New wireless player Mobilicity has filed a complaint with the Competition Bureau against Rogers' unlimited talk and text service Chatr, saying the rival service is too similar to its own and aims to put the smaller company out of business.
Mobilicity alleges that Rogers is in breach of section 78 of the Competition Act which prohibits market leaders from using "fighting brands to discipline or eliminate a competitor."
The filing was also made with other government agencies.
"We are strong proponents of a healthy, fair and sustainable competitive environment in Canada’s wireless sector, and we are confident that the Competition Bureau and federal government will ensure this remains the case," said chief operating officer Stewart Lyons.
Rogers Communications (TSX:RCI.B), Canada's largest wireless company, said it hasn't been notified by any government agencies, including the Competition Bureau, said John Boynton, executive vice-president and chief marketing officer.
"Other new entrants and competitors are welcoming the competition. They, like us, believe it’s good for customers," Boynton said in a statement.
"We've adhered to regulations and proactively reached out to the Competition Bureau. We are committed to Chatr and look forward to it being a success."
The Competition Bureau confirmed it has received the complaint from Mobilicity and will review it to determine whether there's any evidence of the allegations, said spokesman Greg Scott.
"Should we arrive at a determination that there is an anti-competitive behaviour, then we have a couple of options," he said. "Our first preference is always to try to arrive at a mutually agreeable resolution.
"That could mean done in terms of voluntary undertakings, it can be done through a legally binding consent agreement between the Bureau and the parties."
If the two parties can't agree on a resolution, the matter could go to the federal Competition Tribunal, which can issue legally binding orders, Scott said.
Mobilicity was one of the new competitors that emerged after the federal government sold additional spectrum — the radio frequencies over which mobile phones operate — in a 2008 auction that raised $4.25 billion for Ottawa.
Some of the available spectrum was set aside for newcomers, as part of the government's goal of promoting competition in Canada's wireless industry — which is dominated by Rogers, Bell (TSX:BCE) and Telus (TSX:T) after years of takeovers of smaller players.
Critics of the domestic telecom sector complain that Canadian consumers are paying much higher prices for mobile phone services than Americans or Europeans because of the industry's concentration.
Chatr joins Rogers Wireless and Fido as the third wireless service offered by Rogers, which is also Canada's largest cable TV operator and a magazine publisher and TV broadcaster.
Bell has relaunched its Solo brand as an unlimited talk and text service and Telus owns discount brand Koodo.
Toronto-based Mobilicity had previously announced in July that it would pursue legal action against Rogers over its Chatr service.