The rise and rise of private equity
The Lately podcast host, Vass Bednar speaks to someone who has brokered such private equity deals: Rachel Wasserman is a lawyer and former investment banker who left that world behind to become a researcher for the Canadian Anti-Monopoly Project. Her forthcoming paper is called The Private Equity Playbook: Understanding the Secretive Industry Hollowing Out the Canadian Economy.
Report | From Plow to Pantry: Monopoly in the Canadian Food System
Canadians bearing the increased cost of living are familiar with the lack of competition in retail grocery, where decades of consolidation have left only a handful of national firms. But the issue of monopoly extends beyond the grocery aisle and throughout the Canadian food system.
This report provides a landscape view of the competition problems across Canada's food system, from the seeds and fertilizers used by farmers all the way to the final products Canadians bring home to their kitchen table. At each link in the chain, corporate power has a hand in shaping the markets that producers rely on for their livelihood and consumers rely on to keep their families fed. As in other markets, decades of belief in the benign nature of corporate concentration has left participants with fewer options and more powerful gatekeepers to confront.
But a renewed focus on competition spurred by the cost of living crisis provides hope for a fairer and more democratic food system going forward. With new competition law tools and a broad anti-monopoly focus, Canadians can begin to turn the tide on monopoly in the food system.
You can read the full report here
Letters: The Fix is In
October 13, 2024Welcome 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:
Let's dive in.
Hearn and Bednar’s “The Big Fix” Points the Way Forward for Competition in CanadaIf there’s one topic on which CAMP is a broken record, it’s Canada’s monopoly problem. We see the consequences all around us. High prices, limited choice, low wages, reduced investment, the list goes on. Individual events like a disastrous bank merger removing a fierce mortgage competitor or telecoms hiking international roaming fees throw part of the picture into sharp relief, but we often miss the full scope of the monopoly drag on the Canadian economy. Enter The Big Fix, a new book from author, researcher, and thinker Denise Hearn and CAMP Advisory Board member and policy provocateur Vass Bednar. Packing much into a small package, The Big Fix provides a broad sweep of the range of monopoly issues from kayfabe competitors, the monopolies behind the generative AI boom and the shaping role that capital has in digging competitive moats. But the Big Fix is not simply a litany of woes stemming from Canada’s monopoly problem. Hearn and Bednar propose several steps that Canadians can take to turn the tide on corporate consolidation and its consequences. Without spoiling the ending, there’s much to be done at all levels of government and on behalf of individual citizens in creating a more democratic economy in Canada. It goes without saying that we at CAMP are big fans of the book and hope you’ll consider picking up a copy from your local bookstore. The Big Fix is available for pre-order now and in stores October 15th from independent Canadian publisher Sutherland House Books. 📰CAMP in the News📰Foreign Investment No Silver Bullet for Telecom CompetitionThis week, The Hub’s Sean Speer argued that attempts to engineer competition in Canada’s telecom sector through regulation have failed. The solution? Lift restrictions on foreign ownership, allowing foreign competitors to enter and shake up the market. This idea is popular with at least one other prominent Canadian, Telus CEO Darren Entwistle. Entwistle insists that opening the sector to foreign capital will lower prices and spur innovation. But why is an oligopoly telecom CEO pushing for more competition? Because it isn’t about competition, it’s about cementing dominance. Foreign firms can already enter Canada’s telecom market and exceed the 10% market share cap on foreign investment, but only through organic subscriber growth. Current ownership rules block foreign stakes in large incumbents precisely to prevent further consolidating market power in the sector. If Canada’s telecom giants were allowed to tap into vast pools of foreign capital, or even be acquired by a foreign player, they could reduce their cost of capital while keeping our familiar oligopoly structure untouched. Telecoms in Canada claim they are able to pass on the cost of regulatory actions to Canadian consumers, so it’s unlikely that they’ll decide to become charitable with cost savings without change to the level of competition in the market. Contrary to Speer’s claims, markets where regulatory actions have supported strong independent carriers like Sasktel or Shaw (RIP) deliver better outcomes for consumers. Rather than abandoning that work as Canadians reap the benefits, Canada needs instead to continue its work to create robust regulatory support for independent providers through spectrum set asides and wholesale access. Lowering barriers for new entrants, not loosening ownership rules for the big incumbents, is what will ultimately create a fairer, more competitive telecom market. Foreign ownership reform sounds like a silver bullet, but without structural changes that prioritize diverse ownership and market access, it risks entrenching the very monopolies Canadians are hoping to escape. 📚What We’re Reading📚
The Secret Ingredient is Crime: TD Bank Hit With Historic Money Laundering PenaltiesWhatever happened to Canada’s famously boring banks? This week, TD Bank was hit with a staggering $3 billion USD in fines and a cap on future growth from U.S. regulators after pleading guilty to conspiracy to commit money laundering. The fine, the largest penalty ever imposed on a bank for such offenses, comes after the bank admitted to facilitating money laundering for drug cartels and other criminal organizations, with employees ignoring or even joking about red flags. U.S. Attorney General Merrick Garland summed it up: “By making its services convenient for criminals, TD Bank became one.” The scandal raises questions about the arguments made in defense of Canada’s concentrated banking sector. As the second largest of the Big Five, TD holds an immense amount of power in the Canadian economy. With nearly 90% of the country’s banking controlled by just a few players, these financial institutions wield massive influence. That influence may explain why Canada’s own money-laundering regulator, FinTRAC, fined TD a measly $9 million for ostensibly the same conduct as the U.S. DOJ pursued. The penalties, which include an asset cap in the U.S. and restrictions on opening new branches, reveal the extent to which TD’s growth aspirations depended on high-risk, unchecked practices. The outcome is ironic given TD’s CEO spent years putting down the idea that independent FinTech competitors could be responsible stewards of the financial lives of Canadians. TD’s complacence when it comes to money laundering should put the entire Canadian banking system on notice. Greater scrutiny of Canada’s banking giants is just one step towards ensuring that their market power is not abused at the expense of consumers and to the benefit of criminals. If you have any monopoly tips or stories you'd like to share, drop us a line at hello@antimonopoly.ca |
CRTC calls for reeducation in roaming fees
Global News
Canada’s telecommunications regulator, the CRTC, is ordering Canada’s big three cellphone providers to lower international roaming fees. Keldon Bester of the Canadian Anti-Monopoly Project discusses what that means for consumers.
