Thank you, Madam Chair.
My name is Vass Bednar. I'm the executive director of McMaster University's new master of public policy in digital society program.
As I'm the co-author of a forthcoming white paper on the state of competition policy in Canada, I'm going to focus my remarks on the potential for reform of the Competition Act, particularly as it relates to the digital economy. I'll also commit to circulating that paper to members of this committee when it's published in the coming days.
When I started researching competition policy in Canada, I was struck by the lack of scholarship on the subject. Most publications come either directly from government officials or from private actors. There's not a whole lot of material that sits in a neutral middle ground, so I’d love to see more of that. I also observe a striking amount of capture in the sector. I’m not sure precisely how that contributes to any policy inertia, but I do sense the Canadian public is increasingly impatient with the legislation’s facilitation and maintenance of oligopolies in our economy. If we want to give our own companies a chance to compete, and protect consumers from new forms of online harm, we should proceed with a thoughtful review of the act.
It has been said that Canada doesn't treat competition policy seriously and that we tolerate high corporate concentration in an effort to be competitive internationally. In fact, former competition commissioner John Pecman has lamented that the bureau lacks the kind of independence that could make it more effective. To my mind, what it comes down to is that there are structural limitations in our legislation that hinder our ability to curb anti-competitive practices, especially for today’s digital economy. This puts us at a disadvantage compared to other countries.
One quick example is the seemingly arbitrary threshold for a merger review. This leads the bureau to potentially overlook anti-competitive mergers.
Another example is fines. The current commissioner, Matthew Boswell, has acknowledged that the maximum penalties for anti-competitive behaviour lack the teeth necessary to deter anti-competitive behaviour.
There's also this bigger question: Should Canada even make an effort to emulate either the American or the European approach to competition policy? Look, we're likely to benefit from the historic antitrust investigations into global tech firms just due to natural spillover effects, but other competition authorities are not going to scrutinize troubling digital competition issues in our own backyard. That's why it's important to me that we act as more anticipatory regulators that can spot harms on the horizon and act accordingly.
Consider a company that has admitted to fixing the price of bread and may have been colluding on wages with other grocers in the pandemic: Loblaw. Now as a case study, just think about their deepening across the financial space with PC Financial; health, with Shoppers Drug Mart and the PC Health app powered by League; insurance and the grocery spaces. This is a case study of the market power that can be achieved through detailed targeted ads and reduced privacy as they refine their proprietary advertising platform, Loblaw Media, emulating a playbook refined by Facebook and Amazon. While this may impact competition, it can also harm consumers by constraining their ability to access everyday essentials at a cheaper price, while Loblaw grows market share.
Right now, Canadian competition policy is silent on such Orwellian activities because the legislation and current guidelines do not adequately comprehend or even stop to consider whether and how data creates a competitive advantage, yet issues on data collection and processing are at the centre of current antitrust cases all around the world. Put simply, Canada’s Competition Bureau does not have the tool kit for a digital economy.
As part of any modernization, we're going to have to critically think about how we can redefine “dominance” via volume and maybe even richness of data, and also understand the competitive harms that can flow from dominant firms that hold large volumes of information. Maybe one of the most important lessons that Canadian policy-makers can learn from the U.S.’s recent work investigating past activity from Facebook, Amazon and Google, and also by China’s efforts with Alibaba is that it's difficult and might even seem disingenuous to retroactively change the policy environment in order to rationalize investigations against massive digital firms.
To my mind, Canada’s competition policy no longer serves our best interests, and digital markets are fundamentally different from traditional ones. This alone warrants modernizing the act alongside more robust privacy legislation in order to better manage these abuses and truly promote dynamism; otherwise, companies that pump up prices on bread for single moms can continue to trade on that same mother's personal information.
It's time for our legislation to catch up.
Thank you.