July 28, 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:

• The Balanced Economy Project shows how corporate break ups can help restore competition
• Grocery giant Loblaw settles bread price fixing class actions but Competition Bureau investigation continues
• Competition Bureau investigates potential algorithmic collusion in Canadian retail gas markets

Let’s dive in.

The Growing Global Push to Dismantle Corporate Giants

A fascinating new report from our friends at the Balanced Economy Project (BEP) makes a compelling case for breaking up dominant firms that have come to characterize our economies. From Standard Oil to IG Farben to AT&T, history shows us that breakups can be a powerful tool for protecting democracy and fostering economic dynamism. In the report, BEP outlines this history while answering important questions about the feasibility and kinds of benefits that can result from corporate breakups.

Canada may not be ready to break up our domestic giants yet, but we’ve taken important steps to prevent them from growing larger. By modernizing our competition law with stronger safeguards against consolidation and empowering individual companies to fight back against monopolists, there’s been a sea change in our approach to concentrated corporate power. While the reforms have been critical, their effectiveness comes down to assertive enforcement. While next year may bring a change in government, it’s worth remembering that stronger competition law has garnered cross party support.

Regulators in the U.S. have been showing what kind of positive impact stronger enforcement of even imperfect laws can have on the economy, and the powers that be are reacting accordingly. In the wake of Joe Biden, the strongest president on competition policy in living memory, pulling out of the presidential race, powerful donors see an opportunity to change direction on antitrust. Billionaires Barry Diller and Reid Hoffman have publicly expressed their hope that potential presidential nominee Kamala Harris would give Federal Trade Commission (FTC) Chair Lina Khan the boot if elected.

Major strides have been made globally in the fight against concentrated corporate power, and the fight continues as entrenched incumbents push back against this progress. Anti-monopolists should celebrate our wins, but we cannot afford to rest on our laurels.

Loblaw Settles Bread Price-Fixing Class Actions

Loblaw and its parent company George Weston have agreed to pay $500 million to settle two class-action lawsuits over their role in the great Canadian bread price-fixing scandal. While a major class action win, it’s worth noting that estimates of the harm caused to consumers by the cartel conduct are estimated north of $5 billion over its 15 year run.

The class action win is also a reminder that after more than six years since it was announced, the Competition Bureau’s original investigation into the grocery giant’s is still ongoing. If an investigation into a cartel where a leading player comes forward with information takes this long to resolve, how long will it take to prosecute a major cartel where none of its participants cooperate with authorities?

Canadians deserve transparency into why it is taking so long for justice to be served in one of the country’s most monumental competition cases, and rapid resolution of these harmful cases going forward.

The Line Between Data-Driven and Collusion

This week the Competition Bureau announced it had obtained a court order to advance an investigation into data analytics firm Kalibrate’s services for the retail gas industry. Kalibrate provides guidance to gas station operators on how they should price their products by giving them a window into the pricing behaviour of their competitors.

Sounds helpful to gas stations, but the Bureau is concerned that these services may be a little too helpful. Similar to the Agri Stats case in agriculture markets in the United States, the Bureau is concerned that the exchange of information is dampening competition between market participants by facilitating coordination. The investigation highlights a growing challenge in competition policy, how to ensure that data-driven tools don’t become a smokescreen for plain old price fixing.

In our submission to the enforcer’s consultation on AI and competition, CAMP called on the Bureau to investigate the potential for algorithmic decision-making to facilitate collusion. The Kalibrate investigation is a welcome sign that the Bureau is taking that potential seriously.

If you have any monopoly tips or stories you’d like to share, drop us a line at hello@antimonopoly.ca

Follow CAMP on Twitter LinkedIn Instagram or Facebook​