Telecommunications company Rogers Communications signage is pictured in Ottawa in July, 2022. The Competition Tribunal has ordered the Commissioner of Competition to pay $9,298,152.58 to Rogers for costs relating to the expert witnesses who produced reports and testified during the weeks-long hearing in front of the tribunal.Sean Kilpatrick/The Canadian Press
Canada’s merger court has ordered the Commissioner of Competition to pay Rogers Communications Inc. and Shaw Communications Inc. millions of dollars of costs related to the commissioner’s unsuccessful attempt to block the telecoms’ $20-billion deal.
The Competition Tribunal, which adjudicates cases brought forward by the Competition Bureau, an independent law-enforcement agency, has ordered the Commissioner of Competition to pay $9,298,152.58 to Rogers RCI-B-T and $2,836,920.30 to Shaw for costs relating to the expert witnesses who produced reports and testified during the weeks-long hearing in front of the tribunal.
Additionally, the tribunal has awarded legal fees of $414,720 to Rogers and $416,187 to Shaw, which has since been absorbed by Rogers.
In a document outlining its reasons, posted online Tuesday, the Competition Tribunal says that although the legal costs awarded to Rogers and Shaw “represent only a small fraction of the legal fees actually incurred, it appears that they far exceed any amount that has previously been awarded by the Tribunal for legal fees.”
According to the tribunal’s decision, signed by Federal Court Chief Justice Paul Crampton, Competition Commissioner Matthew Boswell “adopted an unnecessarily contentious approach at numerous points during the litigation” and was “intransigent” in refusing to focus on the divestiture of Shaw’s wireless carrier, Freedom Mobile, to Quebecor Inc.
Rogers and Shaw agreed prior to the hearing to sell Freedom to Quebecor’s QBR-B-T Videotron Ltd. subsidiary for $2.85-billion in an attempt to address the Competition Bureau’s concerns about eliminating Canada’s fourth-largest wireless carrier.
The bureau had argued that because the telecoms had only agreed to sell Freedom after the agency had already filed its application to block the takeover, the tribunal should have weighed the impact of the proposed deal between Rogers and Shaw before considering the divestiture. This would have put the burden on Rogers and Shaw to prove that the divestiture addressed any potential lessening of competition resulting from the deal, according to the bureau.
The tribunal said on Tuesday that the amounts it has awarded to the telecoms are “very substantial” for a public body and that the merger court is “mindful that the public interest may suffer if the level of costs awarded against the Commissioner were to begin to reach the point at which they have a chilling effect on his willingness to bring responsible cases that are in the public interest.”
The tribunal noted that although the Commissioner kept pursuing his attempt to block the deal even after the divestiture of Freedom was announced, “it was by no means vexatious or irresponsible of him to have done so.”
“It raised some novel issues, and there was a broad public interest in bringing the case, even though it should have been recast to focus on the Divestiture after it was announced in June 2022,” the tribunal said.
Sarah Brown, a spokesperson for the Competition Bureau, said the agency stands by its decision to challenge the takeover and is “disappointed with some of the Competition Tribunal’s characterizations of the Commissioner’s conduct in its reasons regarding the costs awards in this matter.”
“The commissioner acted in the public interest to protect competition throughout the entire proceeding and we fundamentally disagree with any suggestion to the contrary. We note that the tribunal expressly found that there was a broad public interest in bringing this case and that it was a responsible case to bring,” Ms. Brown said in a statement.
“In all cases, the bureau’s mandate is to protect competition and the public interest in competition for Canadians. And we remain undeterred in our pursuits to do just that,” she added.
Rogers’ takeover of Shaw closed in April of this year, after securing approval from Industry Minister François-Philippe Champagne, whose department had to sign off on the transfer of Shaw’s wireless licences to Quebecor.
Alexandra Posadzki