Letters from CAMP

Letters: Is Loblaws Up to Code?

May 19, 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:

  • Grocery giant Loblaw agrees to participate in industry-led grocery code
  • Google flexes its control over the guest list at non-profit conference
  • U.S. Supreme Court defends financial watchdog against legal attack

Let’s dive in.

Loblaw Agrees to Grocery Code, but Competition Issues Remain

Amid public pressure from a consumer boycott against the grocer, Loblaw Companies Ltd. has agreed to abide by a proposed grocery code of conduct, following years of resistance from the country’s largest grocers. This move comes as a response to growing pressure from suppliers and the government to address unfair practices and power imbalances in the industry. By improving transparency, fair dealing, and dispute resolution between retailers and their suppliers the code aims to create a more balanced relationship between a diverse marketplace of suppliers and Canada’s grocery giants.

While Loblaw’s decision is a step in the right direction, work remains to be done to create genuine competition in Canada’s food system. The Competition Bureau’s 2023 report highlights the need for additional measures to increase choice and lower prices for consumers in the wake of decades of consolidation. These include reducing barriers to entry for new competitors, promoting innovation and differentiation among retailers, and addressing the concentration of power among a handful of dominant players.

But to truly transform Canada’s grocery sector, policymakers must go beyond industry-led codes of conduct and take bold action to dismantle the power that has been allowed to take root in Canada’s food system. Beyond introducing more competition at the retail level, policymakers must look further up the supply chain and tangle with the consolidation that has been allowed to occur behind the backs of Canadians. To do so will require putting Canada’s strengthened competition laws to work, empowering regulators to take on abusive practices that choke off competition and encouraging the growth of independent and diverse alternative business models.

Agreeing to the grocery code is a good start, but real change will require more than companies responding to their latest PR crisis.

Google Blocks Balsillie

The guest list gives you power. That was clear this week as Google blocked Jim Balsillie, the former co-CEO of BlackBerry and frequent Big Tech critic, from delivering a keynote speech at the Canadian RegTech Association Annual Summit, which was to be held at Google’s Toronto offices. The search giant refused to approve Balsillie’s appearance, despite initial support from Google Canada employees, claiming they “preferred other speakers.”

The move by Google to control debate and discussion at a not-for-profit event, has drawn sharp criticism. Senator Colin Deacon slammed Google’s actions, saying it proves the case of those who believe Big Tech’s power must be curtailed. The move is reminiscent of the 2023 University of Toronto Law School Amazon funding scandal, where among other things Amazon’s undisclosed support allowed it to control the speakers list for events discussing competition policy at the law school.

The Balsillie incident underscores why Canada must chart its own course in developing a more sovereign and democratic economy. The federal government has taken the first step in making critical competition law reforms, but work remains to truly reset the balance of power between Canadians and global corporate giants. Regulators must be emboldened to use new legal tools to promote fair competition and innovation that benefits all Canadians, not just the monopolies that control the guest list.

U.S. Supreme Court Defends Financial Watchdog

This week the U.S. Supreme Court handed the Consumer Financial Protection Bureau (CFPB) a major victory, ruling 7-2 that the agency’s funding structure is constitutional. This resolves a key legal challenge that had been holding back the CFPB’s efforts to crack down on a wide range of predatory practices by financial corporations like payday lenders offering high-cost loans to vulnerable borrowers. With this legal uncertainty removed, the CFPB is now poised to aggressively resume its regulatory agenda.

Consumer advocates praised the ruling as a “resounding victory” ensuring the CFPB can continue its vital mission of protecting Americans from abusive financial practices. Meanwhile, financial industry lobbyists warned the decision would unleash a rogue agency with vast unchecked powers. Financial institutions in the regulators’ sights hoped the case would defang the CFPB, but now they face a newly emboldened regulator.
The CFPB case is part of a broader legal battle over the power of federal agencies as big business increasingly pushes back against government efforts to rein in market dominance. Google, for example, just tried to short-circuit an FTC antitrust lawsuit by preemptively paying the maximum potential damages upfront. While the move may let Google avoid a jury trial for now, it’s unlikely to halt growing bipartisan momentum for stronger oversight of Silicon Valley giants.

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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