Letters from CAMP: The Limits of Transparency
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.
In Competition, Transparency is Table Stakes
This week the Competition Bureau secured an important win against Cineplex, with the Competition Tribunal handing down a $38.9 million fine for its deceptive marketing practices related to a $1.50 online ticket fee. Known as drip pricing, the charge is that consumers are lured in with an artificially low price, only to face hidden fees at checkout, harming consumers and competitors that are fully transparent with their pricing.?
The fine aimed to send a strong message to companies engaged in similar practices, calculated to equal the amount Cineplex made through this deceptive $1.50 fee between June 2022 and December 2023. The fine is the largest in Canadian history thanks to recent reforms to the Competition Act, which raised the maximum financial penalty from $10 million for a first violation to up to 3% of a company’s global revenue.
But while an important win and a reminder of the importance of transparency to competition, let’s not lose sight of why Cineplex was able to charge the junk fee in the first place. Speaking to CBC , CAMP executive director Keldon Bester notes that it’s a lack of competition that allows Cineplex to charge consumers extra for the convenience of buying tickets online. More troubling than its deception are the practices that Cineplex and studios engage in to limit the kind of competition that would take this ability away.?
Through exclusionary geographic zones and “clean run” requirements, independent cinemas are unable to screen new releases and compete via, oh we don’t know, maybe not charging people extra for buying their tickets online. As the Network of Independent Canadian Exhibitors (NICE) and CAMP advisory board member Vass Bednar have discussed in the past, this conduct shuts independent cinemas out of competing fairly for movie-going audiences.
So, while it’s good to see the Competition Bureau taking on deceptive marketing, the real fight is against the anti-competitive practices propping up Cineplex’s 75% share of the exhibition market. If we really want to help consumers, pushing for greater transparency has to be only the first step towards improving competition in markets across the economy.
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How Canada’s Obsession with Big Business Backfired
Canada’s economic policy has long been rooted in the belief that bigger is better. For decades, policymakers have championed the need for “national champions”—massive, globally competitive corporations supposed to drive innovation domestically and boost the economy. But as CAMP co-founder Robin Shaban explains in the inaugural post of their new substack Open Mind Economics, it’s increasingly clear this approach has backfired . While corporate giants may spend heavily on R&D and enjoy economies of scale, they also leverage their size to suppress competition, limiting consumer choice and stifling the very innovation they were supposed to promote.
Rather than driving a dynamic, competitive economy, these behemoths have used their market power to block new entrants and consolidate wealth at the top. From telecoms to grocery chains, the result has been higher prices and fewer options for Canadians. Worse, the dominance of these firms has hamstrung entrepreneurial growth, making it impossible for smaller businesses to compete. Instead of fostering a culture of innovation, Canada has created a landscape where a handful of large firms wield disproportionate power, both in the market and over policy decisions.
Shaban’s critique underscores CAMP’s work to rethink our reliance on a small handful of big businesses as the driver of our economic growth. The future of innovation lies not in protecting the biggest players, but in creating space for new ideas and new competitors to thrive and mount a strong challenge in new markets and against incumbents. Rather than sheltering giants, Canada needs policies that promote real competition, empower entrepreneurs, and limit the ability of those giants to stifle the next generation of innovators.
U.S. DOJ Challenges Visa’s Private Sales Tax
This week, the U.S. Department of Justice filed an antitrust lawsuit against Visa, accusing the company of monopolizing debit networks and suffocating competition in the payments space. The numbers are staggering: at roughly 60% of the market, Visa rakes in over $7 billion annually from fees on debit transactions in the U.S. alone. While in Canada the firm faces greater competition for debit card transactions from the Interac network, the company is still responsible for roughly a third of debit card transactions in the country.
Because of the nature of payment networks, where there value depends on the number of connections between participants, markets have tended to be dominated by a small number of players, Visa and Mastercard being the most prominent in the West. As a result, jurisdictions like the European Union and Canada have set or negotiated caps on the fees they can charge for facilitating transactions.
As antitrust advocate Matt Stoller lays out in his newsletter this week , as operators of what should be public infrastructure, companies like Visa effectively levy a private sales tax on every transaction in the economy. But that Visa is able to charge these fees is not the issue at the heart of the DOJ’s case. Instead, the DOJ is going after how Visa has used anticompetitive conduct to amass market power and protect those fees from competition from new entrants.
Canada’s Competition Bureau has tangled with Visa and Mastercard over their treatment of merchants depending on their networks, but at the time the Competition Tribunal slapped down the case saying it was the responsibility of the Department of Finance. The DOJ’s case is a reminder that it may be time to take another hard look at the companies that operate our country’s financial infrastructure.
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