Addressing corporate concentration | Event Recap
Leading voices in economics and public policy, the discussion on corporate concentration was led by Robin Shaban, Associate Partner at Deetken and co-founder of the Canadian Anti-Monopoly Project, and Matthew Holmes, Senior Vice President of Policy & Government Relations for the Canadian Chamber of Commerce, with moderation by School director Chris Ragan.
Letters: Competition Reform Home Stretch
April 14, 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.
CAMP Calls on MPs to Bring Home Competition ReformIn a statement this week to the House Finance Committee, CAMP Executive Director Keldon Bester voiced support for the ambitious reform of Canada’s competition law proposed in Bill C-59. While C-59 makes important improvements to Canada’s competition law, CAMP highlighted the ability of individual companies to bring cases against competitive harms and inclusion of effects on workers in analysis of harmful mergers as particularly meaningful changes. C-59 represents a generational change in Canada’s competition law, but room for improvement remains. Looking beyond C-59, CAMP put forward presumptions against mergers in already concentrated markets and more powerful remedies against harmful mergers as areas for future reform consideration. As with C-56, competition reform enjoys cross party support, with both Conservative, NDP and Bloc Québécois members pushing for a stronger response to complement reforms proposed by the Liberals. With public frustration mounting over the cost of living in Canada, CAMP continues to push for laws that effectively police monopolies and promote a healthier business environment for all. As the legislative review continues, CAMP remains hopeful that Parliament will follow through on these calls for more competition in Canada. UK Watchdog Homes in on AI Model MonopolizationThe UK's Competition and Markets Authority (CMA) has raised alarms about the rapidly consolidating market for foundation models that power modern artificial intelligence systems. In a stark warning, the regulator pointed to a handful of deep-pocketed tech giants rapidly cornering this critical segment. Foundation models are the large language and computer vision models that form the basis for AI applications like chatbots, content filters, and automation tools. Monopolization risks limiting innovation and consumer choice as cash-strapped startups struggle to access and train competing models. In response to these concerns, the CMA outlined potential interventions such as pooling data resources to level the playing field and requiring dominant players to license their models on fair terms. With AI positioned as a key economic battleground, the watchdog aims to promote conditions for an fair and open AI ecosystem that benefits businesses and citizens alike. Provinces Push Back Against Pharmacy Lockdown DealsA growing number of provincial pharmacist regulators are signaling their discomfort with the spread of exclusive deals between insurance providers and corporate pharmacy chains. These "preferred provider network" (PPN) arrangements restrict patients to using designated pharmacies to get their prescription drug coverage. The backlash intensified after Manulife, Canada's largest insurer, attempted to sign an exclusive PPN deal with Shoppers Drug Mart before walking it back amid public outcry. By restricting patient choice, regulators worry PPNs put business interests ahead of patient choice and quality care. While some provinces cited limits on their authority to regulate insurers, the chorus of criticism from pharmacy watchdogs underscores the high-stakes battle over customer captivity in Canada's drug supply chain. As more companies explore lucrative PPN arrangements, provinces must move to safeguard patients' freedom to choose their pharmacists. European Anti-Monopoly Groups Lay Out Vision to Curb Corporate DominanceAn audacious new report has delivered a clarion call for the European Union to get serious about tackling concentrated corporate power across its economic sphere. The "Rebalancing Europe" manifesto, backed by an array of civil society groups, lays bare the existential threats posed by monopolistic forces. From Big Tech's subversion of democracy to concentrated supply chains that imperil strategic autonomy, the report details how Europe is beset by excessive private dominance. To reverse this state of affairs, the manifesto advocates for revamping competition policies and expanding the definition of harms over narrow consumer welfare standards. Specific proposals included granting regulators new industry-wide investigation powers, deploying tougher merger blocking and breakup orders and amplifying voices of consumer advocates in enforcement cases. With EU elections looming, the report represents a full-throated demand for trust-busting to be a keystone of the next Commission's agenda. If you have any monopoly tips or stories you'd like to share, drop us a line at hello@antimonopoly.ca |
CAMP Opening Statement to the House Standing Committee on Finance (FINA) on the Study of Bill C-59
Thank you to the committee for inviting me to speak today on this important piece of legislation.
My name is Keldon Bester and I’m the Executive Director of CAMP, a think tank dedicated to addressing the harm caused by monopoly and building a more democratic economy. We appreciate the opportunity to return to this committee to discuss improvements to Canada’s competition law contained in C-59.
Of the changes to the Competition Act included in C-59, I want to focus my opening statement on two areas – the opening of the Act to private access and its improvements to the merger enforcement framework.
Today, in contrast to the United States where individual companies can bring cases against corporations harming competition, in Canada nearly all competition law cases originate from the Competition Bureau. Despite its best efforts, the Competition Bureau has finite resources and cannot have eyes on every corner of Canada’s $2 trillion economy. A more decentralized competition law framework is more likely to address harms to competition, especially those affecting small and medium-sized businesses.
