Letters: Calling for Consolidation
March 16, 2024Welcome 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:
Now let’s dive in.
One More Merger and I’ll Be Fine: Resisting Calls for ConsolidationAmid escalating trade tensions and economic nationalism, Corporate Canada is making the case for domestic consolidation. Recent commentary in the Globe and Mail provides a window into the pressure that board rooms are putting on policy makers: let large domestic corporations merge to allegedly better withstand U.S. economic pressure. This would be a novel idea had Canada not spent the past 40 years buying the same story to disastrous results. In favouring so-called efficiencies over actual competition, Canada’s competition policy long encouraged consolidation in the hopes that these companies would go forth and compete internationally. The result? Domestic monopolies harvested gains from Canadian citizens while largely sticking within our own borders. The history of countries that knew better shows us that building robust, resilient international competitors requires vigorous competition at home first. While the ongoing tariff drama understandably has Canadians on edge, it cannot become an excuse to double down on past strategies at the expense of Canadians. The energy behind slogans like Mark Carney’s “Canada Strong” and Pierre Poilievre’s “Canada First” are a welcome dose of pride in all the things that make this country great. But it's critical that support for domestic industry doesn't become a blank check to further erode competition and squeeze already strapped Canadians. This moment calls for an agenda that charts a course for a more independent and dynamic economy, not a retread of the mistakes of the past. 📚What We’re Reading📚
Exposing the Hidden Takeover of Canada's EconomyAs part of its Never 51 series, Social Capital Partners (SCP) has shed light on the quiet yet harmful trend of serial acquisitions reshaping Canada's economy. While large mergers capture headlines, smaller buyouts, often driven by private equity firms, evade regulatory scrutiny and gradually consolidate market power unnoticed. The result is fewer consumer choices, rising costs, declining job quality, and weakened economic resilience. Examples abound: over half of Canada's veterinary emergency clinics and a significant share of funeral homes have fallen under private equity ownership, inflating prices and reducing quality. SCP emphasizes the urgent need to address these "under-the-radar" mergers, which disproportionately benefit large, often U.S.-based firms at the expense of Canadian economic independence. SCP proposes practical solutions: lower merger notification thresholds, update guidelines to explicitly target serial acquisitions, enhance data collection on buyouts, improve public transparency around mergers, and mandate alerts for changes in ownership. By adopting these policies, Canada can reclaim control from hidden monopolies and build genuine economic resilience amid unprecedented uncertainty. U.S. DOJ Stands Firm on Google Search RemediesIn a positive development in the ongoing U.S. antitrust case against Google, the U.S. Department of Justice (DOJ) clarified its commitment to structural remedies to dismantle the company’s monopoly in search. Despite Google's efforts to influence the Trump administration away from drastic measures, the DOJ insists that significant structural changes, including the divestiture of the Chrome browser, remain necessary to remedy competition concerns. The DOJ's updated remedies also propose opening Google’s search index and ad services to competitors, providing content creators more autonomy over data usage, and imposing transparency measures on Google's AI investments. The remedies trial, set to begin in April, will focus on solutions to Google's self-preferencing practices and its interdependent product ecosystems. The outcome could profoundly affect the digital economy and set new precedents for Big Tech regulation, and underscores the bipartisan enthusiasm for stronger antitrust enforcement in the United States. If you have any monopoly tips or stories you'd like to share, drop us a line at hello@antimonopoly.ca
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Letters from CAMP
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