Letters from CAMP: Big Tech Pushback
Canadian Anti-Monopoly Project
CAMP is fighting for a more democratic economy
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:
- Big tech policy fights in Canada highlight the need for competition policy to defuse concentrated power
- New competition rules are put to use breaking up pharma monopolies in Canada
- Competition expert Denise Hearn talks about the link between fair competition and vibrant democracies
Let's dive in.
Getting to the Heart of Big Tech Power
On several policy files, Canada is at the forefront of the pushback against dominant tech giants. Across news policy, online harms and taxation, Canada has stepped on the toes of dominant tech firms and felt the heat.
C-18 has generated reprisals from Meta and Google, contradicting their longstanding commitment to an open internet, and this week Google added a new "DST fee" to advertising transactions after the introduction of the Digital Services Tax, mirroring tactics in other countries to undermine fair taxation of digital services.
Pushback is expected and should not dissuade Canada’s efforts to maintain sovereignty against digital giants. But a weakness that runs through Canada’s digital policy measures is that they aim to sand down the edges rather than address the power of digital giants.
In the Toronto Star this week, reporter Justin Ling notes that Canada’s policy efforts will keep falling short if it doesn’t challenge the power that allows these companies to distort markets around them. The U.S. and E.U. have used competition laws and new legislation to break the hold these companies have on digital markets and create fair competition Ling put the question of why Canada hasn’t followed a similar path to Heritage Minister Pascale St-Onge, and she claimed that a divisive political environment was preventing the government from going further.
Policies like C-11 and C-18 have made headlines, but the role of Canada’s new competition laws in preventing dominant corporations from abusing their power is underappreciated. In contrast to St-Onge’s comments about division on Canada’s big tech policy, competition law reform received unanimous support from federal MPs.
Competition policy isn’t a swiss army knife, and targeted policy is needed to address specific issues. But the root of many of these issues is the concentrated economic power that firms have been able to accrue and abuse. Effective competition policy is just the tool to address that power. The Competition Bureau’s expanded investigation into Google’s ad tech practices, building on the U.S. DOJ’s case against the tech giant, should be the first step in using Canada’s reformed competition law to restore fair competition to key digital markets.
As corporations continue to wield enormous influence over our lives and economy, we must persist in rebalancing that power in the public interest. As Ling notes, “entrepreneurship can’t survive in a rigged market.†True for markets well beyond news, Canada’s task is to restore fairness to these rigged markets.
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?New Competition Rules Pointed at Pharma Monopolies
This week, Canadian company JAMP Pharma filed an application with the Competition Tribunal alleging anticompetitive practices by global pharmaceutical giant J&J. The case centers on Janssen's attempts to maintain monopoly control over the biologic drug ustekinumab, which is used to treat the autoimmune disease psoriasis.
JAMP accuses J&J of a litany of anticompetitive acts, including gaming the regulatory system, sham litigation, developing a fighting brand, misusing patient support programs, and predatory pricing. These tactics have allowed J&J to continue charging $4,000 per dose, generating an additional $2.1 billion in monopoly profits.
This application is significant on multiple fronts. It’s one of the first cases to make use of private access to Canada’s competition law, allowing companies to bring cases without the Competition Bureau. It also makes use of Canada’s strengthened abuse of dominance laws, arguing that “yesterday’s abusive practices are no longer shielded from legal scrutiny today." The allegations also shine a light on how pharmaceutical companies can abuse patent and regulatory regimes? to extend their monopolies beyond their intended limits.
Hopefully the first of many, the JAMP case shows how Canada’s reformed law can be put to work breaking monopolies in all sectors of the Canadian economy.
Hearn: Making Competition Cool Again
This week, competition expert Denise Hearn appeared on David Moscrop's "Open to Debate" podcast to discuss Canada's monopoly moment. Hearn, co-author of "The Myth of Capitalism," offered valuable insights into the recent momentum behind competition policy reform in Canada.
Hearn highlighted the significance of unanimously passed amendments to the Competition Act, which give regulators new tools like presumptions against merger in concentrated industries. She also emphasized the need for a whole-of-government approach to competition policy, similar to Biden's executive order in the U.S.
However, Hearn cautions that powerful corporate interests are already mobilizing to oppose these changes. She says that sustaining the competition revival will require reframing the issue as fundamental to democracy. Hearn also argued for the importance of making antitrust cool? again. By reframing competition policy as fundamental to economic dynamism, we can build broader public support for these crucial reforms.
As Canada works to catch up with global leaders in antitrust enforcement, the next few years will be pivotal. The challenge now is to sustain this competition revival in the face of pushback from entrenched corporate interests. With experts like Hearn leading the charge, there's reason for optimism that we can create a more competitive, dynamic economy that works for all Canadians.
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