By Christopher Guly
OTTAWA — The federal NDP has asked Matthew Boswell, the commissioner of competition, to review an agreement between The Mobile Shop, a division of Loblaws Inc. and Glentel, which is jointly owned by Rogers and Bell, following a letter the head of Quebecor sent to the federal industry minister calling the deal “anti-competitive.”
“If this agreement is not opposed, it will result in reduced competition and choice for consumers,” wrote federal NDP leader Jagmeet Singh and Brian Masse, the party’s critic for innovation, science and industry in their May 22 letter to Boswell.
“Canadians need more competition, not less,” they said. “That’s why it’s so concerning that Loblaws appears to be teaming up with Rogers and Bell to block competition and increase prices for Canadians.”
In his May 9 letter to Innovation, Science and Industry Minister François-Philippe Champagne that was obtained by Cartt, Quebecor president and CEO Pierre Karl Péladeau said that Loblaw “decided to prematurely terminate the supply agreement between The Mobile Shop and his company’s Freedom Mobile subsidiary.
“Loblaw describes this decision as simply a choice of supplier for its stores,” wrote Péladeau. “According to our information, however, it is a stratagem designed to exclude some carriers in favour of Glentel.”
He said that the impact of the decision will be felt nationwide, as there are more than 180 Mobile Shop outlets in Loblaw grocery stores.
“I should also point out that the Glentel model, in which two direct competitors join forces, is questionable from a competitive standpoint and, to our knowledge, has no equivalent in other industries,” added Péladeau, who called on Champagne to “intervene directly and firmly with Loblaw. Glentel, Bell and Rogers to end their anticompetitive maneuvers.”
On Wednesday, Champagne told reporters on Parliament Hill that Quebecor’s letter should have been sent to the Competition Bureau, which holds the power to conduct investigations.
Audrey Milette, Champagne’s press secretary, told Cartt that Bill C-56, which amended the Competition Act and became law last December, “broadened the scope of what is considered unfair practices and unfair pricing and gave more power to the commissioner.”
In their letter to the competition commissioner, Singh and Masse said that “the allegations that Loblaws ended [its] contract with a telecom provider early to give Glentel an advantage at the Mobile Shop could be seen as a move to exclude other telecom providers from the more than 180 locations operating out of Loblaw grocery stores.”
They called on the Competition Bureau to “conduct a comprehensive investigation into these allegations, and into the potential abuse of market dominance by Loblaws, Bell, and Rogers to restrict competition and choice for Canadian consumers.”
President’s Choice Financial, which operates The Mobile Shop, said in a statement that the in-store kiosks represent less than 5 per cent of sales of mobile phones and plans in Canada, and does not operate in Quebec.
“Based on our limited market presence in mobile, our decision of which carriers to sell does absolutely nothing to competition,” said the statement, which added that “we have not seen” Péladeau’s letter and therefore could “not provide any information on it specifically.”
However, PC Financial also said that it “went through a competitive process with all carriers, asking them for various scenarios” and that “Quebecor chose not to fully participate.”
“Of our current carriers, Quebecor is the only one who currently does not have national coverage, and therefore is only available in 128 of our 201 stores,” said the statement, which added that PC Financial does “not currently have any agreement that requires The Mobile Shop to buy or offer any Quebecor product in our stores.”
Beyond Péladeau’s letter to Champagne, Quebecor said in a statement that it is “deeply concerned about Loblaw’s desire to drive us out of The Mobile Shop,” a concern the company said that “should be shared by Canadian consumers who will see wireless competition weakened by this highly subjective decision.”
“It is very troubling to potentially see Loblaw in league with the telecom oligopoly.”
Masse told Cartt that the NDP wants the Competition Bureau to investigate whether the termination of Quebecor’s contract with The Mobile Shop was conducted in “a fair and proper way” and whether there was a bidding process that resulted in the awarding of the contract to Glentel, and previously to Quebecor.
Photo of NDP MP Brian Masse via party
