Letters from CAMP

Letters: Bunge-Viterra is Bad News for Farmers

April 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:

  • Bureau comes out against Bunge-Viterra, Transport Minister holds final call
  • Biden admin antitrust expert Tim Wu weighs in on Canada’s competition crisis
  • U.S. FTC moves to ban non-competes that limit worker mobility

Let’s dive in.

CAMP Welcomes Competition Bureau Opposition to Bunge-Viterra

Another week, another multi-billion dollar takeover forecasted to kill competition. The latest example is in the agribusiness sector, with global grain giant Bunge’s plans to purchase competitor Viterra under scrutiny from the Competition Bureau.

In a recent report, the Bureau found that “the transaction is likely to harm competition in markets for grain purchasing in Western Canada, as well as for the sale of canola oil in Eastern Canada.” The Bureau notes that Bunge’s control of another one of Viterra’s competitors, G3, would give Bunge the ability to coordinate between the two at the expense of Canadian farmers.

Farmers have reacted positively to the strong stand from the competition watchdog. President Ian Boxall of the Agricultural Producers Association of Saskatchewan supported the Bureau’s findings in a statement to CochraneNow: “This merger is not good for producers. It is not good for rural economies and it is not good for Saskatchewan. The only people that are gonna benefit from this merger are the shareholders of Bungie and Viterra.”

While the Bureau’s opposition is a positive step, the decision ultimately rests on Minister of Transport Pablo Rodriguez, who has jurisdiction over the merger given the merging parties’ port infrastructure holdings. But the transaction represents a chance to do things differently and protect Canadian farmers. “Bunge-Viterra represents another step towards harmful consolidation not just in Canada, but in global agricultural markets as well,” said Keldon Bester, Executive Director of the Canadian Anti-Monopoly Project. “In blocking this deal Minister Rodriguez has an opportunity to stand up for Canadian farmers and we encourage him to take it.”

Wu: Capitalism Without Competition is Exploitation

President Joe Biden’s former antitrust adviser and CAMP advisory board member Tim Wu recently offered his perspective on the global competition challenge and Canada’s potential role in it. Wu served as special assistant to President Biden for technology and competition policy from 2021 to 2023 and was credited with being the architect of the Biden administration’s competition and antitrust policies.

Wu advised Canada to “get away from consent decrees and start blocking mergers.” He believed the concessions companies made to get deals approved were “too wimpy.” Canada relies heavily on these agreements to settle merger issues and has never successfully blocked a merger through the courts.

Wu, who grew up in Toronto, saw a concerning tolerance in Canada for oligopolies and monopolies. He urged Canadian antitrust enforcers to be willing to take risks and bring cases even if there was a chance of losing. Competition Commissioner Matthew Boswell seems to be hewing to this advice, having recently tried to fully block the Rogers-Shaw merger and opposing Bunge’s acquisition of competing grain giant Viterra. Boswell has also pushed for reforms to give the Competition Bureau additional powers to review and remedy anticompetitive mergers.

Wu framed the issue as one of economic democracy, warning that governments that ignored the public’s concerns about competition would ultimately fall. As he put it, “Capitalism without competition, it’s not capitalism. It’s exploitation.”

FTC says RIP to Non-competes

The U.S. Federal Trade Commission (FTC) has voted 3-2 to ban non-compete agreements for most workers across the United States. This landmark rule, set to take effect in late August 2024, is expected to liberate approximately 30 million Americans from restrictive employment contracts that limit their ability to work for competitors or start their own businesses.

Tech industry figures have been particularly supportive of the FTC’s decision. That support is based on the belief that eliminating non-competes will spur innovation, boost wages, and lead to the creation of new startups by allowing talent to flow more freely between companies. Studies show that wages tend to rise in areas that prohibit non-competes, while they fall in jurisdictions that enforce them.

Wasting no time, the U.S. Chamber of Commerce and other big business lobby groups have vowed to challenge the FTC’s rule in court, arguing that the agency has overstepped its authority and that non-competes are necessary to protect trade secrets and intellectual property. These legal battles could delay the implementation of the ban or potentially overturn it altogether, but the fight against the restriction of workers is one worth having.

In Canada, non-compete agreements are not outright banned at the federal level, but they are more difficult to enforce compared to the United States. Provinces like Ontario have led the way in prohibiting employers from entering into non-compete agreements with employees in the first place, with limited exceptions for executives and in the context of a sale of a business.

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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