Rogers outage ruled to be relevant to Shaw merger decision

The Competition Tribunal also ruled that the proposed sale of Freedom Mobile was not a sufficient remedy to concerns.
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The Competition Tribunal has decided that a massive phone and internet outage last month is relevant to its decision about whether or not to allow a merger between Rogers and Shaw to continue.

The $26 billion takeover deal, originally intended to close this summer, has been on hold since May when the Competition Bureau opposed the deal, citing the impact the merger would have on competition, service and prices in the wireless sector. When mediation sessions failed to reach a conclusion¬†– with the Competition Bureau saying the proposed sale of Shaw’s Freedom Mobile to Quebecor was not a sufficient remedy – the matter was referred to the Competition Tribunal.

On Jul. 8, just days after the mediation sessions, Rogers wireless and internet services went down for most of the day, and in some cases longer for certain users. In addition to impacting millions of customers and businesses across the country, the outage also impacted things like payment systems, banking and even 911 lines. The outage was later determined to have been caused by a coding error.

For those watching the deal, the incident was an example of the kinds of issues that can arise when one company controls too much of the telecommunications infrastructure Canadians rely on. Both Rogers and the Commissioner of Competition made submissions last week about whether or not the outage was relevant to the Tribunal’s proceedings, with the Tribunal ultimately deciding that it was.

In a separate filing on Aug. 15 but made public on Monday, the Competition Tribunal also said the proposed sale of Freedom Mobile to Quebecor did not do enough to “eliminate the substantial lessening and prevention of competition,”¬†seemingly aligning with the Competition Bureau’s reasoning for blocking the deal. That ruling was made just three days after Rogers, Shaw and Quebecor finalized the details of the Freedom Mobile sale, though it remains subject to the Rogers and Shaw merger closing.

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