October 27, 2024

Welcome to Letters from CAMP, a newsletter on anti-monopoly activity in Canada and abroad, brought to you by the Canadian Anti-Monopoly Project. In this installment we have:

• The Globe and Mail editorial board calls on policy makers to address food consolidation
• Canada’s big banks attempt to shape the future of open banking to their liking
• FTC Chair Khan notches another win against a so-called luxury merger

Let’s dive in.

Canadian Farmers Caught Between Giants

Last week, CAMP released our new report From Plow to Pantry: Monopoly in the Canadian Food System, detailing how consolidation has affected every level of the food supply chain. In particular, the report focused on how farmers are caught between high levels of consolidation at both ends of their business, leaving them with few options and little competition.

This week, the Globe and Mail’s editorial board called on Canadian policy makers to do something about it. The piece highlights the challenges Canadian farmers face as they are squeezed by oligopolies both when buying inputs and when selling their products—trapped between monopolies at both ends of the supply chain.

The content of the editorial will be familiar to Letters from CAMP readers. Just one example, consolidation among beef processors has led to only two companies controlling effectively all Canada’s beef slaughter capacity—a shocking drop from the diversity that existed as recently as 2005. This monopolization affects not just the prices paid at the grocery store, but also the financial viability of family farms across Canada, leading to fewer options for consumers and stifling the potential for innovation in the sector.

But there is a path forward. Though consolidation is difficult to reverse, there are steps policy makers can take today to begin the process. By pointing Canada’s recently reformed competition law at our food system, we can begin to unwind the costs of a decades long embrace of consolidation at the cost of not only consumers but those that work hard to put food on our tables.

On Monday October 28th, join CAMP and our international partners for a virtual talk on monopoly in the global food system and what can be done about it.

Big Banks Say ‘Trust Us’ on Open Banking

Back in September, we highlighted the importance of open banking for consumer empowerment in the market for consumer finance. But new developments show that the rollout of open banking might be more of the same: a chance for big banks to tighten their grip. The latest from The Logic explains how Symcor, a joint venture by three of Canada’s largest banks, is pushing for a big-bank driven approach to open banking.

Fintechs and consumer advocates are raising the alarm that this will reinforce the bank’s gatekeeper power and force new, innovative companies to compete on terms set by the banks themselves. As Andrew Spence argues in his new book, Fleeced: Canadians Versus Their Banks and in a recent piece for CAMP, big banks have long prioritized outsized profits over open competition, and the Symcor path to open banking is likely to follow that trend.

The promise of open banking was to provide consumers with more control over their financial data and to foster innovation by enabling fintechs to compete with traditional banks. But Symcor’s approach raises concerns that open banking will replicate the power of other big bank joint ventures like Interac, the payment network that has been the subject of multiple competition law cases over the years in Canada.

Banks need to be reminded that the financial information of Canadians belongs to the individuals who generate it. It’s crucial that policymakers ensure the open banking framework lives up to its promise of fostering competition and innovation, rather than entrenching existing power structures.

📚What We’re Reading📚

• Bordelon and Cancryn, Should Kamala Harris embrace Lina Khan? Democrats are split — and some worry it will cost her (Politico)
• Ahmari, Team Biden’s economic reformers deserve another four years – no matter who wins (New Statesman)

Luxury Monopolies Matter

Amid a cost of living crisis, a luxury handbag merger may not seem like a big deal, but not to Federal Trade Commission (FTC) Chair Lina Khan. This week, a U.S. judge sided with the FTC in blocking an $8.5 billion merger between Tapestry, the owner of Coach and Kate Spade, and Capri Holdings, which controls Michael Kors. The key takeaway? We need to care about consolidation in every sector—not just the ones that immediately impact our own wallets.

Monopolistic behavior in seemingly niche markets like “accessible luxury” may seem far removed from everyday concerns, but these markets matter. Though the companies were framed as purely luxury goods providers by pundits, competition between these firms affects price, quality and variety for goods enjoyed by a wide range of consumers. Consolidation begets consolidation, and if we accept it in markets we think don’t matter to us it’s only a matter of time before the effects hit closer to home.

When mergers like this are blocked, it sends a clear signal that no industry is exempt from scrutiny—even those that might seem less consequential to the average person. From necessary staples like food and shelter, to whatever else we choose to spend our money on, competition policy has a duty to protect fair and competitive markets.

If you have any monopoly tips or stories you’d like to share, drop us a line at hello@antimonopoly.ca

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