See the news release that corresponds to this position statement.
July 12, 2024 – GATINEAU, QC — On June 7, 2024, the Commissioner of Competition entered into a consent agreement with Bell Media Inc. related to its proposed acquisition of Outedge Media Canada LP, formerly Outfront Media Canada LP. This agreement resolves competition concerns over outdoor advertising services provided by Bell and Outedge using their respective inventories of billboards and transit displays in Ontario and Quebec.
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Background
Following a detailed review, the Commissioner has concluded that the transaction was likely to result in a substantial lessening of competition for the sale of outdoor advertising, including advertising on/within transit systems, that seek to target consumers located in geographic areas no larger than a census metropolitan area (CMA), and likely smaller areas within a CMA. The Competition Bureau’s investigation concluded that the merger was likely to substantially lessen competition in Québec City, Trois-Rivières, Sherbrooke, the Greater Montréal Area and the Greater Toronto Area.
The Bureau relied on information from stakeholders, including the merging parties and third parties throughout the course of its review.
This statement summarizes the approach taken by the Bureau in its review of the transaction.
The Parties
Bell is a communications company that provides a wide range of communication and media products and services to residential, business and wholesale customers. Its subsidiary, Bell Media, provides conventional TV, specialty TV, pay TV, streaming services, digital media services, radio broadcasting services, and out-of-home advertising services to customers nationally across Canada. Astral Out of Home is Bell Media’s out-of-home division, which operates a network of out-of-home advertising assets in Canada.
Outedge is the former Canadian subsidiary of OUTFRONT Media Inc., a real estate investment trust that provides advertising space on out-of-home advertising structures and sites in the United States and, prior to the close of the transaction, in Canada.
Relevant Markets
The parties provide out-of-home advertising services, which are commonly described as advertising that is experienced outside of a consumer’s home. The out-of-home category includes, but is not limited to, outdoor advertising on billboards and street furniture, airport advertising, indoor / place-based advertising and advertising on/within transit systems.
The out-of-home mediums required by an advertiser vary across different advertising campaigns, and as such, an advertiser’s willingness to substitute across different out-of-home advertising mediums can vary. The Bureau analyzed advertisers’ willingness to substitute across different media types (e.g. television, radio, online) and across different out-of-home mediums and concluded that the product market is likely no broader than the sale of outdoor advertising, including billboards, street furniture, and advertising on/within transit systems.
The geographic location of outdoor advertising assets is an important factor when advertisers make purchasing decisions. Again, an advertiser’s willingness to substitute across different locations may vary by each advertising campaign. At times, advertisers may seek coverage across a CMA, for example, when mass messaging to a relatively diversified audience is important. At other times advertisers may value targeting certain areas / demographics within a CMA, and as such, may be unwilling to substitute outdoor advertising in other areas of a CMA. The Bureau’s analysis considered that there are many potential geographic markets of importance to advertisers, including areas as broad as a CMA and as narrow as localized areas within a CMA.
Competitive Effects
The Bureau’s analysis led it to conclude that the transaction would likely result in a substantial lessening of competition for the sale of outdoor advertising in each of the CMA Markets. Outedge and Bell vigorously competed with one another in these markets where there are a limited number of rival suppliers of outdoor advertising services. The loss of that rivalry would have resulted in higher prices and fewer options for customers.
Barriers to Entry
The Bureau determined that significant barriers to entry and expansion exist in the relevant markets, primarily due to significant regulatory challenges faced by outdoor advertising providers when attempting to add displays in municipalities across Canada. Many municipalities have strict by-laws and lengthy permitting processes that advertising service providers must follow in order to develop new displays. In some cases, municipalities have introduced by laws which entirely prohibit the addition of new outdoor advertising displays.
Conclusion and Remedy
As described above, the Bureau concluded that the merger was likely to substantially lessen competition for the sale of outdoor advertising. Bell has entered into a Consent Agreement with the Commissioner that resolves the Bureau’s concerns.
As part of this agreement, Bell must sell a total of 669 advertising displays, including certain digital displays, across the CMA markets. In designing the remedy, the Bureau considered the differences across Bell and Outedge’s outdoor assets. This was to ensure that a purchaser is provided a sufficient diversity of outdoor advertising assets to vigorously and effectively compete with Bell across advertisers’ varying requirements for outdoor advertising following consummation of the transaction.
This agreement is necessary to resolve the substantial lessening of competition resulting from the transaction.