Accordingly, a robust private access framework is an important complement to the expert work of the Competition Bureau and C-59 creates the foundation for this by expanding private access to the Competition Act and allowing companies to seek damages for the harm caused by that anticompetitive conduct.
Shifting to merger enforcement, today the Competition Act downplays the role that market structure, the number and size of players in a market, plays in competition. By removing language that rejects market structure as an indicator of competitive harm and adding increases in concentration as a factor in evaluating a merger, C-59 gives our competition law a better defense against mergers in markets where Canadians already face limited choices.
C-59 also addresses a gap in Canada’s law that excludes a core component of our economy from analysis of mergers. Though we often talk about the benefits of competition to consumers, Canadians benefit from a more competitive economy not just as consumers, but as entrepreneurs and workers as well. While competition law has long considered the cost of consolidation on consumers and businesses it has been largely silent on the potential effects on workers.
Thankfully this is changing. It is changing at home with the recent inclusion of wage-fixing and no-poach agreements under Canada’s competition law and it's changing abroad with the inclusion of effects on workers in the U.S. Federal Trade Commission’s recent complaint against the proposed Kroger-Albertson's grocery merger.
C-59 is another positive step in this direction. By including effects on workers as a factor for merger review, C-59 gives our competition law a more complete view of the costs of consolidation to Canadians.
In addition to these changes, this committee should consider the ways in which C-59 could go further to protect Canadians who already face limited choice in important markets.
When a market is highly concentrated, further consolidation is more likely to harm competition at the cost of Canadian consumers, workers and entrepreneurs. Recognizing this, a bias against mergers in markets with few players, often referred to as a structural presumption, should be incorporated into Canada’s competition law. With structural presumptions, merging parties must work harder to prove a merger in an already concentrated market will benefit Canadians. These presumptions can intensify as a market becomes more concentrated, banning them outright where a single firm dominates a market.
As others have pointed out, Canada’s current competition law has repeatedly allowed mergers to near- or literal monopoly, killing competition and choice for Canadians. This is a consequence of competition law that does not take market structure seriously, a trend that C-59 provides an opportunity to break with.
C-59 is an important component of comprehensive reform to the law that Canadians depend on to protect competition and affordability in all sectors of the economy, and this committee has the chance to strengthen these reforms to truly protect competition and Canadians.
Thank you for your time today and I look forward to your questions.
Letters: Banking on Monopoly
April 7, 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.
A Blueprint for More Banking CompetitionCanada's banking sector desperately needs more competition to benefit consumers. The current cozy marketplace allows big banks to raise profits through higher fees and less generous interest rates rather than innovating. On the fee side of the house, Canadians pay some of the world's highest banking fees at $694 per household annually. That’s a high price to just to keep our hard-earned savings safe. A major roadblock is Canada's outdated financial infrastructure and regulations that protect incumbent advantages in the name of stability. Simple processes like account transfers still require manual faxes and mail, deterring customers from switching institutions. Unlike other G7 nations, Canadian payments don't settle in real-time, allowing banks to collect interest during delays. Regulatory uncertainty from split federal and provincial overseers, none of which include a mandate for competition, means no single body is empowered or accountable to make anti-monopoly reforms. To turn the tide on competition in the banking space, CAMP and Fintechs Canada collaborated on a blueprint for a more competitive banking market. Pushing back on the idea that competition and stability must be traded off, the report recommends giving Canada’s banking regulators a mandate to promote competition, make it easier for new entrants to enter the banking and payments space, and tighten controls on mergers to avoid another RBC-HSBC Canada. Delivering a truly competitive banking system requires balancing prudential oversight with a commitment to greater competition, and we believe Canada’s regulators are up to the task. But the process will not be easy, as Canada’s banks have a vested interest in protecting the world-leading profits they generate each quarter. Only sustained political will can overcome gatekeeper resistance to open up Canada's ossified banking sector. Google Punishes Indie Publishers“We shouldn’t live in a world where only a few major companies dominate the entire search online ecosystem; Google needs to become a fairer search engine without bias,” wrote Retro Dodo founder Brandon Saltalamacchia in a post this week outlining how small independent publishers with original, human-written editorial content are being punished by Google and pushed down its all-important traffic-driving page ranking algorithm. The post is another desperate plea to Google from outlets which struggle to divine the vague and often contradictory instructions to win the favour of Google’s algorithm and gain access to the eyeballs that keep them in business. With the quick adoption of AI-powered summaries in search results and now AI-generated content indexed in Google’s previously robust book queries, indie publishers are facing an uphill battle to stay in front of audiences on the venerable web crawling platform. The challenges faced by independent publishers like Retro Dodo are not unique to their website. Many small content creators and publishers are struggling to maintain their visibility on Google's search results pages. The dominance of major companies in the search ecosystem has created an uneven