Letters: Google's Right to Squeeze
February 23, 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.
Google Launches Charter Challenge in Response to Bureau LawsuitSurprising few, Google fired back this week against the Competition Bureau’s lawsuit, denying allegations of abusing its market power in the online advertising business. Focusing on Google’s ad tech dominance, the Bureau suit alleges that the company unlawfully tied together its services to stifle competition and inflate costs and used predatory tactics to drive competitors out of the market. In its response, Google is playing defense on multiple fronts. Not only does it deny having a "substantial degree of market power," let alone abusing it, but Google is also challenging the constitutionality of the proposed financial penalties, calling them an affront to Google’s rights and "contrary to the public interest." The Bureau’s case makes use of Canada’s strengthened competition law, which raised the maximum fine for abuses of dominance above $15 million, a rounding error for a company like Google, to a maximum of 3% of annual global revenue. While Google argues that competition in digital advertising is alive and well, its control over Canada’s ad market suggests otherwise. The Bureau’s investigation has found that Google owns four of the largest ad tech services in the country, giving it an overwhelming market share. Google’s counterargument—claiming the Bureau has misdefined the market—follows a familiar Big Tech playbook: reframe the issue, challenge the legal process, and outlast cash-strapped regulators in court. This case isn’t just about Google. It’s a litmus test for Canada’s new era of competition enforcement. If meaningful fines, passed unanimously by federal lawmakers, are deemed unconstitutional, the largest corporations on the planet will go back to paying parking tickets for potentially billions of dollars of harms and ill-gotten gains. 📚What We’re Reading📚
Canadian Conservatives Pledge to ‘Go Huge’ on Open BankingWith an election on the horizon, Canada’s Conservatives are making a big bet on open banking, pledging to fast-track reforms that would allow fintech startups to compete with Canada’s Big Five banks if elected. Open banking, which makes it easier for Canadians to switch banks, is currently stuck in limbo, delayed by political gridlock and pushback from industry incumbents. The Liberal government had planned to roll out a regulatory framework by 2026, but those efforts have stalled. Now, Conservatives say they’ll be ready to move quickly to break open Canada’s banking sector if they win power. While the focus on tackling Canada’s banking oligopoly from Conservatives is welcome, open banking is just one step needed to improve competition in the financial sector. Strong enforcement of competition laws, fair access to financial infrastructure, and breaking the big bank’s hold on payment services are all part of the anti-monopoly equation. A more competitive, efficient, and dynamic financial system is key to building a more resilient Canadian economy. Whichever party forms the next federal government must be up to the task. 📰 CAMP in the News 📰
Competition Bureau Targets AI-Powered Rent Price FixingIn a move that could provide some relief for renters, the Competition Bureau has launched an investigation into whether AI-driven rent pricing software is allowing landlords to coordinate housing price hikes. This investigation mirrors a similar U.S. antitrust lawsuit, alleging that landlords used RealPage’s YieldStar software to share sensitive pricing data and push rents higher across markets. For renters already struggling with record-high costs, this could be a game-changer as policy makers work to turn the tide of Canada’s housing crisis. AI-driven pricing is often touted as a tool to make markets more efficient. In reality, it can just as easily be a covert form of collusion that keeps rents artificially high. If the Bureau finds wrongdoing, it could lead to not only legal consequences but also a broader push for legislation to ban the use of algorithmic pricing in housing markets. With housing affordability already at crisis levels, renters cannot be asked to bear the cost of collusion. 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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