With the unforeseen rise of “big tech,” Canadians are faced with an important question: does competition law need a fundamental rethink? What reforms should the government consider, and which should they steer clear of? And what are the risks of trying to enlist competition law to address a broader set of concerns?
To address these questions, MLI hosted a webinar titled Competition Law Reform in Canada: Risks and Opportunities. The event was moderated by Catherine Murray, business analyst and TV host, and featured experts including: Erika Douglas, Associate Professor of Law at Temple University; Daniel Sokol, Carolyn Craig Franklin Chair in Law and Business at the USC Gould School of Law; and Aaron Wudrick, Director of MLI’s Domestic Policy Program.
Panellists discussed the risks of introducing far-reaching amendments to the Competition Act ahead of anticipated consultations, which the Canadian government is expected to launch this fall. According to Sokol, consideration must be given to how existing laws can already affect change, making new powers unnecessary. As he notes, “If the problem is we don’t have the resources to bring the kind of cases we want to bring, that’s fine, let’s increase the resources.”
Citing the possibility of unintended consequences, Sokol offers the example of Europe where the introduction of broad powers with the General Data Protection Regulation led to “less AI investment, higher concentration and more consolidation, [and] fewer apps.” He warns of similar consequences in Canada, namely in cities like Toronto which depend on a large tech sector. Indeed, he warns that we shouldn’t be thinking that the rest of the world is moving in this direction of more legislation. For instance, the UK is proposing reforms that are much more collaborative with industry, while countries like Japan, Korea, Brazil “actually dispute the need for broad ex ante competition regulation.”
Panellists also expressed concerns over amendments to the Act that passed this summer as part of the Budget Implementation Act (BIA). “With the BIA, consumer privacy is now relevant to mergers, abuse, and civil agreements,” says Douglas. “We have assumed when privacy improves, competition improves and vice versa, but the BIA amendments regress from that view. There are some hidden issues that are going to come out particularly because Canada is a jurisdiction with both strong competition law and strong privacy law.”
The issue is further complicated by the unique nature of privacy in digital transactions, making it unclear that data-driven practices are opposed to consumer interests or are inherently anti-competitive. The question is raised by Wudrick: “Some may think that to constrain the power from Amazon we should limit their ability to collect information, but what if people are willing to give up their privacy if it means that Amazon is going to show them things that they like? That’s what is difficult in self-preferencing, it’s hard to define what is legitimate from what is not.”
Whereas the panellists agreed on the necessity of reform to promote competition, they also point to how the problem may well be rooted in Canada’s political structure. “I would challenge the notion that Canadians generally favour competition,” says Wudrick, citing the clear lack of competition in sectors like telecommunication, which gets far less attention.
Of course, this does not mean that we shouldn’t go after tech companies for anti-competitive conduct using existing laws. Or that there might be other areas of Canadian law in need of reform. But, as other countries adopt different competition policies, Canada stands to benefit not by adopting rash policies but by empirically observing the results: “One of the benefits of Canada waiting to see how things play out… is that we can adopt best practices and avoid worst practices,” concludes Sokol.
