Letters from CAMP

Letters: Bad to Worse on Bunge-Viterra

May 5, 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:

  • University of Saskatchewan researchers find a much higher price tag for Bunge-Viterra
  • Poilievre calls out big business lobbyists for ignoring everyday Canadians
  • Closing arguments heard in U.S. Google search monopolization case

Let’s dive in.

Grain Drain: Researchers Find Bunge-Viterra Could Cost Canadian Farmers $700 million

Last week we covered the Competition Bureau’s opposition to the Bunge-Viterra takeover, where the Bureau estimated that the transaction could cost Canadian farmers $20 million annually. This week, a comprehensive report from professors at the University of Saskatchewan provides analysis that paints a much starker picture of the potential financial implications for farmers.

The report estimates that the merger could cost grain farmers over $700 million annually, an order of magnitude higher than the Bureau’s estimates. The study also highlights the potential impact on individual farmers, suggesting that Western Canadian wheat growers could see their annual income drop by thousands due to higher margins extracted by the merged agricultural giant. Similarly, a canola farmer in Saskatchewan might lose tens of thousands of dollars annually as higher costs are compounded by the risk that plans for a new local processing facility are scrapped.

This transfer of wealth from farmers to the merged agricultural giant would make it harder for those farmers to invest in their operations, support their families, and contribute to their local economies. The report finds that a merged Bunge-Viterra would handle over 40% of Western Canada’s grain, leading to market power imbalances and reduced bargaining power for farmers.

As regulators continue to scrutinize the proposed merger, the report provides a data-driven foundation for assessing the potential consequences for individual farmers and the agricultural industry as a whole.

Poilievre Says Ottawa Bubble Must Win Over Main Street

Conservative party leader Pierre Poilievre penned an op-ed this week urging corporate Canada to stop relying on lobbyists and instead focus on winning public support for their policy proposals. Poilievre’s call comes as domestic big business lobby groups argue that Canadian policy makers should abandon efforts to bring home meaningful competition law reform despite clear support for a harder line against monopolies amid the rising cost of living.

The message is particularly well-timed as the effort to quash Canada’s competition revival becomes increasingly international. This week the Information Technology and Innovation Foundation (ITIF), an American think tank funded by some of the largest corporations on the planet, launched its Center for Canadian Innovation and Competitiveness. ITIF has been a staunch opponent of ramped up antitrust enforcement in the U.S. and has attempted to push back on recent Canadian efforts to strengthen our weak competition laws.

To truly benefit workers, consumers, and entrepreneurs, Canada needs a policy agenda that addresses the growing concentrations of economic power stifling the dynamism of our economy. This means promoting fair competition, reducing barriers to entry, and ensuring that public policy is guided by the interest of the public, not dominant players.

Poilievre’s call for businesses to engage directly with the public is a step in the right direction, but it must be accompanied by a commitment to fostering a more dynamic and competitive economy. Only this kind of economy can ensure that its benefits are shared widely and that every Canadian has the opportunity to succeed that they deserve.

Judge Hears Closing Arguments in Google Search Case

The U.S. Department of Justice (DOJ) and Google’s legal team faced off in a final showdown this week, presenting starkly different narratives in the closing arguments of the antitrust case targeting the tech giant’s dominance in the market for online search.

The DOJ, which filed the case back in 2020, argues that Google illegally abused its monopoly power to maintain its grip on the market and stifle competition. With an 89% market share in general search as of 2020, the government contends that Google has preserved its dominance through exclusive distribution agreements with device makers, carriers, and Apple, relying on the “power of defaults” to keep users locked into its ecosystem. The DOJ claims these practices have deprived rivals of the scale necessary to compete effectively, reduced Google’s incentive to innovate, and ultimately resulted in slower, less accurate search results and higher advertising prices for users.

Google, unsurprisingly, painted a very different picture in its closing arguments. The company maintains that it faces robust competition from a wide array of online rivals beyond just traditional search engines, that any barriers to entry are insignificant, and that its agreements and conduct are justified by legitimate business reasons that benefit consumers.

The outcome of this case will have far-reaching implications not just for Google, but for the future of competition in the digital economy. For advocates of fair and competitive marketplaces, the stakes couldn’t be higher as we await Judge Mehta’s decision in the coming months.

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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