April 13, 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:

• Pharmacy benefit managers under the spotlight as Competition Bureau looks into healthcare middlemen
• Empty promises won’t protect Canada’s sovereignty when it comes to critical infrastructure
• Historic U.S. antitrust trial that Mark Zuckerberg tried to kill starts this coming Monday

Now let’s dive in.

Pharmacy Middlemen Face Canadian Scrutiny

Canada’s Competition Bureau has initiated an investigation into Express Scripts Canada, a major pharmacy benefit manager (PBM) that processes prescription drug claims and operates mail-order pharmacies nationwide. This week, the Bureau announced it had secured a federal court order requiring the company to provide detailed records and testimony to explore allegations of anti-competitive practices in the healthcare space.

The investigation appears to have two streams. First, the Bureau is looking into whether Express Scripts’ practice of “patient steering” through preferred provider networks (PPNs has pressured Canadians into using affiliated pharmacies rather than a pharmacy of their choice. Second, the Bureau is considering whether the corporation engaged in “margin squeezing,” burdening pharmacy competitors with onerous fees.

PBMs like Express Scripts play a powerful yet opaque role in healthcare, managing drug benefits for employers, insurance companies, and government programs. Their position allows them significant influence over drug pricing, pharmacy reimbursements, and patient access. Critics argue that this role creates conflicts of interest, incentivizing practices that boost profits at the expense of patient choice and affordability.

Canada is not alone in diving into the pharmacy middleman industry. The inquiry mirrors ongoing actions in the U.S., where the Federal Trade Commission (FTC) has targeted PBMs for allegedly inflating insulin prices by leveraging their middleman positions to disadvantage competitors and limit consumer choice. CAMP will be following the investigation closely and translating for readers as the situation develops.

📰 CAMP in the News 📰

• Bester and Clapp, The Monopoly Problem at the Heart of Canada’s Food System (Perspectives Journal)

Canada’s Critical Infrastructure Should Not Be For Sale

American private equity giant Blackstone is seeking regulatory approval for a $7-billion stake in Rogers Communications’ wireless network infrastructure. This week, Globe and Mail columnist Andrew Willis called on policy makers to require CEO Stephen Schwarzman to speak out against President Trump in exchange for national security review clearance of the transaction.

But what good would a few harsh words do if we no longer had domestic ownership of our critical infrastructure? Gestures like these are meaningless in a geopolitical environment where ownership and control of infrastructures, resources, and production capacity are paramount. Rather than strike deals, regulators need to strengthen our control over critical infrastructure to mitigate future vulnerabilities.

Canadian infrastructure, notably telecom networks, remain vital to preserving Canada’s future as an independent nation next door to an increasingly hostile and erratic neighbour. Rather than seeking empty platitudes, Canada should have a red line against the sale of critical infrastructure to foreign buyers in today’s unpredictable geopolitical landscape.

📚 What We’re Reading 📚

• Alba and Love, Google AI Search Shift Leaves Websites Feeling Betrayed (Bloomberg)
• Jackson, Trying to fix my combine, I need politicians who really get what farmers are facing (CBC)
• Hanley, State Antimonopoly Enforcement Must Be a Guardian of American Democracy (The Sling)

Meta’s U.S. Antitrust Trial Kicks Off Monday

A historic antitrust trial against Meta, formerly Facebook, begins Monday in U.S. federal court. Brought by the Federal Trade Commission (FTC), the suit alleges that Meta systematically used illegal “buy-or-bury” tactics to suppress competition, notably through the acquisitions of Instagram and WhatsApp. The FTC argues that Meta’s executives recognized their vulnerability during the critical transition to mobile technology and chose acquisition over innovation, killing competition and cementing their dominant position at the expense of consumer choice.

This case is not simply about reconsidering past mergers; it represents a broader struggle over how Big Tech companies influence competition and innovation in the digital economy. Meta’s control of key communications platforms has given it influence over privacy standards, freedom of expression, and the flow of information within and across countries.

While CEO Mark Zuckerberg engaged in a flurry of lobbying, including direct appeals to President Trump, ahead of the suit, so far the trial is proceeding as planned. But that doesn’t mean Meta’s lobbying hasn’t been successful. The remedies the FTC seeks in the case could significantly alter the digital landscape, including potential divestments of Instagram and WhatsApp, to restore competition. At any point in the process Trump could lean on the FTC to take a lighter touch to the benefit of the platform giant. No surprise that at CAMP we’re hoping U.S. trustbusters will stand firm in spite of any political headwinds.

To keep up with the day-to-day developments of the trial be sure to subscribe to Big Tech on Trial for Brendan Benedict’s coverage as the historic event unfolds.

If you have any monopoly tips or stories you’d like to share, drop us a line at hello@antimonopoly.ca

Follow CAMP on Twitter LinkedIn Instagram or Facebook​

​