“The Competition Bureau is investigating alleged anti-competitive conduct contrary to the conspiracy provisions of the Competition Act,” Commissioner John Pecman said in a statement, adding he was also examining possible merger violations.

No charges have been laid, and allegations of a “conspiracy” have not been tested in court.

Earlier, search warrants were executed at Postmedia and Torstar’s offices related to their November 27, 2017, swapping of 41 newspapers – 34 of which were immediately shuttered.

Postmedia and Torstar both said they were cooperating with the investigation. Postmedia also rejected accusations of wrongdoing.

“Postmedia is strongly of the view that there has been no contravention of the Competition Act with respect to this matter,” it said.

The November deal saw Postmedia, which owns dailies in most major Canadian cities including the National Post, acquire 22 weekly papers as well as two free dailies, and immediately put all but one of them on the chopping block.

Torstar – which publishes Canada’s largest circulation daily, the Toronto Star, as well its subsidiary Metroland – acquired 15 weekly and small-town daily newspapers mostly in Ontario, as well as free dailies 24 Hours Toronto and 24 Hours Vancouver.

Metroland, citing falling advertising revenues, also shuttered three daily and eight community publications.

The deal was called “a deathblow to local news coverage” by the union representing media workers, while Ottawa earmarked C$50 million (RM152 million) for struggling local news agencies in last month’s federal budget.