Letters from CAMP

Letters: Google Under Investigation, Still

Competition Bureau Expands Google Investigation

In 2021 the Competition Bureau announced it was investigating Google’s practices in the digital advertising market. Since then, the enforcer has been tight lipped about the investigation, leaving it unclear whether the investigation was ongoing or had been shuttered.

That changed this week when the Bureau confirmed that not only was the investigation still ongoing, but also that its scope had increased. Though details are scarce, the update hints that the Bureau is concerned that Google is leveraging its monopoly power across markets and engaging in predatory pricing.

The expanded scope of the investigation is clearly good news. Google is a behemoth in the sprawling online advertising market, controlling how display ads appear on its search results, products and a huge swath of the internet. The technology behind digital advertising is complex. In the fraction of the second before your page loads, an auction occurs to determine which ad will be served to you. With its dominant market shares of the ad server, audience data networks and the “ad exchange,”Google has vertically integrated the adtech technology stack. Ahead of their Canadian counterparts, last year the U.S. Department of Justice launched a suit against Google after its own investigation of the giant’s ad market power last year.

A diagram of the adtech stack and the portions controlled by Google. Source: U.S. Department of Justice.

Returning to the Bureau’s announcement, the development is exciting for two reasons. First, the language of the announcement suggests the Bureau is putting to work its recently strengthened abuse of dominance powers that allow it to pursue conduct with the intent to harm competition. Second, by investigating predatory pricing, the Bureau is pursuing an important unfair method of competition. While lower prices is a benefit of competition, predatory pricing is the temporary lowering of prices below sustainable levels to kill even more effective and efficient competitors. Once those challengers have died off, monopolists can return to squeezing their customers. Allowing predatory pricing to occur trades off short term gains for consumers for the long-term benefits of fair competition.

While the Bureau’s announcement is welcome news, how long will be the businesses affected by this conduct have to wait for relief? Before the expansion of the investigation, the Bureau had already spent four years looking into Google’s conduct. Last year, Unifor, representing Canadian news outlets, squeezed by Google’s outsized control over their primary revenue source, sought an update to the inquiry. With each day that Google’s monopoly persists unchecked, the harms multiply for an independent news industry already struggling to survive, to the detriment of the informed public debate that democracy demands.

Quebecor Calls Out Bell’s Fibre Pricing Practises

Montreal-based media giant Quebecor and subsidiary VMedia have filed multiple complaints against telecom goliath Bell Canada, alleging that Bell is engaging in anti-competitive practices related to its fibre optic network pricing and access. The complaints filed with the Competition Bureau center on three main issues: market dominance, anti-competitive practices, and the impact on competition.

Echoing the Bureau’s Google investigation, Quebecor’s allegations concern predatory pricing and anti-competitive practices in the markets for internet connections into individual homes and businesses as well as the networks that link together major urban centers. The core of their grievance is that Bell, leveraging its dominant position in the market, has engaged in practices designed to undermine competition and unfairly maintain its market dominance. They argue Bell can leverages its power to inflate prices where it faces little competition and use those gains to offer prices below sustainable levels in more competitive markets.

In response to regulatory decisions by the Canadian Radio-television and Telecommunications Commission (CRTC), Bell has sought to appeal a decision that would make it easier for independent companies to sell internet services using its fibre network assets. The CRTC’s decision was intended to stimulate competition in the internet services market in Ontario and Quebec, where independent internet providers have seen a significant decrease in customers. In response to the decision, Bell announced cuts to its network investment plans, a familiar threat from Canada’s telecoms monopolists.

Pharmacy Middleman Sparks Bureau Complaint

The Canadian Pharmacists Association (CPhA) has filed a complaint with the Competition Bureau against Express Scripts Canada, a pharmacy benefit manager (PBM) and subsidiary of the U.S.-based health insurance giant Cigna Corp. Pharmacy benefit managers like Express Scripts act as intermediaries between pharmacies and insurance companies, adjudicating people’s coverage so they don’t have to pay the full costs of their drugs at a pharmacy. The CPhA’s complaint alleges that the new fee could steer customers away from independent pharmacies who are unable to swallow the cost increase.

The CPhA is concerned that the fee arrangement and ESC’s practices, including audits and potential reimbursement claim clawbacks, are anti-competitive and could disadvantage rival pharmacies, leading to a less competitive market that ultimately harms consumers. The complaint also highlights issues about patient choice and access to medications, particularly in rural areas where pharmacy options are limited.

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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