Information & Ethics Committee on Oct. 4th, 2018

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

Thanks very much.

I'm wary of relitigating PIPEDA. We did a fulsome study on privacy protection. We made recommendations, and a lot of what both of you have said would be answered to varying degrees if those recommendations were adopted.

On the competition question, this is new territory for us in many ways, so I want to visit that in more detail.

You, Mr. Stucke, identified eight potential antitrust harms. A number of those were related to privacy and over-collection of data, surveillance and implications of security breaches. Let's bracket all that relates to data protection and privacy, because we've had that conversation at length.

Let's talk instead about innovation, the other potential harms and the tools that are required to address those potential harms.

Let's take one other item off the table, which I think is pretty obvious. If a company is using data to prefer their own product, we already have rules that preclude that from happening, so let's take that off the table as well. We heard from the CRTC that, when certain platforms, certain ISPs, prefer their own video platform over others, a streaming platform over others, it's contrary to the law, so let's bracket that.

As for the other potential antitrust harms, in your view, what are the tools required to address them?

[Prof. Maurice Stucke]

I'll start off first with data-driven mergers. Let's say that Facebook were to acquire IAC, which is the largest dating platform. It has Match.com and the like. Under the competition authority, you would look at that. It's not necessarily a horizontal merger, because they don't directly compete. It's not a vertical merger, because it's not like a supplier, manufacturer or distribution chain, and it's not really a conglomerate merger, although you argue that maybe Facebook might be a perceived potential entrant. Under that, you wouldn't really have any antitrust significance, but now the issue is whether the acquisition of that data will help Facebook attain or maintain its dominance in other markets. That's one issue.

How do you assess these data-driven mergers, and how do you assess whether or not Google is even dominant or has monopoly power when you're relying largely on these small but significant non-transitory increases in price standards? You have very much price-centric tools to assess dominance....

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

That's fair, but let's get to an alternative to that, then. Let's also address the fact that network effects not only benefit the company, they benefit the consumer at various points. I use Google Maps, and Google Maps is a better product because more users use it. If it were just me and Peter Kent using it, I wouldn't use the app. It wouldn't be particularly useful to me.

I think we've missed this conversation in many respects all the way around the table. That cup of coffee, I get it. It's more valuable to me than the fact that someone now knows what I study. The fact that someone knows what I study is not valuable to me on an individual basis, but aggregated, it's very useful to the company. The company is able to create value by combining all of our collective data together. I think there is a good exchange in certain respects, and maybe a bad exchange in other respects in different contexts.

How do we empower the Competition Bureau to address this problem?

[Prof. Maurice Stucke]

Just on network effects, there's good but there's also bad.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

Of course.

[Prof. Maurice Stucke]

It could help powerful firms become even more powerful until they're entrenched in the marketplace. You have multiple—

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

Of course, and in other cases you can provide better product.

[Prof. Maurice Stucke]

Yes, but you also have multiple network effects. I would point out that DuckDuckGo has a much better privacy policy, but it doesn't have as good a search engine, and it might be just disadvantaged by these network effects. It's a doubled-edged sword.

How do we empower the competition authority? I think it's in multiple ways. One of them is to go away from price-centric tools when you're dealing with markets that are ostensibly for free. Second is to look at the importance of data—

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

We move away from price-centric tools to what?

[Prof. Maurice Stucke]

One thing is to have, then, alternatives such as a small but significant non-transitory decrease in privacy protection, and there would be coordination with the privacy official and the competition official.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

All right.

[Prof. Maurice Stucke]

The EDPS is working toward that effect.

The other thing would be looking at data as an important mechanism, even when it's not bought and sold. I would look at Apple's acquisition of Shazam. There, the European Commission, I think for the first time, looked at that merger like this: Could the data itself help Amazon maintain or increase its market power? Those are the types of questions. Before, that wasn't really asked.

Then the other thing would be to look at the abuses that these data-opolies could have, and how they can, in many different ways, deprive data to companies that previously might have had the data, or to somewhat disadvantage them. Now you're saying we have the tools for that. That's great, but then I would ask if they are necessarily working to the extent that we would expect. Look to see the enforcement actions that are being taken elsewhere. Is that happening in Canada? If it is, how come our tools aren't necessarily deterring that behaviour?

