Letters from CAMP: Fair and Balanced
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.
When Competition Fails: The Value of Public Monopolies in Auto Insurance
You can’t say we aren’t fair and balanced. This week, CAMP fellow and economics PhD student Andrew Paulley has penned CAMP’s first pro-monopoly article . Diving deep into provincial auto insurance markets, Paulley looks to see if competition is working as advertised, and the results are surprising.??
Despite ten major insurance players in Ontario, drivers there pay the highest average premiums in the country. Right behind them is Alberta, with paradoxically fewer established players to choose from. Despite bucking Canada’s usual trend of oligopoly markets centered on a few players, Ontario’s fragmented insurance players have been able to move as a pack. When the government made tweaks that resulted in a 24% reduction in insurance claims, insurers kept the lion’s share of the savings and passed on a measly 2% to drivers in the form of lower premiums.
Rather than calling for more competition to solve the problem, Paulley finds that the real solution is a public monopoly. Saskatchewan and Manitoba have had public auto insurance monopolies for decades, and Saskatchewan and Manitoba drivers save hundreds annually compared to their provincial counterparts. Findings from an Alberta government report found that a public insurance company could save drivers over $700 annually, but the government declined to embrace a public monopoly.
These savings are possible because insurance programs have actual economies of scale that spread risk across a wider pool of drivers and a public monopoly means a lack of private shareholders allows savings to be passed back to drivers.???
Paulley’s work could not be more timely. This week, BC Conservatives claimed that, if elected, they would dismantle the province’s public auto insurance provider ICBC and let the market reign. But when it comes to essential services like auto insurance, the goal shouldn’t be competition for competition’s sake. Focus should instead be on how the system works and who benefits from it. Looking at the examples of Ontario and Alberta, if BC dismantles ICBC, the real winners will be private insurers, not drivers.?
Google Trials Come at a Pivotal Moment for Anti-Monopoly Movement
Writing for the Centre for International Governance Innovation (CIGI), CAMP executive director Keldon Bester digs into the seismic ruling in the U.S. that declared Google a monopolist in the online search market. While the ruling is an important victory, it comes at a make-or-break moment for the global anti-monopoly movement.
Judge Amit Mehta’s decision that Google’s 90% market share of the search market constitutes a monopoly with surprise few. But what happens next is far from obvious. Now that Mehta has deemed Google a monopolist, he must now select an appropriate remedy to the giant’s conduct. That remedy has the potential to reshape the global digital landscape for years to come, but it comes with serious risk.?
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A solution that doesn’t go far enough in addressing Google’s power could represent years of wasted effort, snatching defeat from the jaws of victory. What we need now are structural changes breaking up core assets and breaking open markets to competition. Anything less would be a missed opportunity.
The timing of the remedy trial overlapping with the U.S. presidential election also introduces serious uncertainty. Kamala Harris’ advisors are stacked with representatives of Silicon Valley giants and Donald Trump has largely backed away from the anti-corporate language that characterized his 2016 campaign. The battle against Google is as much a political battle as a legal one. An administration with a less assertive approach to Big Tech could easily back down, no matter the merits of the case. It was always an uphill battle, but the future path of the anti-monopoly movement may be a rockier one.?
??What We’re Reading??
What’s Next for News in Canada Post-Online News Act?
The Online News Act (ONA) was designed to rebalance the scales between Canadian news outlets and the tech giants—forcing companies like Meta and Google to fairly compensate publishers when their content is shared on these platforms. But as highlighted in a recent Columbia Journalism Review piece, the fallout has been anything but straightforward .
Meta’s response was swift: they blocked news content on Canadian feeds, leaving readers cut off from trusted sources. While Facebook continues to be a hub for misinformation and political smear campaigns, legitimate journalism is being squeezed out. To adapt, outlets are turning to new platforms like TikTok or leaning heavily on email newsletters. But reaching new audiences remains a challenge. For smaller publications, particularly those serving Indigenous or remote communities, the loss of Facebook is critical.
While Google has struck a deal for $100 million annually to be exempt from the ONA, the future of Canada’s news ecosystem remains grim. Canada is not alone in this predicament, Google recently threatened to pull out of New Zealand after the country moved forward on similar journalism support legislation, but we cannot rely on others to solve our problems for us. The ONA cannot be the? last word on rebalancing power in the markets that make up the foundation of our democracy.
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