By Ahmad Hathout
The Ontario Superior Court earlier this year upheld a decision by an arbitrator who ruled that Rogers cannot offer its credit card in Glentel stores, which are co-owned by the cable giant and Bell.
The dispute dates back to 2024, when Rogers took the retailer to the same court over its decision to pull the cable giant’s Mastercard, which was offered starting in September that year as a bundle with its telecom services. Bell told the retailer that it believed the distribution of the cards was a violation of the telecoms’ agreement, which has a parity principle that requires equal treatment, and Bell did not offer its own credit card. Glentel got an independent concurring legal opinion. The court allowed Rogers to continue offering the card until a final ruling.
The telecoms agreed to go to arbitration later that year. Rogers relied on an exception to the parity principle, which allows either carrier to pay a commission to Glentel staff for processing an “exclusive service.” Bell argued Rogers – which was paying $15 per activation – could not do this because the credit card is not a “service” as defined by the agreement. Rogers argued the card is an “ancillary service” bundled with its telecom services, comparing it to financial and loyalty programs offered by Bell, which argued its extras “automatically come with the service,” as opposed to a credit card with its separate application process.
The issue then turned on the following language: “Whether Glentel may sell, distribute, market and promote at Glentel retail locations the Rogers-branded Mastercard … in a bundle with Rogers wireless and wireline services…”
During the arbitration hearing, counsel for Rogers told the arbitrator that it found no significance in the word “sold” when defining the exchange of the credit card to customers, which appeared – because the card is not purchased with money – to be used as a shorthand for any of the other terms described the language in question: distribute, market or promote.
The arbitrator, a former judge of the Court of Appeal, ruled that, within the confines of the dispute language, the credit card is a financial service but not an “ancillary service to a Rogers telecom service” and therefore not a “service” under the agreement. An “ancillary service” includes telecom-related service that “supplement[s] the use or operation or accessibility” of the primary service.
That reasoning informed her conclusion that the credit card is, therefore, not an “exclusive service” for which Glentel staff can be compensated for transacting.
Rogers appealed to the Ontario Superior Court on the basis that the arbitrator only answered the narrower question about whether the credit card can be “sold” and not the question that both Rogers and Bell counsel asked her to address in an emailed follow-up after their oral hearing but right up against the decision deadline: whether the Mastercard can be “sold, distributed, marketed and/or promoted.”
The Superior Court disagreed for a couple of reasons, the key one being Rogers counsel did not think the word “sold” held significance as it relates to the other terms. Instead, the court noted that the counsel’s written and oral argument focused on whether the credit card was “ancillary” to the telecom service with which it was being bundled, and the arbitrator answered that question in the negative. In other words, as counsel initially agreed, it did not matter whether Glentel was selling, promoting or offering the card for a conclusion on the ancillary service question to be answered.
Rogers also argued that the arbitrator did not address its alternative argument: that the credit card could also be found to be a “system promotion” under a different section of the distribution agreement.
While the court agreed that the arbitrator did not explicitly address that question, she did mention that section in the reasons, the inference being she had read that portion of the agreement.
Ultimately, though, the alternative argument wasn’t a core issue to Rogers’s argument, the court found.
“Counsel had been working on the dispute for several months,” the court said in its reasons. “They litigated the injunctions based on Rogers’ theory that its credit card was an ‘ancillary service.’ Rogers developed this argument in its written submissions to the arbitrator. The alternative argument could fairly be described as an afterthought, arrived at ‘on the fly.’”
“If I was to decide this question, I would decide the question in favour of Bell,” the court continued. “A contract to accept a credit card is not equivalent to discounts or free items used to incentivize the purchase of telecommunication services. Rogers’ alternative argument did not have merit.”
The court also found that the arbitrator rightly rejected Rogers’s argument that it would be unfair to permit Bell’s perks and benefits to be offered and not its credit card.
To that, the court agreed with the arbitrator’s reasoning that Bell’s services were not the question on the arbitration and that Bell would not have characterized its perks and benefits as “ancillary services.”
“To the contrary, had the arbitrator found that Bell’s promotional perks were ‘ancillary services,’ this would have been inconsistent with how she defined that term in the agreement,” the court said.
Rogers did not respond to a question about whether it will appeal the decision.
