Letters from CAMP

Letters: CAMPing at the Senate

March 24, 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:

  • CAMP appears before Senate finance committee to support C-59
  • Cost of Canadian internet remains high despite encouraging statistics
  • U.S Department of Justice launches antitrust suit against iPhone maker Apple

Let’s dive in.

CAMP Urges Senators to Take Concentrated Markets Seriously

In an appearance before the Senate Finance Committee this week to discuss Bill C-59, CAMP Executive Director Keldon Bester welcomed the proposed legislation as bringing Canada’s competition law up to speed with our international peers. But to truly tame corporate concentration in Canada, CAMP argued the law should go even further in fortifying protections against corporate consolidation and monopolistic behavior.

Among the positive elements of C-59 highlighted were provisions enabling private companies to launch legal challenges against anti-competitive practices, giving companies options beyond relying solely on the Competition Bureau. With the Bureau’s resources stretched thin across the nation’s $2 trillion economy, CAMP made clear that this “private access” offers a valuable complementary enforcement mechanism. The bill also pushes the Competition Bureau to consider the impacts of mergers on workers alongside consumers and businesses – an important modernization as competition law begins to reckon with the intersection of competition and labour.

But CAMP made clear to the committee that there was room for improvement in how Canada’s competition law treats mergers in highly concentrated markets. In doing so, CAMP advocated for presumptions against allowing further consolidation in already dominated sectors. Canada’s existing laws have persistently waved through mergers culminating in near-monopolies, eroding choice and affordability for Canadians. While already making improvements, C-59 provides an opportunity to finally rectify this oversight by prioritizing market structure analysis.

With structural presumptions, merging parties in concentrated industries bear a higher burden of proof that no competitive harm would occur and must work harder to show how a merger might benefit Canadians. This kind of preemptive safeguarding of open markets will be vital for protecting the interests of Canadian consumers, workers, and entrepreneurs across the economy.

Fuzzy Math Can’t Obscure Canada’s Telecom Toll

According to Statistics Canada’s data, cellphone and internet prices in Canada have been declining, contributing to lower rates of inflation. But according to internet service provider TekSavvy, these official figures misrepresent the facts on the ground for Canadians still paying some of the highest rates in the world for internet access.

TekSavvy notes the agency’s methodology relies heavily on promotional offers and temporary discounts from carriers, rather than accounting for the profusion of added fees that get tacked onto consumers’ final tallies. This contrasts with the consistent increases in telecoms’ average revenue per user (ARPU) metrics, which have held steady or risen over recent years.

When summoned before the House of Commons industry committee recently, the CEOs of Rogers, Telus and Bell all claimed mobile pricing is becoming more affordable amid robust competition. However, critics argue the advertised rates masked by promotional discounts do not reflect the true costs people pay. The telecom leaders cited increased data buckets and consumers switching providers as signs of decreasing prices, but their revenue numbers tell a different story.

Regulators should rely on data tracking the telecom’s consistent ARPU growth rather than advertised rates. Only increased competition from independent providers can sustainably lower consumers’ outrageous mobile costs in Canada.

U.S. DOJ Fires Shot at Apple’s Walled Garden

Apple’s tight control over the smartphone market has led to legal action against the tech giant. The U.S. Department of Justice (DOJ), supported by several states, has accused Apple of engaging in monopolistic practices. The DOJ claims the company creates barriers that make it difficult for competitors to enter the market while forcing excessive fees on developers and consumers. From restricting innovative apps to limiting cloud gaming services, Apple is alleged to employ an array of tactics to maintain its dominance in the industry.

This legal challenge is another step to address the growing concerns about the unchecked power of major technology companies. Last week in a piece for the Globe and Mail, CAMP Executive Director Keldon Bester criticized the emergence of the “bully-based economy” where a few key players dictate the rules and extract value from the ecosystem. Citing the experiences of Epic Games and Beeper, which both faced Apple’s wrath for attempting to challenge the status quo, the article highlights conduct at the center of the DOJ’s case.

The lawsuit against Apple represents a significant step in an emerging global movement to rebalance power dynamics and create an environment where innovation can thrive without being hindered by the whims of monopolistic companies.

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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