Letters from CAMP

Letters: Land Grab

June 9, 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:

  • Corporations concentrating the ownership of farm land in Canada
  • A call to resist the siren song of consolidation and national champions in Europe
  • U.S. antitrust enforcers take a look under the hood of the AI market

Let’s dive in.

Housing to Harvests: Investors’ Growing Appetite for Canadian Real Estate

While grocers get the lion share of the attention, corporate concentration is an issue at all levels of the food system, often at the expense of farmers and consumers. This week brought evidence that this concentration is extending well beyond the grocery shelves and into the very land that farmers rely on to produce their crops.

As reported by CBC News, an influx of investment corporations like Bonnefield is making it increasingly difficult for young farmers to acquire farmland, potentially jeopardizing the future of independent farming in Canada. With over $1.4 billion in assets across seven provinces and 140,000 acres of farmland, Bonnefield’s growing portfolio is a testament to the shifting landscape of Canadian agriculture.

And it’s not just happening in Ontario. Researchers have revealed similar troubling patterns emerging in the Prairies, the home of the majority of Canada’s arable land. The trends of farm consolidation, land concentration, and growing investor ownership are leading to growing power imbalance in the food system. These changes mirror the investor-driven transformation seen in the urban real estate market, with the benefits accruing to a select few at the cost of many. As farmland prices continue to soar beyond their productive value, new farmers face daunting barriers to entry. This is evident in the unprecedented levels of farm debt and dwindling rural populations as more farmers call it quits amid these pressures.

The growing dominance of institutional investors in farmland ownership is not only pricing out young farmers but also jeopardizing the social, economic, and environmental sustainability of Canada’s agricultural base. Pushing back against consolidation at every level of the farm system is key to preserving equitable land access for farmers, sustainable livelihoods, and valuing farmland for its social and ecological worth, not just its productive capacity.

Competition, Not Consolidation, is the Way Forward for Europe

As Europe grapples with its future direction, prominent leaders like Enrico Letta, Mario Draghi, and Emmanuel Macron are advocating for a misguided solution: corporate consolidation. In a recent ProMarket article, Open Markets’ Max von Thun contends that facilitating the creation of “European champions” through lax competition enforcement could actually undermine the EU’s economic prosperity and democratic integrity.

Von Thun dismantles the argument that coddling corporate giants is the path to prosperity and resilience. He points out that Europe already suffers from weak competition in many sectors, with negative consequences for innovation, consumer welfare, and economic resilience. Further consolidation would only exacerbate these issues. Instead, he argues the solution lies in more unified economic unification through regulatory alignment and deeper capital markets, while maintaining robust competition enforcement.

This is the vision Canada should embrace as we modernize our own competition laws and set the foundation for our future economy. The goal should be an economy where power is shared more equitably, not concentrated in the hands of a few behemoths under the guise of national security concerns. By resisting the temptation of consolidation and instead promoting open, dynamic markets, we can foster a more innovative and resilient economy.

DOJ and FTC Set Sights on AI Partnerships

A major lesson from the global antitrust resurgence is that if given a free pass, once dynamic markets can quickly become captured by a small handful of major firms. Learning that lesson, this week the U.S. Department of Justice (DOJ) and the Federal Trade Commission (FTC) reached an agreement to divide responsibility for investigating the conduct of leaders in the AI space like NVIDIA, Microsoft, and OpenAI.

Under the arrangement, the DOJ will take the lead in examining whether NVIDIA, the world’s leading manufacturer of AI chips, has violated antitrust laws. With a market share of roughly 80% and a market capitalization surpassing $3 trillion and on track to being the world’s most valuable public company, NVIDIA’s dominance has raised concerns about unfair competitive practices such as locking customers into using its chips and controlling their distribution.

Meanwhile, the FTC will focus its attention on Microsoft and OpenAI. Microsoft’s $13 billion investment in OpenAI, the creator of the popular ChatGPT chatbot, has drawn scrutiny over the potential for the tech giant to exert undue influence over the AI market. The FTC is also investigating whether Microsoft structured its deal with OpenAI in a way that allows it to avoid direct regulatory review.

The intensifying regulatory scrutiny comes amid growing concerns about the concentration of power in the AI industry and the potential for already-dominant firms to leverage their market position in data and computing power to control emerging markets. As U.S. antitrust chief Jonathan Kanter warned, “AI relies on massive amounts of data and computing power, which can give already dominant firms a substantial advantage.” It’s the job of regulators to ensure that advantage is not abused.

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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