Letters from CAMP

Letters: Bureau Goes After Grocery Giants

May 26, 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:

  • Competition Bureau launches investigation of restrictive real estate practices in grocery sector
  • Industry Minister throws cold water on Competition Bureau airline market study
  • U.S. DOJ brings antitrust suit to break up Live Nation’s entertainment monopoly

Let’s dive in.

Bagging the Big Guys: Loblaws and Sobeys in Competition Crosshairs

Canada’s Competition Bureau has launched investigations into the parent companies of grocery chains Loblaws and Sobeys for alleged anticompetitive practices, putting to work the new powers given to the bureau last year. Federal Court documents reveal that the probes focus on the companies’ use of property controls to hinder competition in the retail grocery sector by preventing the entry and expansion of competing retailers.

The Commissioner of Competition argues that these property controls limit the activities of potential tenants and competitors, effectively stifling competition in the grocery market. While Loblaws’ parent company, George Weston Ltd., is cooperating with the review, Sobeys’ owner, Empire Co. Ltd., is contesting the inquiry, labeling it “unlawful” and driven by political pressure.

The bureau’s investigation scrutinizes two types of property controls used by the grocery retailers across Canada: restrictive covenants that limit land use even after ownership changes and exclusivity clauses in commercial leases that dictate who landowners can lease to and what products can be sold near another leaseholder’s business.

In a press release marking the confirmation of the investigation, CAMP Executive Director Keldon Bester said that “after years of bearing the brunt of the rising cost of living, Canadians deserve to see the new powers they gave the Bureau put to work.”

Bureau’s Airline Probe Experiences Government Turbulence

As previously covered by CAMP, the Competition Bureau is currently engaged in a market study of Canada’s airline sector, making use of new powers granted to the enforcer last year. While the move to grant the powers was an important step by the government to strengthen Canada’s competition law, messaging from the government, including a letter from Industry Minister François-Philippe Champagne, show a hesitance for the bureau to dive deep into the issues affecting the industry.

Champagne’s letter emphasizes the government’s awareness of competition issues and legislative efforts to empower the bureau, but emphasizes procedural guardrails and seeks to limit the scope of the study, suggesting questions of airport governance be excluded. The bureau’s study has the potential to uncover serious competition issues such as predatory pricing, but the government’s response seems to be an initial shot across the bow that it expects the bureau to stay in its lane.

As the study progresses, it is crucial for the Competition Bureau to maintain its independence, and ensure that its findings lead to meaningful reforms. Only then can the objectives of lower prices and improved services for Canadian air passengers be realized.

Curtain Call on Live Nation’s Entertainment Monopoly

The U.S. Department of Justice has filed a civil antitrust lawsuit against Ticketmaster and its parent company Live Nation Entertainment this week, accusing the company of abusing its dominant market position at the cost of concertgoers and artists. This legal action comes after years of complaints from fans, artists, and venues about Ticketmaster’s practices, including high fees and aggressive tactics to maintain its market share.

According to the lawsuit, Ticketmaster has engaged in a variety of anticompetitive practices, such as forcing venues to use its services exclusively, retaliating against venues that use competing ticketing services, and using its control over major artists to pressure venues into long-term contracts. These actions have made it difficult for competitors to enter the market and have led to higher prices and lower quality service for consumers. The Justice Department’s action could lead to major changes in the industry, including the breakup of Ticketmaster and Live Nation, which merged in 2010 despite concerns about the impact on competition.

Surprising few, rather than hurting competition, Ticketmaster and Live Nation argue that their business practices are not only lawful, but have been beneficial to the entertainment industry. Tell it to the judge.

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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