playing field, where smaller websites are at a significant disadvantage. This lack of diversity in search results is leading to a less vibrant and less informative online experience for users, who miss out on valuable content from independent sources. The responsibility for a more vibrant landscape falls on regulators, competitors and individual internet users. Regulators need to implement policies that encourage competition and address abuses of dominant market positions that allow corporations to erect moats around the free and open internet. At the same time, competitors like DuckDuckGo, Bing, or Ecosia need to offer alternatives that reward indie publishers and quality human-generated content. With these alternatives available and monopolistic practices kept in check, users will be free to migrate and reward the efforts of search engines with higher quality information. Through a concerted effort from all stakeholders, we can ensure that the internet remains truly free and open, where independent publishers like Retro Dodo have a fair chance to reach their audience and contribute to the wealth of information available on the web. Censorious Apple Tried to Keep Down KhanOn an episode of The Daily Show last week, host Jon Stewart welcomed Lina Khan, the chair of the Federal Trade Commission (FTC), as a guest. Khan, known for her tough stance against corporate monopolies and her efforts to promote fair competition, discussed the FTC's ongoing work to address anticompetitive practices in the tech industry and other sectors. During the interview, Stewart made a surprising revelation about his former show, The Problem with Jon Stewart, which aired on Apple TV+. He disclosed that Apple had previously asked him not to invite Khan as a guest on his show. "They literally said, 'Please don't talk to her,” Stewart shared with the audience. This revelation highlighted the influence that large tech companies like Apple can and do wield over the free flow of information even in the internet age. Throughout the interview, Khan emphasized the crucial role of the FTC in preventing the concentration of power and decision-making in the hands of a few dominant companies. She stressed the importance of maintaining a fair marketplace for businesses and protecting consumers from the potential harms that can arise from corporate monopolies. Though Apple’s censorship highlights the dangers of concentrated media markets, the interview also revealed how brittle these censorship efforts can be when individuals are willing to speak out against them. The Agenda Goes to CAMPThis week, CAMP Executive Director Keldon Bester appeared on TVO’s The Agenda to discuss the growing problem of greenwashing. Referring to the deceptive practice of representing a product or service as environmentally friendly, greenwashing is a growing problem as more consumers take their impact on the environment seriously. The show’s panel explored why companies greenwash, the challenges of regulating the practice, and potential solutions to the growing issue. As environmental impact becomes more important to consumers, some companies prioritize appearing sustainable over actually implementing sustainable practices. This deceptive behavior makes it difficult for consumers to make informed choices in a marketplace where information to back up sustainability claims is not available. Panel members acknowledged the challenges of addressing greenwashing, including challenges to claims about entire businesses or brands rather than specific products. But the show explored potential solutions, including proposed amendments to the Competition Act that would specifically target greenwashing. While some experts believe that this is a positive step, others argued that more comprehensive measures are needed to effectively combat greenwashing. If you have any monopoly tips or stories you'd like to share, drop us a line at hello@antimonopoly.ca |
Fintechs Canada, CAMP draw up blueprint to make banking more competitive
Fintechs Canada
Fintechs Canada and CAMP note that other jurisdictions, such as the United Kingdom, Australia, and the United States, better empower their regulators to promote competition in the financial sector.
CAMP, Fintechs Canada draw up blueprint for a more competitive banking sector
To strengthen competition in Canada's financial sector, the federal government must implement consumer-driven banking and then think bigger, according to a report by Fintechs Canada and the Canadian Anti-Monopoly Project (CAMP). The two organizations recently collaborated to produce a joint submission to the Department of Finance's consultation on strengthening competition in the financial sector.
"False is the idea that there is always a trade-off between financial sector stability and competition... The major reason that financial crises have not materialized in Canada is Canada’s approach to supervising financial institutions, not deliberate choices by the government to suppress competition."
Covering a wide range of policy tools, the report recommends
- Giving financial sector regulators mandates to promote competition
- Creating a college of regulators to improve regulatory coordination and harmonization
- Modernizing Canada's approach to granting bank licenses
- Expanding access to and promoting fair and level pricing of critical payments infrastructure
- Completing the implementation of consumer-driven banking
- Strengthening merger control in the banking sector, and
- Regularly reviewing the state of competition in the financial sector
"We believe Canada needs a long-range, comprehensive policy agenda— constituting a whole-of-government approach—to promoting competition in the financial sector without compromising its stability," the report concludes.
CAMP is a think tank dedicated to addressing the issues caused by monopoly power in Canada. CAMP produces research and advocates for policy proposals to make Canada’s economy more fair, free, and democratic.
Fintechs Canada is an industry association of Canada's most innovative financial technology companies. Collectively serving millions of Canadians on a daily basis, the association's membership includes Canada's fintech market leaders, global fintech companies, fintech-friendly financial institutions, and the technology companies that power the credit union space, among others.
Click here to read the full report.