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TekSavvy wants Competition Bureau to address predatory internet pricing in Canada

The Competition Bureau's failure to do so is leading independent service providers to go out of business, the ISP says

TekSavvy says the Competition Bureau is not enforcing anti-competitive behaviour under the Competition Act, forcing Internet Service Providers (ISPs) to go out of business.

In a letter addressed to the Canadian regulator, TekSavvy says the Bureau has taken no action to address the anti-competitive activities it detailed in a February 2020 complaint.

That complaint says incumbents took part in “predatory pricing” of retail internet services through their flanker brands. Citing Virgin (Bell’s flanker brand), Fido (Rogers’ flanker brand), and Fizz (Vidéotron’s flanker brand), TekSavvy says these flanker brands offer retail internet prices that cost less than the “inflated” wholesale price incumbents charge competitors.

“The Bureau has taken no action to address the anti-competitive activities detailed in our complaint 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 letter reads.

TekSavvy warned such practice would lead wholesale-based competitions to exit the market, a reality it says has come true. In its recent letter, TekSavvy highlights Bell’s acquisition of EBOX and Québecor’s takeover of VMedia.

“By acquiring independent companies and continuing to operate them under their established brands, incumbents get to both eliminate their competitors and benefit from the goodwill they have built as independent alternatives,” the letter says.

Such actions are leading to higher prices for consumers. According to the Wall Report, which compared internet services. The most popular internet services saw a 13 percent price hike between 2020 and 2021.

TekSavvy says the price hike isn’t related to global market forces. The Wall Report details broadband costs have decreased in other countries covered in the report, except for Canada and Japan.

“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,” TekSavvy says.

Update 2022/08/18 at 3:18pm ET: Updated the headline to more accurately reflect the content of the story.

Image credit: Shutterstock 

Source: TekSavvy

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