Competition Bureau searches Postmedia and Torstar offices in probe of newspaper deal

Competition Bureau officials executed search warrants at the Toronto-area headquarters of Postmedia and Torstar on Monday, part of an investigation into a deal between the companies last November that saw them swap more than 40 newspapers and then shut them down.

Competition Bureau commissioner John Pecman confirmed a Globe and Mail report early Monday that the bureau searched the offices of the companies involved, and that the search warrants were related to the bureau's investigation of November's deal.

"In response to news reports and questions from the media, I can confirm that the Competition Bureau is investigating alleged anti-competitive conduct contrary to the conspiracy provisions of the Competition Act," Pecman said.

"Investigators with the bureau are currently gathering evidence to determine the facts relating to the alleged conspiracy. There is no conclusion of wrongdoing at this time and no charges have been laid."

In the November deal, Postmedia announced that it had obtained about two dozen regional community newspapers across Ontario, for no cash cost. In exchange, Postmedia handed over the reins to almost as many other community papers to Toronto Star.

Following the deal, both companies announced that most of the acquired newspapers would be shut down, which resulted in the loss of almost 300 jobs across the two chains.

In a statement Monday, Postmedia defended itself.

"Postmedia is strongly of the view that there has been no contravention of the Competition Act with respect to this matter and Postmedia is co-operating with the Competition Bureau in connection with their investigation."

Torstar told The Canadian Press that officials visited its corporate offices to seek more information about the deal in which 41 newspapers changed hands and 36 were closed.

They said they would be voluntarily providing the bureau with additional documents on the deal.