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

Then here's the last question I have for you. You've mentioned Germany and you've mentioned the EU. Are those the two jurisdictions you would point us to and say this is the model that Canada and the United States should pursue in relation to antitrust?

[Prof. Maurice Stucke]

I'm not saying it's the model, but they're starting to ask the right questions.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

Is there no model you would point to?

[Prof. Maurice Stucke]

No. We are now in the new frontier, whereby the tools that we have don't necessarily translate well into this new.... There's not a well-established model. We're now starting to find out what we should do to address this sort of behaviour. It might be you're not necessarily going to rely on an effects-based standard, but you'll have simpler presumptions—for example, what a dominant firm can or can't do—and just put greater limits on their ability to engage in certain behaviour.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

I'm out of time, so all I would say is that I really appreciate your answers. Where you have specific examples of tools that you think the Competition Bureau should have, if you could follow up in writing, it would be much appreciated.

[Prof. Maurice Stucke]

Okay. Thank you.

[The Chair, Conservative, Bob Zimmer]

Thank you, Mr. Erskine-Smith.

Next up, for seven minutes, is Mr. Kent.

[Peter Kent, Conservative, Thornhill, ON]

Thank you, Chair.

I just have one final question, and it's about this illusive question of who owns my data, who owns the citizen's data, who owns my browsing history.

In terms of full disclosure, I have two Facebook websites, as a politician. I post content.

[Charlie Angus, NDP, Timmins—James Bay, ON]

I visit them all the time.

[Peter Kent, Conservative, Thornhill, ON]

Thank you, Mr. Angus, for visiting the website.

I encourage relationship building with those who come to the website. I encourage feedback. As a politician I gather data from that website to be responsibly used. I use Google perhaps as many as 50 times a day. As Mr. Erskine-Smith said, DuckDuckGo and Mozilla Firefox are good, but Google is much better for my applications.

I was struck—and I'm assuming that you were, too, and I'd like your comments—when Facebook's Mr. Zuckerberg appeared before the congressional committee and he would not address the question of who owns the browsing history of those who use his platforms. I'm just wondering. In light of the fact that the Cambridge Analytica-Facebook-AggregateIQ scandal is based on the fact that improperly harvested data, including the vulnerabilities or the very personal aspects of users' browsing history, among other things, came together for this phenomenon that we've come to know as “psychographic microtargeting” and attempts to influence electoral processes.

I'm just wondering if I could have final comments from you, Professor, and then Ms. Wylie, on who owns my data.

[Prof. Maurice Stucke]

In the United States that's the great unknown. It came up in a Supreme Court case, where there was geolocation tracking of an individual. During the oral arguments before the U.S. Supreme Court there was precisely this question: Who owns the geolocation data? Here it's unclear. Then to what extent do you own all of the property rights or only some of the property rights? What would then be the bundle of the property rights that the consumer owns, that the company owns, and the like?

There, it's unknown. It's not yet been legally resolved.

[Peter Kent, Conservative, Thornhill, ON]

Ms. Wylie.

[Bianca Wylie]

Mr. Zimmer, I want to thank you for checking on me, in terms of my confidence to respond but the reason I'm saying I don't know is because of what I know. I'm saying this in a professional capacity of knowing that the people who tell me they know what to do right now are the ones that I run from the fastest—honestly.

I want that to be a thing everyone hears me say. I've worked a lot with this and there are a lot of unknowns. That's why I don't want to say I have the answers. I know it's frustrating that we're not sure, but it's because we need to get into more of this stuff. I would just posit that part of the problem is that, when I talk to economists, they have one language, and when I talk to lawyers, they have another language. We need to be working together more on all of these issues, to get us to the next level.

In terms of the idea of who owns my data, I've been in some interesting conversations about this. One helpful thing I heard was that data is a representation of a fact. No one owns facts. Sometimes it's about the quality of the capture of a fact, and then maybe you can go and say that you've not captured my fact correctly. This is difficult. I would point to Teresa Scassa, who has written a paper recently about data ownership, which gets into the reasons why this question is difficult.

It's the nature of data that it's not just one, and not finite in its existence. It is challenging in what it is. I think we're still trying to figure all of that out, and the different relationships between what we consider our data and others who are using it.