Imagine waiting months to buy your teenage daughter a ticket to see Taylor Swift. You’ve saved up, she’s excited, and you’re armed with the verified fan code you need – only to have a botched Ticketmaster rollout dash the kid’s dreams. That happened to thousands who tried to buy Eras Tour tickets in 2022, resulting in floods of teenage tears – and class-action suits. Then, last year, some Bruce Springsteen fans had to cough up $5,000 to see the Boss, pressing the boundaries of ticket price absurdity.
These are just two examples of consumers growing increasingly fed up with high prices and poor service, both online and off. Luckily for them, change is afoot: President Joe Biden and state governments have seemingly got the message and are targeting anti-competitive behavior. And, at long last, Canada might soon follow suit.
Washington takes on Goliaths
High prices, junk fees, and corporate dominance of major concert venues have led to consumer and artist frustration for years. On May 23, the US Department of Justice launched a lawsuit against Live Nation and its Ticketmaster subsidiary, accusing them of monopolistic practices, citing their “stranglehold on the live concert industry.” The DOJ was joined by 30 states and the District of Columbia in its suit.
This week, the DOJ and FTC launched investigations into Microsoft, OpenAI, and Nvidia, examining their role in the growing artificial intelligence market. The two bodies will split the work, with Justice taking on Nvidia and the FTC looking into OpenAI and Microsoft.
Since 2020, the US has committed to taking on some of the world’s biggest companies – and alleged monopolies – all at once. The Live Nation/Ticketmaster case is just the latest in a string of federal and state lawsuits, including Apple for its alleged smartphone monopoly and two separate suits against Google for its alleged digital advertising and search monopolies.
There are also two major Federal Trade Commission cases. One is against Meta for allegedly burying or buying its platform competitors, and another is against Amazon for using, according to the suit, “a set of interlocking anticompetitive and unfair strategies to illegally maintain its monopoly power” by preventing competitors from gaining market share.
The pro-consumer, full-court press includes a joint FTC-DOJ task force launched in March to counter “unfair and illegal” corporate pricing practices. The Biden administration went so far as to call the group “the Strike Force on Unfair and Illegal Pricing” – in case there was any doubt about its ambit. The group coincided with White House efforts to end high-cost credit card late fees and reduce junk fees across sectors.
In early May, the US and Google presented closing arguments in the 2020 Google search monopoly suit brought under the Trump administration – the first major suit to go to trial, but almost certainly not the last, as observers await a verdict expected as early as this summer. These actions take time – years and sometimes the better part of a decade – which means that the headlines, and the legal maneuvering, will continue for the foreseeable future.
Is Canada catching up on anti-monopoly action?
While the United States has a long history of tackling anti-competitive behavior, in Canada, “we complain about corporate concentration but don’t do much about it,” writes business columnist David Olive.
Canada has a long history of not fighting corporate concentration or high prices and of basically waving through mega-mergers. There’s an old joke: Canada is two or three X companies in a trenchcoat, where “X” stands for airlines, grocery stores, or telecoms.
Things might be beginning to change: Justin Trudeau’s government has adopted new measures aimed at closing the gap between the US and Canada. The efforts aim from small to potentially quite big. The government brought in an industry-led, voluntary grocery code of conduct aimed at regulating relationships between retailers and suppliers and keeping prices down. It also adopted amendments to the Competition Act that give the Competition Bureau strong powers for gathering data for market studies, raising the bar for merger reviews to pass, limiting the scope of defense for anti-competitive collaborations, and increasing the maximum financial penalties for abusing a dominant market position.
A bill to modernize the Competition Act is now in front of the Senate. If approved, it would widen the scope for private action that could be brought against companies for anti-competitive behavior, allowing litigants to seek damages more easily. It also tackles misleading pro-environmental marketing and seeks to flip the onus – when it comes to mergers from the Competition Bureau – to the companies looking to merge.
But how do these changes stack up against the US?
Asked if Canada is a laggard compared to the US on tackling monopolists, Keldon Bester, executive director of the Canadian Anti-Monopoly Project, says “A year ago, I would have said clearly yes,” but now “Canada is catching up on the legislative side.”
Bester points out that there’s an important distinction between legislation that empowers action against anti-competitive behavior and the actual enforcement of laws against monopolies. He notes that the US hasn’t actually passed more effective and modern anti-monopoly laws but adds that “Biden, and even presidents before Biden, have ratcheted up enforcement of existing laws.”
So while US laws are limited, federal and state governments have been keen to use them. Canada, on the other hand, has been weak on both fronts, at least till now.
The Trudeau government’s new measures are meant to fix this problem. Whether they will depends on what happens after the laws are passed, the dust settles, and new, pro-competition powers are available.
“What will the enforcer do with those powers?” asks Bester. That’s the open question north of the border, but with pro-consumer sentiments rising and US action picking up, Canada finally stands a chance at taking competition seriously – and none too soon.
Growing frustrations – and then what?
The last few years have seen a surge in complaints and frustrations in Canada – and the US, for that matter – with the grocers, airlines, and telecom companies in the crosshairs. The Competition Bureau has launched an investigation into anti-competitive behavior by Canadian grocery giants Loblaws and Sobeys, alleging the companies are using property lease controls to limit competitors from finding retail space. But that investigation will take time to bear fruit if it does at all.
Four years ago, the Bureau started digging into Amazon’s alleged anti-competitive practices. So far, nothing has come from it. Around the same time, the Bureau also launched an investigation into Google. Progress has been slow there too and hasn’t resulted in litigation – at least not yet. But these investigations began before the government adopted its recent pro-competition measures.
In February, the Bureau updated its investigation to include Google’s advertising practices, once more mirroring the US case against the tech giant. This is progress and bodes well for what competition enforcers in Canada might do with new their powers, but it’s slowgoing and overdue.
While the US remains well ahead of Canada on anti-competition law and enforcement, Canada may be catching up – thanks, in part, to Biden’s example. Bester says the recent changes and proposed changes in Canada are important, material, and positive for catching the country up to the US.
“We’re bringing ourselves up to speed,” he says. “And although there are differences, we are taking a path that is more akin to the US.”
But the proof of whether the new Canadian, US-like approach succeeds will depend on how enforcement proceeds. As US litigation builds, Canada is collecting data, studying companies, and investigating. At some point, consumers (read: voters) on both sides of the border demand to see tangible outcomes resulting in lower prices and improved services.
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Publish date : 2024-06-06 11:10:08
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