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May 16, 2019

May 16, 2019 – At their recent meeting, members of the C.D. Howe Institute Competition Policy Council concluded Canada’s competition policy toolkit is sufficient to address new forms of market power that may arise in the digital economy. 

Governments worldwide are wrestling with public concerns about the perceived power and influence of “Big Tech” companies like Google, Facebook and Amazon.  Such players provide digital platforms for searching, shopping and social media and collect extensive datasets about users’ online activities.  In the face of populist appeals for a revamp of antitrust rules and pressure to directly regulate digital platforms, the consensus of the Council was that Canada’s competition law continues to provide a robust framework for confronting new forms of anticompetitive behaviour that may arise in the digital economy.  New analytical and evidentiary approaches may be required – particularly to address non-price dimensions of competition. 

However, Council members agreed that competition law has been capable of adapting to new technology and forms of market power.  Policymakers must be cognizant of the sensitivities of business investment to regulatory uncertainty and avoid dampening fast-moving and highly dynamic competition “for the market” in the technology sector, according to the Council. Policymakers should not assume that incumbents are invincible to upstart digital disruptors.

Council members also stressed the need for better information about market concentration and more rigorous enforcement to define the limits of competition law. 

Council members also agreed that carefully calibrated regulation may be appropriate to address non-economic objectives or persistent and demonstrated “market failures” – that is, an inefficient equilibrium that market competition will not rectify and competition law cannot address.

The Competition Policy Council comprises top-ranked academics and practitioners active in the field of competition policy. The Council provides analysis of emerging competition policy issues and is co-chaired by Adam Fanaki, Partner, Competition and Foreign Investment Review and Litigation at Davies Ward Phillips & Vineberg LLP, and Grant Bishop, Associate Director, Research, at the C.D. Howe Institute.  Professor Edward Iacobucci, Dean at the University of Toronto Faculty of Law and Competition Policy Scholar at the Institute, advises the program. The Council, whose members participate in their personal capacities, convenes a neutral forum to test competing visions and to share views on competition policy with practitioners, policymakers and the public.

For more information, contact Grant Bishop, Associate Director of Research, or David Blackwood, Communications Officer, C.D. Howe Institute. Phone: 416-865-1904. Email: dblackwood@cdhowe.org

The C.D. Howe Institute is an independent not-for-profit research institute whose mission is to raise living standards by fostering economically sound public policies. Widely considered to be Canada's most influential think tank, the Institute is a trusted source of essential policy intelligence, distinguished by research that is nonpartisan, evidence-based and subject to definitive expert review.