Comp. Bureau’s silence on anti-competitive complaint allowing abuse of dominance to persist: TekSavvy

TekSavvy Solutions Inc. has told the Competition Bureau that market dominance in the telecommunications industry will continue to persist because it has “taken no action” to address anti-competitive activities “and has remained silent as incumbents acquire independent competitors and while prices continually rise for consumers.” “This trend can only be expected to worsen if the bureau does not take enforcement action,” the Chatham-Kent, Ont.-based company wrote to the bureau in an Aug. 17 letter. TekSavvy noted that the Wall Communications Inc. report found that the average price of the most popular internet services rose more than 13 per cent from 2020 to 2021, and added that in the past couple of months two wholesale-based competitors exited the market. TekSavvy was referring to BCE Inc.’s acquisition of Ebox Inc. and Quebecor Inc.’s acquisition of VMedia Inc. TekSavvy blamed the acquisitions on incumbents engaging “in a sustained strategy of predatory pricing in the retail market for internet services using their flanker brands.” It said more acquisitions are likely to come because the Canadian Communication Systems Alliance, which represents independent telecommunications companies including Ebox and VMedia, recently issued a new policy to address sales of member companies to non-members. “These flanker brands regularly offer retail prices for a given level of internet service at a price below the wholesale prices they inflated for competitors,” TekSavvy wrote. “It is clear that the incumbents’ predatory pricing strategy is having its desired effect: wholesale-based competitors are unable to compete on price and their businesses are therefore unsustainable, so they are exiting the market.” In Feb. 2020, TekSavvy filed a complaint with the bureau requesting that it investigate a “pattern of anti-competitive activities” in wholesale and retail internet markets by Bell and Rogers. “Bell and Rogers are abusing their dominant position in wholesale markets to increase competitors’ costs, while targeting those same competitors in retail markets with fighting brand offerings priced below competitors’ costs,” Teksavvy claimed at the time. In its Wednesday letter, TekSavvy blamed the bureau for continued rising prices, arguing that it has remained silent on the 2020 complaint and has failed to enforce the Competition Act in Canada’s telecommunications sector. The bureau made it clear that it rejects the merger between Rogers Communications Inc. and Shaw Communications Inc., however, TekSavvy argued that abuse of dominance will persist regardless of the outcome of that case which is now before the Competition Tribunal. “Again, TekSavvy urges the Competition Bureau to take enforcement action to address rampant anti-competitive activity in Canada’s telecommunications industry. 15. Canada is suffering through a cost-of-living crisis. Consumers should not continue to pay increasing, artificially inflated prices for an essential service while heavily subsidized, large incumbent carriers reap record profits,” it wrote.

Comp. Bureau’s silence on anti-competitive complaint allowing abuse of dominance to persist: TekSavvy

Brief | August 17, 2022

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Comp. Bureau’s silence on anti-competitive complaint allowing abuse of dominance to persist: TekSavvy

Brief | August 17, 2022

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