January 26, 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:

• Statistics Canada study finds rising margins and market power over the past 20 years
• Amazon shuts down all Quebec warehouses after workers push for a fair deal and safe working conditions
• Big Tech’s center-stage presence at Trump inauguration bodes ill for corporate pushback

Now let’s dive in.

StatsCan Finds Steady Rise in Markups and Market Power

One of the factors we look for to detect the presence of monopoly power is high and rising markups: the price corporations can charge above the cost of the goods and services they sell. This week, new analysis from Statistics Canada found more evidence of what we’ve been saying all along: monopoly markups are on the rise. Depending on the measurement method, average markups in Canada have increased by 5% - 13% since 2001, with the sharpest growth occurring after the 2008 recession.

The report highlights that this rise has been accompanied by fewer new firms entering the market and increased concentration of market power among dominant players. The average markup—a measure of how much firms charge above their costs—has steadily risen, placing a growing burden on consumers.

What’s striking is that companies have been passing these increases onto consumers well before inflation became a headline issue. While Canada maintained a weak approach to competition, incumbent firms were able to squeeze more out of Canadians. Contrary to economic theory, these increasing margins did not lead to a rush of new competitors. Instead, fewer and fewer firms are challenging the position of dominant firms. As debates heat up about how to respond to the threat of tariffs, this analysis reminds us that we cannot fix our position on the global stage without tackling entrenched market power at home.

📚 What We’re Reading 📚

• Harris, More underweighted meat uncovered as big grocers hit with class action lawsuit (CBC)
• Lowman et al., Tools for Reining in Monopoly Utilities (AELP)
• Ball, The State of Video Gaming in 2025 (Epyllion)

Big Tech Doesn’t Love You Back: Amazon Exits Quebec Following Worker Organizing

This week, Amazon announced it would be closing all seven of its Quebec facilities, cutting nearly 2,000 jobs. Officially, the company cited “a review of its Quebec operations” that found it could better serve customers with third party delivery services. But the real reason is to send a clear signal to Canadian workers: organize for better working conditions at your own risk. Quebec is home to Amazon’s only unionized workforce in Canada, with workers organizing in response to concerns over unsafe conditions, low pay, and grueling schedules.

Amazon’s retreat shows the lengths the largest corporations will go to avoid a fair deal for workers. Evidence from other countries shows us why Quebec workers were right to organize for better conditions. Studies show Amazon warehouses have injury rates more than double comparable warehouses and that local warehouse wages fall once Amazon comes to town and starts exerting pressure. This occurs while Amazon extracts an ever-growing share of revenue from third party sellers who make use of their platform.

In response to the closure, Industry Minister François-Philippe Champagne has called for a review of the federal government’s business relationships with Amazon, which account for tens of millions of dollars of revenue annually. But until we address the monopoly power at the heart of this dispute we should expect the future of Canadian workers to be hostage to the whims of tech giants.

📰 CAMP in the News 📰

• Annable and Barghout, Contractors accused of rigging Manitoba Housing bids after years-long investigation want charges stayed (CBC)

Big Tech Buys a Seat at Trump’s Inauguration

“After years of pretending to be Democrats, Big Tech leaders are now pretending to be Republicans,” tweeted Epic Games CEO Tim Sweeney. This sharp critique captures the dramatic shift in political strategy represented by Jeff Bezos, Mark Zuckerberg, and Sundar Pichai’s front and center placement at Trump’s inauguration. Big Tech’s sudden love affair with the incoming administration, including million dollar contributions to Trump’s inaugural fund, is a clear attempt to sway the president away from his previous antipathy for Big Tech and strike deals that would allow them to escape ongoing antitrust scrutiny.

Before their about-face on the issue, Big Tech were the loudest champions of the diversity, equity, and inclusion (DEI) and environmental, social, and governance (ESG) initiatives that have come under scrutiny by Republicans, with some companies even using them in an attempt to justify controversial mergers. At the time, the Federal Trade Commission (FTC) under former Chair Lina Khan correctly pushed back against such tactics, signaling that such commitments could not be a shield for anticompetitive practices.

The ongoing 180 is a stark reminder of why the task must always be to decentralize power within an economy rather than hoping it can be a tool for political goals on either side of the aisle. While political winds may have changed, the power these companies have over our communication, commercial, and social networks is as dangerous today as it was during the previous administration. While we continue to see reasons for optimism in the future of U.S. antitrust, Big Tech’s central role at the inauguration is a discouraging signal.

