Letters from CAMP: Paying for It
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:
Let's dive in.
Conservatives Take Aim at Payment Giant Interac
Conservatives have set their sights on the companies that control the lifeline of the Canadian economy: our payments network. This week, Conservative MPs Michelle Rempel Garner and Adam Chambers called for the Competition Bureau to investigate Interac’s e-Transfer fee structure and whether it was advancing the interests of the banks that effectively own the network.
This kind of scrutiny is critical amid ongoing concerns that Canada’s biggest banks are slow rolling innovation in the payments sector by keeping innovative competitors at bay. MP Garner pointed out that Interac’s fee structure offers more attractive pricing for high volume participants, meaning that a new entrant in the payment space has to overcome a built in cost disadvantage compared to incumbent players.
CAMP has been here before, laying out the costs of our concentrated banking sector and building out a roadmap to a more competitive future. Canadians deserve a financial system that promotes innovation instead of being engineered to squeeze as much as possible out of every transaction.?
If we want a fairer system, policymakers need to realize there is not a direct tradeoff between stability and competition in the banking sector. Canada’s high regulatory standards can be maintained while creating an environment conducive to new entrants looking to unseat our largest financial institutions. CAMP is glad to see that Conservative MPs understand this and hope for continued pressure to promote competition in our financial sector.
??CAMP in the News??
The Call is Coming from Inside the House: Loblaws Calls for End of Restrictions it Enforces?
Per Bank, CEO of grocery giant Loblaw , wants things to change, but he wants you to go first. In an op-ed this week, Bank suggested that the answer to grocery competition woes is to eliminate commercial property restrictions currently under investigation by the Competition Bureau. Bank argued that this would boost competition and benefit Canadian consumers But as a grocery CEO, Bank is in a bind calling for more competition.
In one breath, Bank claims grocery competition has no impact on prices, and in the next, he’s pushing for expanded competition as a solution to the affordability crisis. Another glaring issue is that Bank himself has the keys to likely one of the largest collections of restricted properties in Canada under Loblaws’ Real Estate Investment Trust (REIT) arm.
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We’ve previously covered the Competition Bureau investigations into property controls used by Loblaws and Sobeys to limit competition. Restrictions like these are business as usual, and the? two companies have been using them for decades to block new players from entering and expanding in the market.?
While Bank’s PR move may seem admirable, if Loblaw is serious about increasing competition it could start by immediately striking restrictive clauses from all its properties. We know that real competition requires more than just empty promises in op-eds. Canadians need structural changes that make space for smaller players to compete, not half-hearted gestures meant to dodge deeper scrutiny.?
The recent surge in grocery prices has laid bare how a lack of competition impacts affordability. Canadians should not be swayed by performative gestures from the industry's largest players.
??What We’re Reading??
International Rent Price Fixing Pushback
Price fixing is price fixing, and Canadians are starting to push back. This week Toronto tenants secured a victory against national landlord GWLRA after it announced it would no longer be using the YieldStar pricing software of its rental properties. Yieldstar has come under antitrust scrutiny in the U.S. with enforcers alleging the software has allowed landlords to tacitly collude, killing competition and pushing up rent prices.
At CAMP as we’ve previously detailed both how algorithmic pricing is being used to dampen competition at the expense of Canadians and how tenants in Toronto's Weston neighborhood uncovered and have been protesting the use of YieldStar by their own landlord, Dream Unlimited. While the Competition Bureau is investigating similar practices by the company Kalibrate in the gas station market, an investigation has yet to be launched against RealPage, the provider of YieldStar.
On top of the ongoing antitrust litigation, antimonopoly champions at the American Economic Liberties Project have launched a campaign to ban the use of similar software across? the U.S., stressing the dangers of algorithm-driven rent hikes and calling for state and local action to complement stronger antitrust enforcement.?
Unchecked use of these tools poses a serious risk to competition, fairness and affordability. Citizens shouldn’t have to protest just to secure fair rental pricing— competition laws must be enforced to protect consumers from predatory practices.
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