Videotron has filed a lawsuit against Rogers, claiming that the company breached its contract related to the sale of Freedom Mobile, which occurred two years ago.
In a notice of action filed this week in the Ontario Superior Court of Justice, the Quebecor subsidiary requested a court order requiring Rogers to “specifically perform their obligations” under the 2022 agreement to transfer Freedom Mobile to the company. Videotron claims that Rogers has been unjustly enriched and seeks $91 million in damages. Its notice of action, however, did not specify how it believes Rogers allegedly breached the contract.
As part of Rogers’ $26 billion acquisition of Shaw Communications, the companies agreed to spin off Freedom (then owned by Shaw) to Videotron in an effort to alleviate competitive concerns. Both transactions received final regulatory approvals in March 2023.
As part of the agreement, Videotron also made other concessions to secure the sale, including committing to offer plans that are at least 20% cheaper than those of Rogers, Bell and Telus. And it agreed to expand its 5G network in Freedom’s operating area within a two-year timeframe.
Meanwhile, Rogers committed to creating 3,000 new jobs in Western Canada and establishing a headquarters in Calgary. The company also pledged to invest $1 billion to boost broadband internet access and 5G services in underserved areas, as well as an additional $2.5 billion in Western Canada’s 5G network.
The agreement included significant penalties for non-compliance, with Videotron facing fines of up to $200 million for breach, while Rogers could be liable for up to $1 billion.
“We increased competition and choice by introducing bundled internet and mobile phone plans in the West,” said Rogers on the one-year anniversary of the merger with Shaw. “In the past year alone, wireless prices in Canada have come down 26 percent while other goods and services have gone up with inflation. ”
The lawsuit comes after Rogers announced a week ago that it had reached a new multi-million dollar deal to continue broadcasting NHL games in Canada. As part of that agreement, the telecom behemoth will pay US$7.7 billion to renew its current 12-year contract for another 12 years. Both companies initially joined forces in 2013, signing a 12-year broadcast deal valued at US$5.2 billion.
This week, NDP Leader Jagmeet Singh urged Prime Minister Mark Carney to immediately block the attempted foreign takeover of nearly half of Rogers’ wireless network by Stephen Schwarzman, a New York billionaire and ally of U.S. President Donald Trump. Singh described it as a clear danger to Canadian sovereignty, national security and the public interest.