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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January 19, 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:

• Competition Bureau breaks Sobeys grocery grip on the residents of Crowsnest Pass
• Government approves Bunge-Viterra agribusiness deal at the expense of farmers
• Rogers tops the charts as Canada’s most complained-about telecom

Now let’s dive in.

Canadian Community Freed from Grocery Gatekeepers

Crowsnest Pass, a community of just under six thousand Canadians on the border between British Columbia and Alberta, is home to one grocery store. Until today, you could be forgiven for thinking that the reason for this situation is that a community of that size can only support one grocery store. But we now know that isn’t the case.

In a narrow but important win for competition, the Competition Bureau has successfully forced Sobeys to relinquish a property control that had prevented a second grocery store from opening in the municipality, spelling the end of a seven-year stranglehold by the grocer. For Crowsnest Pass residents, this brings not only the potential for lower prices and greater variety in the grocery aisle, but also the freedom to start and grow businesses that serve their community.

Property controls like these are just one of the many anti-competitive tactics used by dominant players to restrict economic freedom and keep competition at bay. Harmful anywhere in the country, these restrictions are particularly insidious in remote communities where a property control could put the next closest competition an hours-long drive away.

While an important step towards a fairer deal for the people of Crowsnest Pass, grocers engage in these practices across the country. As the Bureau’s investigation into Sobeys and Loblaw’s use of property controls continues, Canadians cannot be asked to settle for piecemeal wins in only the most extreme monopoly situations. What worked in Crowsnest Pass will work across the nation, and a nationwide response is necessary to turn the tide in favour of consumers. This is a good start, but it’s time to unleash real competition in the grocery industry.

📚 What We’re Reading 📚

• ​Wider Benefits of Competition Policy and Enforcement (Competition and Markets Authority)
• Lately, The End of the Fixed Price (Globe and Mail)
• Dee-Ann Durbin, US lawsuit accuses PepsiCo of price discrimination that favored Walmart over smaller stores (AP News)

Government Gives Bunge-Viterra the Green Light and Farmers Foot the Bill

The federal government’s approval of Bunge’s $8 billion takeover of Viterra this week has sparked outrage among prairie producers and competition advocates alike. While Ottawa touts its “extensive terms and conditions” to protect competition, the deal hands even more control over Canada’s critical grain supply chain to a single multinational agribusiness giant​​.

One particularly alarming aspect of the deal is the potential fallout at the Port of Vancouver, where the Bunge-Viterra deal means more intense consolidation that could choke off competition for grain export capacity. As Canada’s largest gateway for grain, the port’s efficiency and accessibility are essential for farmers to get their crops to global markets. With fewer companies dominating the port’s logistics and crush facilities, farmers face reduced transparency, diminished bargaining power, and higher costs to move their products​​.

Researchers estimate that the deal could cost producers billions in lost revenue, with ripple effects across the entire agricultural economy. If Canada wants to protect its farmers and ensure fair market access, we need to change how we think about consolidation. This is the case not just for agriculture, but for every sector where monopolies are deepening their roots.

📰 CAMP in the News 📰

• Editorial Board, Another merger, another drop in competition (Globe and Mail)

Rogers: Canada’s Complaints Champion

If frustrating customers were a sport, Rogers would lead the league. According to the latest report from the Commission for Complaints for Telecom-Television Services (CCTS), Rogers received 24% of all complaints during the 2023–24 reporting period—a staggering 68% increase from the previous year. The top issues included incorrect charges, unresolved credits, and, worst of all, a 447% spike in complaints about regular price hikes​.

This avalanche of complaints comes as no surprise to anyone following the aftermath of the Rogers-Shaw merger, which CAMP staunchly opposed. At the time, we warned that less competition would lead to higher prices and worse service for all consumers. The CCTS report shows that these fears were well-founded. Billing complaints—the most common gripe—rose by 52% across all telecom providers, with Rogers leading the pack. This isn’t just an issue of bad service; it’s a reflection of what happens when competition doesn’t keep companies in check.

Rogers has pointed to “increased public awareness” of the CCTS as one reason for the spike in complaints, but the numbers paint a different picture. The merger gave Rogers even more market power, enabling the company to lower the quality of support with minimal fear of losing customers to competitors. With fewer choices and rising costs, Canadian consumers are left with the bill—literally.

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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January 12, 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:

• CBC investigation uncovers major grocers consistently deceiving customers on product weight
• Survey finds that Canada’s largest voting bloc supports public interest regulation of business
• Meta’s fact checking 180 shows the need for anti-monopoly internet policy

Now let’s dive in.

