal of Shaw as a competitor “threatens to undo the significant progress it has made introducing more competition into an already concentrated wireless services market. The action is intended to safeguard that progress, for the benefit of Canadians, by maintaining an effective, growing and disruptive regional competitor.”

Rogers is one of three communications giants (with Bell and Telus) that services about 87% of Canadian subscribers. Shaw provides wireless service to more than 2 million customers in Ontario, Alberta and British Columbia. Since entering the wireless market in 2016, Shaw has driven down prices and provided service innovations, and the bureau noted a decline in competition in the market since the proposed merger was announced.