Canada watchdog urges stricter merger review, antitrust reform

Illustration shows Rogers and Shaw Communications logos
Ethernet cables are seen in front of Rogers and Shaw Communications logos in this illustration taken, July 8, 2022. REUTERS/Dado Ruvic/Illustrations//File Photo

OTTAWA, March 15 (Reuters) - Canada's competition watchdog called for stronger merger review rules on Wednesday and recommended some 50 improvements to what it said was outdated antitrust legislation.

"Canada needs more competition. And Canadians need a modern and effective competition law to support that," the Competition Bureau said in a statement.

Canadians have been left with fewer and pricier choices in everything from telecoms to banking after decades of industry consolidation, consumer advocates say. Soaring inflation has worsened the issue of affordability.

The bureau's recommendations are aimed at improving merger evaluations, tackling deceptive marketing and conducting market studies, among other goals.

The watchdog said merger review rules were weak and need to be significantly re-tooled "to address issues with market concentration and harm to the public interest in competition."

The agency is coming off a major defeat in its efforts to block a C$20 billion ($14.6 billion) merger between Rogers Communications Inc (RCIb.TO) and Shaw Communications Inc (SJRb.TO) to create the country's No. 2 telecoms operator.

It failed to convince courts that the transaction, which still needs government approval, is bad for consumers in a country where wireless bills are already among the highest in the world.

In the recommendations on Wednesday, it suggested the bureau be given more time to evaluate mergers and proposed remedies, and that evaluating standards "should be recalibrated to focus on harm to the competitive process."

The Competition Act has not had a thorough update since the 1980s. The federal Liberal government has undertaken a broad review of the law and is consulting Canadians on prospective changes through public consultations.

($1 = 1.3750 Canadian dollars)

Reporting by Ismail Shakil in Ottawa, editing by David Ljunggren and Aurora Ellis

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