Letters from CAMP

Letters: Protecting Competition in AI

June 30, 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 calls on the Competition Bureau to protect competition in the markets for AI
  • U.S. grocery giant abandons property controls after antitrust scrutiny
  • Anti-monopoly coalition calls for defending competition in digital advertising markets

Let’s dive in.

CAMP: Bureau Must Protect Competition in Emerging AI Markets

This week, CAMP submitted a response to the Competition Bureau’s call for information on protecting competition in the markets for artificial intelligence (AI). In its submission, CAMP emphasized the need for proactive measures to prevent the consolidation of power in AI markets. Learning from the mistakes of the last generation of digital markets, vigilance is needed today to avoid the same pattern of consolidation of power playing out in the markets for AI.

To protect competition, CAMP’s submission calls on the Bureau to take three concrete actions. First, beyond a call for information, the Bureau must use its new market study powers to evaluate the competitive landscape in AI. Part of that study must include scrutiny of the web of partnerships between major tech firms and AI startups, ensuring that these partnerships are not “acquisitions by stealth” intended to avoid antitrust scrutiny.

CAMP also calls for the study of how AI capabilities might enable anticompetitive practices familiar to competition law such as collusion. Even rudimentary implementations of AI such as algorithmic pricing have the potential to undermine competition and require the Bureau to keep its own capabilities current.

The Bureau’s call for information comes at a time of broader focus on AI in the federal government. Innovation Science and Economic Development (ISED) has launched a public consultation on how to allocate its $2 billion investment in AI computing infrastructure, announced in the April 2024 budget. As the government seeks to bolster Canada’s AI capabilities, it must also ensure that these investments must support fair competition and avoid subsidizing the concentration of power in the hands of a few dominant players.

U.S. Grocery Giant Backs Off Property Controls

It’s not just Canada where grocery monopolies are under the spotlight. Amid the risk of further consolidation in the pending Kroger-Albertsons merger, some bright spots have emerged south of the border. Following antitrust scrutiny on the part of the Washington state attorney general, grocery giant Albertsons has abandoned restrictive land use clauses in the city of Bellingham. Though a local victory, the decision is a crucial step towards dismantling anti-competitive practices that have long plagued the grocery industry in Canada and the U.S..

This move opens up opportunities for new grocery stores in previously restricted areas and sets a precedent that could ripple across North America. The removal of these clauses, which had effectively created a food desert in a low-income neighborhood, demonstrates the power of regulatory scrutiny in fostering a more competitive marketplace. It’s a clear win for consumers who have been bearing the brunt of limited choices, higher prices, and worse health outcomes due to reduced competition.

The work of the Washington state attorney general mirrors steps taken by Canada’s Competition Bureau in its investigation into the use of restrictive property clauses by major grocers Loblaw and Sobeys. Though early days, the Bureau’s investigation under the newly empowered Competition Act is the beginning of a new era of robust enforcement against anticompetitive behavior in not just the grocery sector but the economy writ large.

A New Front in the War Against Google’s Ad Dominance

Google’s monopoly in digital advertising is finally getting the attention it deserves. This week a coalition of anti-monopoly groups launched USvGoogleAds, a comprehensive resource providing updates on the ongoing international scrutiny of Google’s dominance. Though focused on the U.S. Department of Justice’s (DOJ) upcoming antitrust trial, the site is also an opportunity to synthesize the international efforts against Google’s global ad dominance.

In the DOJ case Google stands accused of illegally monopolizing the digital advertising industry, exerting what has been described as mob-like control over ad revenue distribution. But the effects of this monopoly and the antitrust response are far-reaching. This week, CAMP Executive Director Keldon Bester wrote in the National Post how the Competition Bureau’s recently expanded Google investigation is a win for Canadian publishers and advertisers.

The expanded investigation is another signal of the shift towards more aggressive antitrust enforcement in Canada. The probe examines Google’s control over various aspects of the digital advertising supply chain, including sell-side platforms, buy-side platforms, and ad exchanges. While Canadians will have to wait for the outcome of the investigation, the Bureau has a real chance to rebalance the relationship between Canada’s ailing news organizations and the elephant in the digital advertising market.

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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