Competition Bureau oks Quebecor/Videotron merger

3/13/01

Ottawa, Ont. - The Competition Bureau has ruled that since Quebecor will be divesting itself of the TQS television network, it will not oppose the remainder of the transaction between Quebecor and Groupe Vidéotron.

On November 10 the Bureau filed an application for a consent order with the Competition Tribunal regarding the sale of TQS by Quebecor. The purpose of the order is to maintain competition in the sale of French-language television advertising time in Quebec. In the absence of a divestiture of the TQS network, the proposed acquisition of Groupe Vidéotron would have given Quebecor control of more than half of all French-language television advertising revenues in Quebec.

On January 15, the Competition Tribunal issued an order requiring Quebecor to sell TQS if the CRTC approved Quebecor's acquisition of the TVA television network. Under the order, Quebecor must sell its interests in TQS by December 31, 2001; otherwise, the sale will be made by a trustee. Meanwhile, the activities of TQS and TVA will remain separate under existing trust arrangements.

"The Bureau's review focussed on the economic impacts of the transaction," said Gaston Jorré, senior deputy commissioner of competition, mergers branch. "We had serious concerns regarding the impact of this transaction on competition in the television advertising market and the sale of TQS will ensure that competition in this market remains strong."

The Bureau has since completed its review of the other aspects of this transaction. This analysis looked at the possible impacts on a number of other advertising markets, including the supply of advertising space in magazines, on Internet sites and in other French-language media in Quebec. The Bureau concluded that competition will remain vigorous in all of these markets.

In addition, the Bureau studied the issue of access to high-speed Internet services. It did not find any areas of concern in this matter since Internet access services via telephone networks will continue to deliver strong competition. The CRTC has also required the country's four largest cable companies to make their networks accessible to competing Internet service providers.

This transaction, however, is still subject to CRTC approval.


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