Canadian Grocers Torch Trust by Underweighting Products

By now we’re betting that every reader of this newsletter has experienced comparing the cost of groceries, often using standardized pricing by weight to understand which product is the best deal. But what if those weights were wrong, and consistently wrong at the expense of shoppers?

That’s what the CBC discovered when the results of an investigation showed that products in the grocery store consistently weigh less than the label claims. That means Canada’s largest grocery chains—Loblaw, Sobeys, and Walmart—have been selling underweighted meat, potentially pocketing millions in extra profit at consumers’ expense.

How does it work? According to federal regulations, the net weight of packaged food must exclude packaging materials, ensuring you get what you pay for. Yet in cases uncovered by the CBC, meat was weighed alongside plastic trays or incorrectly labeled, shorting customers by up to 11% per item. Loblaw admitted to selling mislabeled meat across 80 stores due to a “packaging error,” but assured reporters that this was an isolated incident. But what good do these corporate-speak responses do for Canadians? Months after Loblaw claimed to have fixed the issue, CBC still found mislabeled meat at multiple locations.

This kind of shortchanging of customers is the absolute baseline for consumer protection regulation. To ensure a stop is put to these widespread “isolated” incidents, the Competition Bureau must act decisively and launch deceptive marketing investigations against the major grocers weighting practices. As Canadians continue to struggle under the weight of food inflation, every gram counts.

Public Interest Regulation Cuts Across Cultural Lines in Canada

At CAMP, we are constantly curious about what different groups of Canadians think about monopoly, and a recent survey has shed some encouraging light on the topic. Conducted by Abacus Data, the wide-ranging survey canvassed a wide swath of Canadians and attempts to sort them ideologically across progressive and conservative lines on the categories of economic and cultural issues. The most interesting finding from our perspective? That support for public interest regulation is shared by cultural conservatives and progressives in Canada, the largest voting bloc responding to the survey.

Of these 41% of Canadians, the vast majority of them agree with the statement “government regulation of business is necessary to protect the public interest.” The next largest group, the 32% of Canadians that consider themselves economically and culturally mixed, also understand the need for government intervention but are less decisive about their support. While less than half of the 23% of Canadians that consider themselves economic conservatives agree with the same statement, it’s hard to imagine that hesitance extends to regulations that ensure Canadians actually get what they pay for at the grocery checkout.

Support for regulation across cultural divides parallels the cross-parliament support for stronger competition laws that saw all parties vote in favour of strengthening the Competition Act in 2023 and again in 2024. At the risk of confirming our own bias, as issues emerge as hinge points for an upcoming election, one thing Canadians of different stripes appear to agree on is the need for a strong stance for the public interest and against the monopolies that dominate our economy.

📚 What We’re Reading 📚

• Goose Media, Can We Solve Canada’s Monopoly Problem? (YouTube)
• Claire Kelloway, America needs a real challenger to corporate greed, not conspiracy-riddled RFK Jr. (The Hill)
• Ben Casselman, Economists Are in the Wilderness. Can They Find a Way Back to Influence? (New York Times)

Zuckerberg’s Fact-Check Flip: Why Anti-Monopoly is the Surest Path to a Healthy Internet

This week, Meta announced it is scrapping its third fact-checking program in favor of a crowdsourced “community notes” system much like the one in place on the Elon Musk-owned X platform, formerly Twitter. CEO Mark Zuckerberg framed the move as restoring free expression to the platform, but critics argue that the move, along with the elevation of executive Joel Kaplan and appointing of UFC CEO Dana White to Meta’s board, is a nod to appease the incoming Trump administration nod.

These fact-checking programs were never a silver bullet for the thorny issue of balancing online safety with free expression, but the 180 reminds us why an anti-monopoly approach to online platforms is so important. As FTC Chair Lina Khan aptly noted in her exit interview with CNBC, “an economy where decisions by a single executive dictate speech rules is at odds with competition laws,” and we might add to the idea of a free and democratic society.

Meta’s history of suppressing content post-January 6 before abruptly shifting policies to curry favor with changing political winds underscores the dangers of centralized power in the global economy. This isn’t about free expression; it’s about control—control of information, markets, and political influence. While one political faction may see this change as a win today, it was not their choice to make, and powerful companies will continue to morph to fit those they wish to curry favour with. A truly democratic society means breaking the concentrated power of individual companies and returning it to the citizens themselves.

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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