Letters: Fair and Balanced
October 6, 2024Welcome 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:
Let's dive in.
When Competition Fails: The Value of Public Monopolies in Auto InsuranceYou can’t say we aren’t fair and balanced. This week, CAMP fellow and economics PhD student Andrew Paulley has penned CAMP’s first pro-monopoly article. Diving deep into provincial auto insurance markets, Paulley looks to see if competition is working as advertised, and the results are surprising. Despite ten major insurance players in Ontario, drivers there pay the highest average premiums in the country. Right behind them is Alberta, with paradoxically fewer established players to choose from. Despite bucking Canada’s usual trend of oligopoly markets centered on a few players, Ontario’s fragmented insurance players have been able to move as a pack. When the government made tweaks that resulted in a 24% reduction in insurance claims, insurers kept the lion’s share of the savings and passed on a measly 2% to drivers in the form of lower premiums. Rather than calling for more competition to solve the problem, Paulley finds that the real solution is a public monopoly. Saskatchewan and Manitoba have had public auto insurance monopolies for decades, and Saskatchewan and Manitoba drivers save hundreds annually compared to their provincial counterparts. Findings from an Alberta government report found that a public insurance company could save drivers over $700 annually, but the government declined to embrace a public monopoly. These savings are possible because insurance programs have actual economies of scale that spread risk across a wider pool of drivers and a public monopoly means a lack of private shareholders allows savings to be passed back to drivers. Paulley’s work could not be more timely. This week, BC Conservatives claimed that, if elected, they would dismantle the province’s public auto insurance provider ICBC and let the market reign. But when it comes to essential services like auto insurance, the goal shouldn’t be competition for competition’s sake. Focus should instead be on how the system works and who benefits from it. Looking at the examples of Ontario and Alberta, if BC dismantles ICBC, the real winners will be private insurers, not drivers. Google Trials Come at a Pivotal Moment for Anti-Monopoly MovementWriting for the Centre for International Governance Innovation (CIGI), CAMP executive director Keldon Bester digs into the seismic ruling in the U.S. that declared Google a monopolist in the online search market. While the ruling is an important victory, it comes at a make-or-break moment for the global anti-monopoly movement. Judge Amit Mehta’s decision that Google’s 90% market share of the search market constitutes a monopoly with surprise few. But what happens next is far from obvious. Now that Mehta has deemed Google a monopolist, he must now select an appropriate remedy to the giant’s conduct. That remedy has the potential to reshape the global digital landscape for years to come, but it comes with serious risk. A solution that doesn’t go far enough in addressing Google’s power could represent years of wasted effort, snatching defeat from the jaws of victory. What we need now are structural changes breaking up core assets and breaking open markets to competition. Anything less would be a missed opportunity. The timing of the remedy trial overlapping with the U.S. presidential election also introduces serious uncertainty. Kamala Harris’ advisors are stacked with representatives of Silicon Valley giants and Donald Trump has largely backed away from the anti-corporate language that characterized his 2016 campaign. The battle against Google is as much a political battle as a legal one. An administration with a less assertive approach to Big Tech could easily back down, no matter the merits of the case. It was always an uphill battle, but the future path of the anti-monopoly movement may be a rockier one. 📚What We’re Reading📚
What’s Next for News in Canada Post-Online News Act?The Online News Act (ONA) was designed to rebalance the scales between Canadian news outlets and the tech giants—forcing companies like Meta and Google to fairly compensate publishers when their content is shared on these platforms. But as highlighted in a recent Columbia Journalism Review piece, the fallout has been anything but straightforward. Meta’s response was swift: they blocked news content on Canadian feeds, leaving readers cut off from trusted sources. While Facebook continues to be a hub for misinformation and political smear campaigns, legitimate journalism is being squeezed out. To adapt, outlets are turning to new platforms like TikTok or leaning heavily on email newsletters. But reaching new audiences remains a challenge. For smaller publications, particularly those serving Indigenous or remote communities, the loss of Facebook is critical. While Google has struck a deal for $100 million annually to be exempt from the ONA, the future of Canada’s news ecosystem remains grim. Canada is not alone in this predicament, Google recently threatened to pull out of New Zealand after the country moved forward on similar journalism support legislation, but we cannot rely on others to solve our problems for us. The ONA cannot be the last word on rebalancing power in the markets that make up the foundation of our democracy. If you have any monopoly tips or stories you'd like to share, drop us a line at hello@antimonopoly.ca |
Competition Bureau gets court order for probe into potential anti-competitive conduct by CREA
CBC
The bureau says its investigation is looking into whether CREA’s commission rules discourage buyers’ realtors from offering lower commission rates or whether they affect competition in other ways.