Buckle up for an activist Competition Bureau
The Globe & Mail
The bureau for decades was an afterthought. Today it is emboldened, bolstered by a forceful leader, a bigger budget and, most of all, stricter new rules. The bureau grounded its Cineplex case in the recently overhauled Competition Act, which features consumer-friendly changes that aim to better protect Canadians.
Letters: Food Monopolies
October 20, 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.
How Monopoly is Eating the Canadian Food SystemOut this week, CAMP’s latest report, From Plow to Pantry, shows how everything from seeds to supermarket shelves in Canada is in the iron grip of just a handful of companies. The report is the latest in our work highlighting the dangers of this unchecked corporate consolidation in every corner of the economy. Far beyond the checkout counter, at each step of the supply chain, starting from equipment, seeds, and fertilizers, large corporations wield significant power, leaving farmers and consumers with fewer options and higher costs. Canadians are already too familiar with the consequences in retail grocery, where decades of consolidation have made the marketplace less competitive. But our report shows the additional costs of consolidation, stifling innovation and squeezing out smaller players, making the food system vulnerable to supply disruptions and price gouging. The cost of living crisis has brought renewed attention to competition in the grocery sector, but Canadians need to go deeper to truly have a fairer food system. With a renewed focus on competition policy, there’s hope for change. CAMP has advocated for new tools and frameworks to challenge monopolistic practices and bring fairness back to the food system. By preventing further consolidation, enforcing stronger competition laws, and tackling unfair competitive practices, we can build a food system that serves everyone—not just the corporate giants. Private Equity's Bedside MannerAnother one of Canada’s storied financial institutions received a mark on its reputation this week. The Toronto Star broke that Orpea, a French operator of nursing homes had reportedly mistreated residents in its care homes across Europe before going bankrupt. The twist? Canada’s largest pension fund, CPP Investments had a major stake in the company. Unfortunately the Orpea is a microcosm of what happens when major investors and private equity get into the care business. A 2021 economic study showed that the rise in private equity in American nursing homes had led to lower standards of care and higher prices for residents. But this phenomenon isn’t limited to nursing homes. Across Canada, private equity firms have been quietly buying up retirement homes, veterinary clinics, and local dental practices. CAMP fellow and ex-private equity lawyer Rachel Wasserman has been studying these trends and warned on this week’s episode of the Globe and Mail’s Lately podcast that private equity’s focus on short-term profit is hollowing out important sectors of the economy. Wasserman will explore these trends in a forthcoming paper for CAMP, but in the meantime the podcast provides a great overview into the private equity playbook and its societal impact. 📚What We’re Reading📚
The FTC’s Click-to-Cancel CommonsenseThis week the U.S. Federal Trade Commission (FTC) introduced a new "click-to-cancel" rule designed to make canceling a service as easy as signing up for it. The rule is an important and obvious consumer protection win that Canada should emulate as soon as possible. Effective in 180 days, the rule will require companies to provide a simple, straightforward way for consumers to end their recurring subscriptions. Dark patterns and convoluted cancellation flows have long been a tool for companies to quietly extract more money from unsuspecting consumers. Negative option billing—where a subscription continues unless the consumer takes action to cancel—has been a thorn in the side of many, with complaints only increasing in recent years. The new FTC rule prohibits misleading practices and ensures consumers have a clear understanding of what they’re signing up for, and how they can get out of it. Canadian and American consumers both pay the cost of these exploitative practices, and without action up north Canadians are stuck calling in to a phone line that no one picks up if we ever hope to get out of the gym memberships we haven’t been using. This new rule is not just about convenience; it’s about commonsense. By making it easier to cancel unwanted subscriptions, the FTC is striking a blow against private regulation by corporations that says canceling a service should be a headache. CAMP will continue to push for similar protections because Canadians deserve a market that respects their choices and values their time. If you have any monopoly tips or stories you'd like to share, drop us a line at hello@antimonopoly.ca |
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.