Bell and Rogers sometimes inflated rates by more than 900 per cent, CRTC found
On Feb. 21, TekSavvy Solutions Inc. filed a complaint with the Competition Bureau, alleging that internet service providers Bell Canada and Rogers Communications Canada Inc. have engaged in anti-competitive practices such as rate manipulation.
In the complaint, which sought an inquiry and enforcement action by the federal competition commissioner, TekSavvy, a competitor of Bell and Rogers, says the telecommunications companies took advantage of their dominant positions in the wholesale market to drive up costs. In the retail markets, Bell and Rogers targeted competitors using their internet brands, respectively named “Virgin” and “Fido,” to offer retail prices below the wholesale prices in order to exclude retail competitors, the complaint said.
TekSavvy argued that Bell and Rogers had met all three requisites under s. 79(1) of the Competition Act, RSC 1985, c C-34: the two companies jointly dominated the wholesale and retail markets in their incumbent serving territories, they committed anti-competitive acts to the effect of excluding competitors such as TekSavvy, and they substantially lessened and prevented competition in the markets due to their anti-competitive acts.
In its complaint, TekSavvy charged that the alleged anti-competitive conduct had resulted in or could result in many unfavourable consequences: higher retail prices in Canada compared with other countries, costing Canadian consumers millions of dollars; the exit of wholesale-based competitors such as TekSavvy from retail internet markets; and a decreased likelihood that competitors would enter new markets, such as mobile markets.
In 2019, the Canadian Radio-television and Telecommunications Commission (CRTC) found that Bell and Rogers had violated rate-setting rules more than 50 times from 2016 to 2019 and had inflated rates sometimes by more than 900 per cent. The CRTC issued an order calling for the correction of these inflated rates and the repayment of the amounts unjustly taken from competitors.
Bell and Rogers were successful in staying execution of the order. In their appeal of the CRTC decision, the companies argue that its enforcement would have catastrophic effects on their businesses.
According to a news release by TekSavvy, more than 150,000 Canadians have called for the enforcement of the CRTC order and for action by the federal cabinet to lower mobile phone and internet bills.
Janet Lo, TekSavvy’s vice-president for consumer legal affairs, echoed the call for the rejection of the petitions to overturn the CRTC ruling and for the lowering of phone and internet bills. “These kind of anti-competitive activities are the reason why Canadians pay among the very highest prices for Internet and Mobile services in the world,” she said.