Friday, March 25, 2022

Competition Law and the future of markets

Amidst hearings earlier this year about the proposed $26 billion merger between Rogers Communications and Shaw, federal industry minister François-Philippe Champagne said the government will compel the Toronto-based telecom giant to divest some of Shaw's wireless licenses to address concerns about concentration. "The wholesale transfer of Shaw’s wireless licences to Rogers is fundamentally incompatible with our government’s policies for spectrum and mobile service competition, and I will simply not permit it," he told the Canadian Press.      

Champagne's statement comes just weeks after the Liberal government revealed plans to overhaul the Competition Act, at least in part to address concerns about the market heft of digital giants, as well as issues such as wage-fixing, out-dated penalties and deceptive pricing. Matthew Boswell, head of Canada's Competition Bureau has called for wider reform, characterizing the current law as unsuited for the challenges of the digital age.  All this is taking place in the background to dramatic changes to the regulation of competition and anti-trust law in the United States and the European Union.    

The interconnected legislative, judicial and policy questions orbiting the debate about the future of Canada's competition law will be the subject of new initiative and event series led by U of T Law and the Future of Law Lab. Our initial program on March 29th (12 noon Toronto time) will be a fireside chat with two former Competition Bureau commissioners, Melanie Aitken, managing principal at Bennett Jones (U.S.) LLP and John Pecman, senior business advisor, Fasken. Co-sponsored by USC Gould School of Law Centre for Transnational Law and Business registration details can be found here.

One of the key points of discussion has to do with the extent of the reform that will be put forward. Should the policy changes involve a root-and-branch overhaul of legislation written long before social networks, big data and the platform economy? Or is the existing legal architecture robust enough to address current market and technological dynamics, provided the federal government enacts a series of focused updates and bolsters enforcement?

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In both Canada and the U.S., competition law traces its roots to the late 19th century ("Gilded Age"), and the monopolistic conduct of railroads, banks, and so-called trusts. Early reforms sought to break up trusts and impose regulatory oversight on natural monopolies, such as telephone utilities. In Canada, the 1910 Combines Investigation Act, which included criminal penalties, sought to address inadequate enforcement and was overhauled several times before being replaced in 1985. The Competition Act, administered by the Competition Bureau and adjudicated by the Competition Tribunal, regulates a range of activities, including price fixing, bid-rigging, pyramid schemes and excessive concentration in sectors ranging from bookselling to newspapers to movie distribution.

While the U.S. Federal Trade Commission's order to break up the AT&T long-distance phone monopoly in 1984 is generally hailed as milestone in modern competition policy, some economists and legal scholars from the 1980s onwards argued against the use of antitrust law to break up large companies. In Canada, the Commissioner has suggested winding back the "efficiencies defence” to mergers, furthering the debate about how efficiencies should best be taken into account when assessing the competitive effects of a merger.

In recent years, however, the alleged power of companies like Google, Facebook, Amazon, Apple, and Microsoft has rekindled debate not just about dominance, but the capacity of these companies to re-shape domains such as privacy, speech, and politics. Google and Microsoft have been subject to multi-billion-dollar fines meant to address some of these concerns.

Last fall, the Hon. Senator Howard Wetston, a former Competition commissioner, released a canvas of the legal and policy issues prepared by Professor Edward Iacobucci, Toronto Stock Exchange Chair in Capital Markets Regulation. Entitled "Examining the Canadian Competition Act in the Digital Era," the paper reviews several major questions, including the adequacy of the law's statement of purpose to the need for stiffer financial penalties.

Among Prof. Iacobucci's recommendations for reform is closing a loophole involving ambiguities (addressed by the courts) about whether the Competition Tribunal can temporarily halt mergers. "There is a good case for incrementally yet substantively amending the Act for economic reasons," he wrote. "The substantive, recommended amendments do not result necessarily from the emergence of digital markets, and would be appropriate in any event."

Senator Wetston also issued a call for submissions, and has since received (and published) 26 briefs, including responses from the Competition Bureau, the federal privacy commissioner, and a range of legal and economic scholars.

While several agree that Canada's fines -- currently set at a maximum of $10 million -- are outdated and inadequate, there's a range of opinion about whether the Act lacks the teeth needed to police digital giants, including arguments calling for wholesale reform. Some make the case that competition and privacy policy/law can no longer be treated in isolation.

Others disagree: "Competition law in Canada does not need an overhaul," wrote U of T Law's Anthony Niblett, Associate Professor and Canada Research Chair in Law, Economics, & Innovation, and Daniel Sokol, Professor of Law at USC Gould, in a brief called "Up to the Task" (published the MacDonald-Laurier Institute). They caution against "big-is-bad" populism and argue that the Act's existing enforcement provisions are adequate the police anti-competitive conduct. "Canada should not follow in the footsteps being proposed in the United States and Europe," they conclude. "Simply put, radical changes to the Competition Act are not required."  

Please join us next week for what promises to be a spirited conversation about one of today's most dynamic legal and policy arenas.


Thursday July 7, 2022 at 1:00 p.m. (EST) 

The Rise of Digital Marketplaces: Strategies and Challenges for the Future


  • Andrei Hagiu, Boston University’s Questrom School of Business


Co-hosted by the USC Gould School of Law Center for Transnational Law and Business and the University of Toronto Faculty of Law's Future of Law Lab.

Wednesday June 15, 2022 at 12:00 p.m. (EST) 

The Good, Bad, and Ugly in Canada's Newly Proposed Competition Amendments 


  • Susan Hutton, Strikeman Elliott
  • Jason Gudofsky, McCarthy Tétrault
  • Edward Iacobucci, University of Toronto

NEW DATE: Thursday, May 26, 2022 at 12:30 p.m. (EST) 

The Intersection of Competition Law and Data Privacy: Will EPIC v Apple signal the rise of data privacy as a defense to anti-competitive behaviour?


  • Erika Douglas, Assistant Professor of Law at Temple University

The first two talks in this series are co-hosted by the USC Gould School of Law Center for Transnational Law and Business and the University of Toronto Faculty of Law's Future of Law Lab.

Thursday, March 31, 2022 at 12:00 p.m. (EDT)

Canadian Competition Reform: Views from Practice


  • Lilla Csorgo, Chief Economist, Canada Competition Bureau
  • Renee Duplantis, Principal, Brattle
  • Elisa Kearney, Partner, Davies Ward
  • Julie Soloway, Partner, Blakes

Tuesday, March 29, 2022 at 12:00 p.m. (EDT)

The Future of Digital Competition and Regulation in Canada: A fireside chat with the former Commissioners of the Competition Bureau


  • Melanie Aitken, Managing Principal, Bennett Jones LLP (U.S.)
  • John Pecman, Senior Business Advisor, Fasken